Norada Real Estate Investments

About Marco Santarelli

Marco Santarelli is an investor, author, Inc. 5000 entrepreneur, and the founder of Norada Real Estate Investments – a nationwide provider of turnkey cash-flow investment property.  His mission is to help 1 million people create wealth and passive income and put them on the path to financial freedom with real estate.  He’s also the host of the top-rated podcast – Passive Real Estate Investing.

Benefits of Investing in a Real Estate Syndicate

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A real estate syndicate is a group of investors who pool their funds to buy, manage, and operate real estate. The group is typically led by one or more experienced real estate investors who serve as general partners and are in charge of managing the investment's day-to-day operations. The group's investors serve as limited partners, providing capital for the investment.

The syndication process is simply the aggregation of capital from a group of investors to acquire property. Real estate syndications are seeing new popularity as real estate is increasingly viewed as a fourth asset class in addition to stocks, bonds, and cash. Real estate investment trusts (REITs), many of which have dividend returns of 6 percent or more, are an attractive way to invest in real estate but their publicly traded shares are subject to a significant degree of price volatility that many investors seek to avoid.

By contrast, shares in a private syndicate, typically a real estate limited partnership (RELP) or limited liability company (LLC), are not priced to market daily and in addition, offer the possibility of higher returns than publicly managed REITs. Finally, private real estate syndications offer some tax savings unavailable when investing in a public company.

A real estate syndicate can take different forms, it can be a private or public company, a limited partnership, or a limited liability company, and each of them has its own set of advantages and disadvantages. The main advantage of a real estate syndicate is that it allows individual investors to participate in larger and more expensive real estate deals that they otherwise would not be able to afford.

By pooling their funds, investors can gain access to a diverse portfolio of properties while reducing risk by spreading it across multiple properties. Furthermore, general partners frequently have more experience and resources than limited partners, which can result in better decision-making and higher returns.

Real Estate Syndication Vs REIT

Real estate syndication and REIT (Real Estate Investment Trust) are both ways for investors to invest in real estate, but they have some key differences. A real estate syndicate is a group of investors who pool their money together to purchase, manage, and operate a real estate investment. The group is typically led by one or more experienced real estate investors who act as the general partners and are responsible for managing the day-to-day operations of the investment. The investors in the group act as limited partners and provide the capital for the investment.

On the other hand, a REIT is a publicly traded company that owns and manages a portfolio of real estate properties. REITs allow investors to purchase shares in the company, which gives them ownership of the underlying properties. REITs are required to distribute at least 90% of their taxable income to shareholders in the form of dividends.

One of the main differences between the two is the level of control and involvement that investors have. In a real estate syndicate, the investors are typically limited partners who provide capital and have little control over the day-to-day operations of the investment. In a REIT, investors are shareholders and have no control over the properties, but they receive regular dividends and may have the ability to vote on certain matters related to the company.

Another difference is the level of liquidity, REITs are publicly traded on the stock exchange, which means the shares can be bought and sold on a daily basis. While in the case of a real estate syndicate, investors usually have to wait until the property is sold before they can receive their share of the profits. Both, Real estate Syndication and REIT have their own set of advantages and disadvantages, it's important to carefully evaluate the investment and consider the risk-reward balance, before making a decision.

Advantages of Investing in a Real Estate Syndicate

While investing in a real estate syndicate has certain disadvantages as compared to direct ownership of the real estate, syndicates do offer significant benefits. These include the following:

  • Access to real estate skills. The most obvious advantage of a syndicate is that the knowledge and skills of a real estate professional are available to nonprofessional investors. Real estate investment is a far more complicated process than might appear at first, requiring skills in determining real estate values, negotiating purchase agreements, financing a purchase, negotiating leases, and managing the property.
  • Increased savings. By pooling the funds of several investors, even a small real estate syndicate can achieve cost savings as compared to an individual investor. A well-capitalized syndicate can make a substantial down payment on one or more properties while still retaining necessary cash reserves. In addition, other things being equal, larger properties tend to be more cost-efficient than smaller ones, since many expenses are lower on a per-unit or square-foot basis.
  • Diversification. A major advantage of syndication is that it enables an individual investor with limited funds to diversify among several different properties. Diversification may well be the most important way to protect against significant losses in real estate.
  • Tailor-Made Investment Positions. Finally, a syndicate can be structured to offer a variety of “investment positions” that differ concerning the priority of return, risk of loss, and tax benefits. Thus, an investor can choose the balance of risk and return that best suits their wishes.
  • Cash Reserves. The need for cash reserves is often overlooked when inexperienced investors buy real estate. Syndication can assure that sufficient capital is available to give the investment staying power, and the ability to withstand economic downturns or temporary shortfalls.

Beginning the Syndication Process

A major consideration to be addressed at the beginning of the planning process is the number of investors the sponsor intends to solicit. In most cases, a syndicate will consist of 10 to 50 investors, often known personally by the sponsor, who may be a real estate broker, attorney, accountant, or someone fully involved in real estate operations. In these cases, no elaborate marketing plan needs to be implemented. In addition, federal securities laws may not apply if the offering is within a single state or otherwise meets the requirements for an exemption. State securities laws may or may not be applicable. Professional counsel should be sought to assure compliance.

Multi-Class Syndications

In a typical real estate syndicate, the investors constitute a single class, each receiving a pro-rated ownership interest in the syndicate. In some cases, however, to broaden the market for syndicate shares, the sponsor may create a multi-class syndicate or paired syndicate. This permits the creation of different classes of investors, each class entitled to a different type of return, just as corporate investors can choose among bonds, common stock, and preferred stock.

Three different approaches to the multi-class syndicate are (1) different classes of interests within the same syndicate; (2) fee/leasehold split in separate syndicates; and (3) equity/loan split in separate syndicates.

In the fee/leasehold approach, separate legal interests in the property are created – fee ownership and a long-term leasehold. Two syndicates are formed. The syndicate owning the fee interest in income property will be attractive to investors wishing to receive a secure cash flow in the form of rent from the leasehold syndicate. The syndicate owning the leasehold then operates the property directly or enters into a net lease with a high-credit tenant. Since no land investment is required, higher returns can be generated but more risk is assumed since the ground rent must be paid in all events.

In the equity/loan approach, instead of a division of ownership between two syndicates, one syndicate (for conservative investors) makes a mortgage loan to a second syndicate (of the equity investors) that owns the property. The lending syndicate receives interest on its loan, which can include some form of participation in future income, while the equity syndicate keeps the balance of income from the property and possible amortization payments as well.

Multi-class syndication is complex and must be expertly handled for economic, legal, and tax consequences. When two syndicates are created, as discussed above, the sponsors must be sure that applicable federal or state exemptions will not be defeated because the offerings are deemed to be integrated.

Benefits of Investing in New Construction Real Estate

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When it comes to investing in residential real estate, there are only two basic types of property you can invest in – new construction and resale. Resale properties are more often than not purchased directly from the homeowner who has been living in it themselves or has been leasing it to tenants. They are typically not purchased from a builder or developer.

New construction properties are those that are purchased directly from the builder or developer who constructed the property. They are the owner and seller. They do not have a residence and have never lived in one before. In short, they are considered brand new. Investing in new construction real estate can provide a number of benefits to investors. They tend to appreciate value faster than older properties, as they are often built in growing areas and offer modern amenities.

Due to their modern amenities and energy-efficient features, new development might attract greater rentals than older residences. Buying a newly constructed home may also provide tax advantages, such as a reduced property tax rate for the first year and the option to claim mortgage interest and property tax deductions.

If your investment focus is on pre-foreclosure, foreclosure, bank-owned property (REOs), or probate sales then you are likely to be purchasing resale properties. Occasionally, however, REOs are new construction properties because the bank foreclosed on the builder or developer who built the property but could not sell it prior to the foreclosure.

Benefits of Investing in New Construction Real Estate

Here are some of the many benefits of investing in new construction real estate: 

Small Deposits

Builders will typically require a very small deposit to secure a contract for a newly built property. Upfront deposits can range from as little as $1,000 to as much as 10% of the purchase price. This is sometimes negotiable and is a major advantage for investors who prefer to minimize their out-of-pocket cash until the actual closing date.

This is true for both new construction and pre-construction real estate where the property is constructed after the acceptance of your purchase contract and deposit.

During real estate booms where there is higher than normal appreciation, a small builder deposit allows some investors to profit by “flipping” or assigning their purchase contract to other investors for a fee. This only makes sense when the second investor is benefiting from the property's equity through discounts and appreciation during construction. This however is not common in today’s market.

Low Maintenance and Repair

New construction properties require less maintenance and repairs than older properties, which can help to keep expenses low. Unlike resale property, new construction property comes with a builder’s warranty which is required by law. Typically, warranties cover materials and workmanship as well as all systems (electrical, plumbing, heating and air conditioning, etc.) for up to two years.

There is also a 10-year warranty covering major structural elements such as the foundation and basement walls. Resale property rarely includes a home warranty unless one was purchased by the seller. However, these warranties carry limitations and are not as extensive as warranties on new construction real estate.

Additionally, resale property that has undergone renovations may not meet current-day building codes. They may be less energy efficient and contain hazardous building materials like asbestos or lead paint.

Growth and Emerging Markets

New construction can always be found in growth and emerging markets. As a real estate investor, this is where you want to invest to reduce your risk and maximize your long-term appreciation. Although you could also invest in resale property in these same growth markets, you would be giving up the other benefits outlined in this article.

As always, be sure to do your research and study the markets you're considering. Purchasing a new property in areas where employment, shopping, and other important amenities are a long commute away may put you too far ahead of the curve and dampen your investments rental prospects.

Appreciation

More than one real estate expert has concluded that, as a whole, new construction properties tend to appreciate at a faster pace than their resale counterparts. As new developments see an increase in residents, retail establishments, schools, and other amenities quickly pop up to service the growing population. This helps increase property values as more residents continue to move into the area adding to the demand and establishing the community.

Discounts and Instant Equity

There are situations where purchasing new construction from a builder in the early stages of development can provide you with early bird pricing or significant discounts. It is not uncommon to purchase property from a builder at 5% to as much as 20% below market value.

Why would the builder sell your property at a discount? One reason is to keep their sales up and debts low in order to be able to attract lender financing so they can build more property. Having buyers lined up to purchase the builder’s product reduces the lender's risk on loans they provide that builder.

Customization and Cost Control

If you are purchasing a pre-construction property you get the added benefit of being able to customize the property to suit your needs. An obvious benefit of buying pre-construction property is that you can choose many of the features such as flooring, cabinetry, lighting, plumbing, and fixtures. This is useful when you want to keep your costs down while making it as durable and appealing to future tenants as possible. You can even choose your lot location in most new subdivisions.

Newer Technology

New construction properties offer better construction and more advanced, longer-lasting building materials than resale properties. Insulation technology is far better than in years past providing better comfort and energy efficiency. Additionally, due to advances in heating and air conditioning systems, indoor air quality is far better.

Overall, newly constructed real estate is better suited as investment property than resale homes. They are simply more energy-efficient, healthier, and lower maintenance. They can be purchased in growth markets using small upfront deposits and often at below-market value. There are no surprises, and that translates into less worry and stress for you.

It's important to note that investing in new construction real estate comes with its own set of challenges, such as dealing with construction delays and unexpected costs. It may also necessitate more upfront capital, but the end result can be a high-demand property with a high return on investment.

Housing Market Forecast 2024 & 2025: Predictions for Next 5 Years

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Housing Market Predictions for Next 5 Years

Housing Market Predictions for Next 5 Years

Housing market predictions depend on one's capacity to predict market-influencing external forces. Forecasting is more subjective as economic conditions change. Here's what some of the experts predict will happen in the housing market in the next five years. Some economists are more hopeful, but even those who predicted price increases through 2023 are changing their tune. For example, Freddie Mac's October forecast indicates 0.2% price decreases in 2023, a change from the previous quarter's estimate of 4% price increases.

Experts are concerned about red flags in the housing market as the Fed attempts to keep inflation under control. Nobody knows how severe the correction will be, but economists are keeping an eye on the unpredictability of the housing market and aren't happy with what they're seeing so far. According to Zillow, the current typical value of homes in the United States is $357,319.

Here is the summary of the housing market predictions for the next few years.

Chief economist and senior vice president of research at the National Association of Realtors, Lawrence Yun: In 2023 and beyond, the real estate market in Atlanta will be the one to watch as 4.78 million existing homes are sold at stable prices. The median home price will rise to $385,800, an increase of only 0.3% from this year's level ($384,500), while home sales will fall 6.8% compared to 2022's level (5.13 million).

There's a chance that half of the country may witness price increases, while the other half will see price drops. Nonetheless, the markets in California may be an outlier, with San Francisco perhaps seeing price decreases of 10-15%. Following a 7% increase in 2022, rents will go up by 5% in 2023. In 2023, the foreclosure rate will be lower than ever before, accounting for less than one percent of all mortgages.

This is less than half the average historical rate of 2.5%, therefore the 1.3% GDP growth will be a significant slowdown. As the Fed lowers the pace of rate hikes in an effort to contain inflation, the 30-year fixed mortgage rate will fall to 5.7% in late 2022 from its peak of over 7% at the time. This is significantly lower than the pre-pandemic average of 8%.

Taylor Marr, Associate Chief Economist at Redfin: Mortgage rates are expected to fall further in the new year as a result of taming inflation and expectations that the Federal Reserve would ease rate hikes in the next year, which will boost demand for house purchases. But demand is still well below its high, so it's too early to declare a comeback or even a recovery.

We are keeping an eye on the job market for signs of sustained deceleration in price growth. Higher salaries and consequent price increases are one effect of a robust labor market like the one we're experiencing right now. A small increase in unemployment and/or slower economic growth would definitely help bring down mortgage rates even further, which seems paradoxical. If this trend continues into 2023, the boost in demand seen thus far may be reflected in a rise in pending sales.

The top economist at Realtor.com, Danielle Hale: In 2023, the housing market could feel more like a buyer's market than a seller's market after being in a sellers' market for several years. While the 22.8% increase in listings should be good news for buyers, it's mostly due to homes taking longer to sell due to tighter affordability. In 2023, the national annual median price for homes for sale is projected to rise by another 5.4%, which is less than half the pace seen in 2022.

Even if a homeowner decides to sell their home, they will likely have a lot of equity in it. However, as buyers and sellers pull back from a housing market and economy in transition, we anticipate house sales to be significantly lower, down 14.1% compared to 2022. The rate of home sales in late 2022 is a good indicator of what the annual total for 2023 would look like.

Selma Hepp, interim lead of the Office of The Chief Economist at CoreLogic: Real estate activity and consumer mood regarding the housing market plummeted after the recent increase in mortgage rates above 7%. In October, home price increases remained close to single digits, and this trend is expected to persist through the rest of the year and into 2023.

Some housing areas have experienced major recalibration since the spring price high and are projected to incur losses in 2023. Nonetheless, more deteriorating inventory, some relief in mortgage rate rises, and reasonably optimistic economic data may help eventually stabilize home values.

Senior economist at Zillow, Jeff Tucker: The softening of the rental market has not yet resulted in any significant respite for tenants. There is hope, though, that prices will decrease in the coming months. Rent increases have slowed from a record 17.2% in February to 8.4% in November. Data like this is encouraging for renters hoping to sign a new lease in 2023, but they should still keep a careful eye on the market and move swiftly if they locate a rental that meets their needs and budget.

Since rental rates are still higher than they were before the outbreak, compromise and adaptability will be required well into next year. Tenants with leases coming up for renewal should realize that they have greater leverage to negotiate this year and should look around at comparable rentals in the area before making a decision.

United States home values are predicted to decline between November 2022 and November 2023. Zillow forecasts that home value appreciation will continue to ease down over the coming months. The national Zillow Home Value Index, which rose 10.4% in the 12 months ending in November, is expected to fall 1.1% over the next 12 months.

For the 12 months from December 2022 to December 2023, Zillow projects only a 0.7% decline in the Zillow Home Value Index. High mortgage rates and major affordability challenges are predicted to drive weaker sales in 2023 when they are projected to total 4.4 million, a 13% decrease from the projected full-year 2022 total.

Zillow’s Bold Housing Market Predictions for 2023

As people look for new ways to overcome the housing affordability crisis, Midwestern markets will heat up, and more friends and family members will pool their money to buy homes together in 2023. That crisis, however, will stabilize – if not improve – from its pandemic-era apex. Rental units will be the focus of new construction, and we should see an increase in homeowners becoming first-time landlords. These are just a few of the new predictions made by the Zillow Economic Research team for 2023.

READ: Latest U.S. Housing Market Trends

READ: Will There Be a Drop in Home Prices in 2023?

National home values are still rising year-over-year, but at a much slower rate than the pandemic housing boom. Affordability constraints have triggered a power rebalancing in the housing market. Home sales are predicted to stay lower than in recent years – at least for the predictions for the next two years (2023 & 2024). Year-over-year home price growth slowed in 2022 as mortgage rates rose sharply, resulting in worsening housing affordability.

With mortgage rates still topping 6%, resulting in rapidly declining home purchase demand, home prices are expected to fall in 2023. Some housing markets are on the verge of a drop in home values within the next 12 months. Home prices are expected to dip over the next 12 to 18 months before stabilizing and then recovering, according to experts. Overall the predictions for the next five years are that home price appreciation is likely to range between 15 and 25%, but they will be uneven.

A drop in demand due to rising mortgage rates causes homes to stay on the market longer and slows price increases. Many would-be sellers are tied to low rates, making the switch to a more expensive mortgage difficult, and reducing inventories. This rebalancing gives wealthy purchasers more time to make decisions, less competition, and greater negotiation leverage than in recent years.

Homebuyers continued to be deterred by mortgage affordability problems, resulting in less competition and a larger supply of available houses. Since last year, the housing market has cooled dramatically, and homes are now staying on the market for much longer, whether they sell or not. As rates, and thus mortgage payments, stay high, many potential buyers are being priced out of the market, and affordability will likely not be on their side any time soon.

Housing Market Forecast 2024, 2025, 2026

There is an abundance of speculation regarding the forecast of the housing market in 2023. However, what about the real estate forecasts for 2023, 2025, and so on? Although, it is quite difficult to forecast the housing market for the next five years here is an insight into what most experts predict can happen.

Mortgage rates are at their highest point in 20 years, which is having a chilling effect on the housing market and driving down prices. But as supply remains constrained, housing prices in many U.S. markets have not yet begun to level off. Some experts have predicted the future of the housing market over the next five years. Only an oversupply can cause a crash.

The housing shortfall will last another year, with supply eventually catching up with demand by five years. The seller's market will persist as long as home inventory stays low. By five years, it is predicted to become a balanced housing market in which neither buyer nor seller has a monopoly. Instead, negotiation power between parties will be more equal and will vary depending on the circumstances.

Chief economist for the National Association of Realtors Lawrence Yun believes we are likely to see total price growth across the country of between 15% – 25% over the next five years. This forecast is likely to manifest as a decline in the coming year, a plateau in 2024, and then a period of relatively robust growth.

According to Greg McBride, the chief financial analyst at Bankrate, over the next five years, the US housing market is predicted to generate an average annual return in the mid to low single digits. In the long term, we are aware that real estate provides consistent returns above the rate of inflation. The longer the time frame, the more certain we can be about the general direction of travel, which has historically been upward in the real estate market.

According to Goldman Sachs, home prices in the United States will fall 5 to 10% over the next year. According to the same Goldman Sachs research, the housing market will bottom out in late 2023. Prices are projected to level off and remain relatively stable until mid-2024, so a turnaround is not anticipated to occur quickly.

Strong household finances and a relative lack of available homes in the United States could cushion a slowdown in the housing market. The economists believe it is unlikely that there will be a large wave of forced sales in the United States because a recession would likely be mild, the housing market is tight, mortgage quality is high, and the majority of mortgages have a fixed interest rate.

30-year fixed rate mortgage will remain around seven percent for the rest of 2022 and most of 2023. Assuming no major shocks occur, we should see rates of 5.5–6% within the next two years. Despite the fact that the residential real estate market has been exhibiting bubble-like characteristics, most experts do not anticipate a housing market crash. However, housing slowdowns brought on by rising mortgage rates have a tendency to weigh on GDP by reducing residential investment and weakening consumption.

The Zillow home price expectations survey found that the housing market is likely to become a buyer's market by 2023. The panel also predicts rent growth to outpace inflation during the next 12 months, as priced-out potential home buyers exert additional pressure on the rental market.

When will the housing market turn into a buyer's market, according to the panel?

  • The majority of panelists (56%) forecast a big shift in favor of buyers within the next year (sometime in 2023).
  • All 107 survey respondents project home price deceleration in 2023.
  • The share of panelists who believe their long-term outlook might be too optimistic jumped up to 67% from 56% last quarter.
  • Another 24% predicted that the housing market shift would come in 2024.
  • 13% expect the market to favor home buyers in 2025.
  • While just 8% expect that to happen by sometime in 2026 or sometime in the next five years.
  • Metros in the South and Midwest are the least likely to see price declines over the next year.
  • Vacation market areas are most likely to see price declines.
  • Rent growth and inflation should outpace stocks and home price appreciation over the next year.

Housing Markets Which Are Predicted to See a Decline in Home Prices

Prospective buyers are finally seeing a calmer market after the frantic rush for real estate over the last two years. Those who can still afford to own a home are quickly regaining lost leverage, but the transition to a more balanced market is still in its early stages. Home buyers priced out of the market face additional challenges, as high and rising rents may reduce their ability to save for a down payment even further.

According to survey respondents, the inexpensive Midwest markets that are least likely to see home price declines over the next 12 months are Columbus, Indianapolis, and Minneapolis, with only 36% reporting that home price declines from current levels were likely over the next 12 months. A majority of panelists expect fast-growing Southern markets like Atlanta, Nashville, and Charlotte to keep their hot streak going, with 44% predicting declines.

Markets expected to cool the fastest — with 77% of respondents expecting declines — are those that experienced the most growth during the pandemic, such as Boise, Austin, and Raleigh. The panel expects suburban and exurban areas to retain their heat over the next 12 months, while vacation and urban areas are expected to see price declines.

Rent growth should remain strong in the short term as high home prices keep many would-be first-time buyers in the rental market. Over the next 12 months, rents are expected to grow more than inflation, stocks, and home values. The panelists predict an average of 5.4% rent growth throughout 2023 – lower than the 8.6% annual growth they expect to see by the end of this year, but still higher than what Zillow data show to be just under 4% annual growth in the years prior to the pandemic.

Housing Market Predictions For Next 5 Years
Source: Zillow Home Price Expectations Survey

Real Estate Forecast Next 5 Years

According to some experts, the real estate forecast for the next 5 years shows that it will be a balanced market. Despite declining buyers' optimism that now is a good time to buy a house, the number of households interested in becoming homeowners remains high. This is especially true for younger homebuyers, who are likely first-time buyers and are struggling to save for a down payment as rents continue to reach record highs.

Simultaneously, seller expectations for larger down payments appear to be increasing, fueled by a still-competitive housing market and repeat buyers with relatively more available equity. The housing market is unlikely to shift from a seller's to a buyer's market anytime soon. Rising mortgage rates may take some of the steam out of the market, allowing inventory to rise slightly. It would also slow the rate of home price appreciation and reduce the possibility of a red-hot housing market resulting in an overheated market.

The supply of available homes is so low that even a significant drop in demand due to higher interest rates will not turn this into a buyer's real estate market, according to industry experts. Because there are not enough houses available to meet demand, home prices will continue to rise, but the combination of rising home prices and elevated mortgage rates means fewer people will be able to afford to buy.

There would still be continuous price appreciation, scarcity of inventory, and good demand. Some markets will experience lower appreciation rates than others, with the Sunbelt performing particularly well. Home prices do not appear to be decreasing, even in some of the country's most expensive markets, the tier-one markets.

According to CoreLogic, with gradually improving affordability and a more optimistic economic outlook than previously thought, the housing market may show resilience in 2023. The CoreLogic HPI Forecast indicates that home prices will decrease on a month-over-month basis by 0.1% from November to December 2022 and on a year-over-year basis by 2.8% from November 2022 to November 2023.

Year-over-year home price growth ended its 21-month streak of double-digit momentum in November, posting an 8.6% gain, the lowest rate of appreciation in exactly two years. Although 16 states bucked the national trend and saw annual double-digit increases, appreciation is decelerating in many popular housing markets across the country.

Southeastern states still led the country for price growth in November but also saw some of the most pronounced cooling. Similarly, relatively more expensive Western areas also posted substantial combined declines in recent months since spring’s peak. Nationwide, the recent price deceleration pushed November home values 2.5% below the spring 2022 peak. In 2023, home values will likely move even further from that high point, as CoreLogic expects price growth to begin recording negative year-over-year readings in the second quarter.

Nationally, home prices increased 8.6 % year over year in November. No states posted an annual decline in home prices. The states with the highest increases year over year were Florida (18%), South Carolina (13.9%), and Georgia (13.6%). Nationwide, the recent price deceleration pushed November home values 2.5% below the spring 2022 peak. In 2023, home values will likely move even further from that high point, as CoreLogic expects price growth to begin recording negative year-over-year readings in the second quarter.

The CoreLogic Market Risk Indicator (MRI), a monthly update of the overall health of housing markets across the country, predicts that Bellingham, WA is at very high risk (70%-plus probability) of a decline in home prices over the next 12 months. Crestview-Fort Walton Beach-Destin, FL; Salem, OR; Merced, CA and Urban Honolulu, HI are also at very high risk for price declines.

Top Markets at Risk of Home Price Decline in 2023
Source: CoreLogic

A worldwide research firm, Capital Economics, predicts that the U.S. house price rise will likely slow in 2023, not this year. In October, the firm revised its forecast from a 5% price decline to an 8% price decline. Moody’s Analytics also adjusted its insights in August, September, and October, estimating a steeper drop each month. The economic research firm now expects home prices to fall 10%, and that’s in a best-case-scenario. If a recession takes hold, prices could fall between 15% and 20%.

However, the firm does not forecast a spectacular “price decline” or a housing bubble bust similar to that of 2006, which precipitated the global financial crisis and the Great Recession. A 5 percent fall would definitely constitute a price decrease, but it would not cause home prices to spiral out of control. Remember that house prices have risen steadily for several years and surged significantly during the COVID-19 epidemic.

A price drop is noteworthy, but in the grand scheme of things, it is relatively little. Before the housing bubble of 2006, the U.S. housing market was primarily supported by exceedingly risky bank lending methods that produced a synthetic demand for housing, allowing those who could not afford to retain their homes to acquire them. According to analysts, today's market does not have the same circumstances.

According to analysts, today's market does not have the same circumstances. Capital Economic forecasts that mortgage rates would increase to 6.5 percent by 2023. According to Matthew Pointon, a senior property economist at Capital Economics, if home price growth follows our earlier predictions and declines to zero by mid-2023, mortgage payments would remain above their mid-2000s peak until mid-2023.

Where Will Home Prices Rise the Most in 2024?

Fortune magazine reached out to Moody’s Analytics to get access to its latest proprietary housing analysis, and according to it, home prices will increase by zero percent in 2023—a dramatic decrease from the 19.7 percent price growth the housing market experienced in the last 12 months. However, analysts anticipate that price changes will vary significantly between regions of the United States.

In its analysis, the financial intelligence firm calculated how home prices are likely to shift in 414 regional housing markets between the fourth quarter of 2022 and the fourth quarter of 2024. Among the nation’s 414 largest housing markets, Moody’s Analytics forecast model predicts that 210 markets are on the verge of seeing home prices decline over the coming two years and 204 markets are poised to see home prices rise over the coming two years.

These cities are expected to report the biggest rise in home prices in 2024:

  1. Albany, Georgia (5.5 percent)
  2. Casper, Wyoming (4.52 percent)
  3. Columbus, Georgia (4.09 percent)
  4. Rocky Mount, North Carolina (3.97 percent)
  5. San Jose, California (3.83 percent)

References

  • https://www.zillow.com/research/daily-market-pulse-26666/
  • https://www.zillow.com/research/zillow-2022-hottest-markets-tampa-30413/
  • https://www.zillow.com/research/zhpe-q3-2022-buyers-market-31481/
  • https://www.zillow.com/research/zillow-home-value-and-sales-forecast-september-2022-31431/#
  • https://fortune.com/2022/08/15/falling-home-prices-to-hit-these-housing-markets-in-2023-and-2024/
  • https://www.capitaleconomics.com/publications/us-housing/us-housing-market-update/surge-in-mortgage-rates-makes-house-price-falls-likely/

Austin Housing Market: Prices, Trends, Forecast 2023

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The Austin Housing Market is Cooling Off

Austin Housing Market
Data by ABoR. Forecast by other sources.

Austin's housing market is shifting. The market reflects what is happening in other major cities across the country. While activity appears to have slowed slightly in recent months, Austin's home prices are still on the rise. Home values are still increasing, albeit at a slower rate that is more typical of past trends. This is good news for homebuyers and indicates that the Austin housing market is strong because homes are still selling for close to the asking price.

The current trends indicate that a slowing growth rate in sales indicates market stabilization but the demand is still outpacing the supply in a market where housing prices have reached all-time highs. The market in Austin is by no means balanced since it still favors sellers, but buyers have greater negotiating power than at any time since the outbreak.

Homebuyers have not had this much leverage and this many options in over a decade. Austin is still a seller's market, but properties take longer to sell and are being acquired for less than the initial list price on average. The market has just now gotten up to three months of housing inventory (2.7 months as of December), which is still short of the 6 to 6.5 months of inventory needed to be considered a healthy market.

What's happening: According to the latest Central Texas Housing Market Report provided by the Austin Board of REALTORS®, in 2022, the median home price in the Austin-Round Rock MSA hit a new yearly record of $503,000. Despite this record, the housing market continued to tilt in favor of buyers as home sales decreased 18.3% to 33,547 homes sold last year and inventory climbed, with properties remaining on the market for 31 days, 11 days longer than in 2021.

  • In 2022, the median price in the MSA rose 11.4% to $503,000.
  • Sales dollar volume dipped 9.8% to yield a $21,018,159,929 impact on the Austin-area economy.
  • New listings stayed flat, and the year ended with 45,949 homes listed as pending sales dropped 24.2% to 31,633 homes.
  • In the month of December, closed listings across the MSA declined 31.5% to 2,435 year-over-year as sales dollar volume decreased 36.1% to $1,357,155,494.
  • The median sales price dropped 3.7% to $457,426.
  • New listings declined 15.1% to 1,828 listings, active listings skyrocketed 275.4% to 7,493 listings, and pending sales dropped 22.8% in December to 1,949 sales.
  • Last month, homes spent an average of 73 days on the market, 47 more compared to December 2021.

 

Real Estate Trends in Travis County – December 2022

Austin is the capital city of the U.S. state of Texas, as well as the seat and largest city of Travis County, with portions extending into Hays and Williamson counties. Data by ABoR revealed that in Travis County, residential home sales fell 23.8% to 15,705 in 2022, while dollar volume fell 16.1% to $11,556,937,031. The median price of residential properties rose 10.6% annually to $575,000.

In the previous year, new listings declined by 3.6% to 22,105, while active listings increased by 121.9% to 2,718 and pending sales decreased by 27.6% to 14,919. In December 2022, residential property sales in Travis County declined 44.9% to 984 purchases, while dollar volume decreased 47.8% to $649,319,748.

In addition, the median price declined 2.8% annually to $520,000. During the same time period, new listings decreased by 16.5% to 825, while active listings increased by 250.6% to 3,166 and pending sales decreased by 27.6% to 873. Monthly housing inventory increased by 1.9 months annually to 2.4 months.

Here are the housing market trends based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. In Dec 2022, the median listing home price in Travis County, TX was $575K, trending up 8.5% year-over-year. Travis County, TX was a buyer's market in Dec 2022, which means that the supply of homes is greater than the demand for homes.

  • There are 29 cities in Travis County.
  • Barton Creek has a median listing home price of $3.5M, making it the most expensive city.
  • Hornsby Bend is the most affordable city, with a median listing home price of $349K.
  • The median listing home price in Austin, TX was $599K, trending up 8.9% year-over-year.
  • There are 92 neighborhoods in Austin.
  • Zilker has a median listing home price of $1M, making it the most expensive neighborhood.
  • Tech Ridge is the most affordable neighborhood, with a median listing home price of $425K.
According to a new study, Austin homes are among the most overvalued in the United States. According to the study conducted by researchers from Florida Atlantic University and Florida International University, homebuyers in Austin are paying nearly 51% more than expected for houses. The only metro area where homebuyers pay a higher premium is Boise, Idaho, where homebuyers pay an astronomical 81 percent more.

When Zillow released its latest list of the top ten hottest housing markets in the United States, Austin was no longer ranked number one. Zillow previously ranked Austin as the hottest housing market but that ranking has slipped several spots for 2022. It ranks Austin at #10 now. According to Zillow's 2022 forecast, Tampa is the year's hottest housing market, with the city expected to top the list due to its relative affordability and high job growth.

Austin Housing Market Forecast 2023

What are the Austin real estate market predictions for 2023? Despite cooling off from its peak. Austin will remain a seller's market despite nationwide inflation and rising interest rates. The prices continue to rise across Austin MSA. The main reason is strong in-migration and a rapidly recovering local economy. According to the Census Bureau’s 2021 population estimates, Austin's population is increasing by 146 people every day. This type of expansion places immediate and substantial demands on infrastructure, especially housing.

Austin's rapidly expanding economic industry is driving more people into the city which is increasing the housing demand. A number of reasons have affected the present situation of the Austin housing market, one of which is the high migration of firms and persons relocating to the city from Texas and out-of-state, which has led to a robust and varied economy that attracts people seeking opportunity.

A surge of people moving in, combined with rapid population growth and low mortgage interest rates, has turned Austin and its surrounding area into a sellers' market. Austin’s engine of job and population growth is not projected to slow down anytime soon—the biggest drivers of residential real estate demand. Its economy has diversified and strengthened over the past two decades.

Companies like Google and Tesla are moving operations to Austin. The software giant Oracle has also relocated its headquarters here. As more companies move here, that means more people looking for homes, and the city is also attractive to outside investors. With a steady influx of job creation in the pipeline, the housing market will continue to post strong numbers well into 2022. Big companies moving here will also play into what happens to the housing market.

With an all-time high in corporate relocations, the housing demand is way up and the supply side cannot match up. All these factors indicate that this region has a higher probability of withstanding economic downturns due to the current pandemic. To determine the best local real-estate markets in the U.S., WalletHub compared 300 cities of varying sizes across 24 key indicators of housing-market attractiveness and economic strength. They looked at factors like median home-price appreciation to home sales turnover rate to job growth.

The city of Austin's real estate market came in at number 7 overall and 3rd among large cities. Boise was found to be the best market in the nation, followed by Seattle, Frisco, Nashville, and Gilbert in the top five. Let us look at the price trends recorded by Zillow (a real estate database company) over the past few years.  The typical value of homes in Austin is $619,096. Since the last twelve months, Austin's home values have appreciated by 0.1%.

NeighborhoodScout's data also shows that Austin real estate has appreciated 196.13% over the last ten years, which is an average annual home appreciation rate of 11.47%. This figure puts Austin in the top 10% nationally for real estate appreciation. During the latest twelve months (between 2021 Q3 – 2022 Q3), Austin's appreciation rate was 19.10%.

In the latest quarter (between 2022 Q2 – 2022 Q3), Austin's appreciation rate has been 6.82%, which annualizes to a rate of 30.20%. However, higher mortgage rates mean it's more difficult to afford a home now, but the reduced demand also means less competition. Therefore, the appreciation will remain very modest in 2023 depending on how the mortgage rates trend. For long-term investment, you cannot underestimate Austin. Investing in a rental property for the long term would build your equity and also generate cash flow through rental income.

Here's Zillow’s housing market forecast for Austin-Round Rock Metro. The Zillow Home Value Forecast (ZHVF) is the one-year forecast of the Zillow Home Values Index (ZHVI). ZHVF is created using all homes, mid-tier cut of ZHVI and is available both raw and smoothed and seasonally adjusted. Austin-Round Rock Metro's home values are expected to drop by 1.8% between December 2022 and December 2023. According to their forecast, the supply and demand dynamics will likely push down prices over the next 12 months.

These numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero. In terms of months of supply, Austin can become a buyer’s real estate market if the supply increases to more than five months of inventory. And that’s unlikely to happen in the near future. The inventory in Austin MSA is still short but with inventory steadily increasing, right now is a great time to be a homebuyer in Central Texas.

Austin Housing Market Forecast
Source: Zillow

Is Austin Texas Good for Real Estate Investment?

Should you consider Austin real estate investment? Many real estate investors have asked themselves if buying an investment property in Austin is a good investment. You need to drill deeper into local trends if you want to know what the market holds for real estate investors and buyers in 2023. Let’s discuss a bit about the Austin metro area and then do a quick recap of how its housing market performed during the pandemic.

Austin is a minimally walkable city in Travis County with a population of approximately 790,195 people. It is the capital of Texas and it is growing at a fast clip. It is the fourth largest city in the state of Texas. The Austin real estate market isn’t the largest in the state of Texas, but there are several reasons to consider buying real estate in this city. The Austin housing market has gained a lot of steam, with home values almost doubling since 2010. It isn’t as big as Dallas, San Antonio, or Houston.

However, the Austin housing market is sizable – it is the eleventh largest city in the U.S. as of this writing, and it is the center of a large metro area. Austin has come up as another tech hub in the last 5 to 6 years. There are tons of high-paying tech jobs that moved to Austin in the last couple of years. The Austin-Round Rock metro area is home to about two million people. Recently Austin was ranked eighth for the best real estate markets, topping all other big Texas cities.

As per Neigborhoodscout.com, a real estate data provider, one and two-bedroom single-family detached homes are the most common housing units in Austin. Other types of housing that are prevalent in Austin include duplexes, rowhouses, and homes converted to apartments. Single-family homes account for about 46% of Austin's housing units.

According to ABoR, Austin's competitive housing market is changing the landscape of traditional homeownership. More homebuyers purchase condos and townhomes to live closer to the urban core or stay within their budget. Austin has been one of the hottest real estate markets in the country for many years. It has a record of being one of the best long-term real estate investments in the U.S. over the past 10 years.

It is currently a moderate seller’s real estate market. Austin's immense population growth during the past decade has heavily impacted its real estate market. Although this article alone is not a comprehensive source to make a final investment decision for Austin, we have collected ten evidence-based positive things for investors who are keen to buy an investment property in Austin. Texas is unique for having a biannual legislature. They don’t have the state legislature in town year-round. Instead, they are only in session for several months every two years.

This leads to an influx of legislators, reporters, and lobbyists every other year. This creates a unique but predictable boom and bust for the Austin housing market in the vicinity of the capitol building. Let’s look at the state of the Austin real estate market and the factors driving the market in the short and long term.

Is Austin Housing Market In A Bubble?

Austin is one of only eight U.S. metro areas to have fully recovered in the last 10 years to pre-recession values. Would Austin remain as one of the top real estate markets in the country or would the bubble burst? Well, Austin isn’t considered to be in a real estate bubble because the demand is consistently high and inventory is very tight. This is good news for investors because you can expect steady activity and the flow of people looking for housing.

In 2019, Austin continued to rank high on “Best of U.S.” lists. There was a record number of home sales in 2019. The December and Year-End 2019 Central Texas Housing Market Report reflects a record-breaking 33,084 home sales and $13B in sales volume. According to the Austin Board of REALTORS® (ABoR), between 2010 and 2019 home sales increased by 84%. The median home price in Austin has increased from $193,520 in 2010 to $318,000 in 2019, and the market did not show any signs of slowing down from 2020 to 2021.

The price of Austin properties declined following the 2007 peak while prices remained relatively flat following the 1995 and 2000 peaks. According to a report published on Williamskw.com, Austin will remain a seller's market in 2022 despite higher mortgage rates. The National Association of Realtors (NAR) suggests a “balanced” market is between 4-6 months of inventory. The entire Austin market is around 0.5 months. Austin inventory levels did increase in March 2022, yet not nearly enough for Austin to be a “buyers” market. That is not expected to change.

As Austin is a young city by many standards, Millennials will be the largest buying force in Austin in the upcoming years. This is going to be more attractive for the areas being close to neighborhood amenities and close by shopping & hang-out spots. Real estate industry experts think that there is no bubble. Austin's economy is strong and varied. Overall there is a huge scarcity of homes for sale in Austin. It just hasn't kept up with the pace of people moving here.

Austin's Affordable Real Estate & Certain Future Appreciation

Homes in Austin are 23% cheaper than the national average. It may be the second most expensive housing market in the state with a median home price of around $461,000, but it is still far cheaper than California or New York. Buy up condos or townhomes, and you’ll be able to see a sizable return on the investment.

An author in Forbes wrote in 2016 that Austin real estate is appreciating at one of the highest rates in the state because of NIMBY-ism, a reluctance to develop the riverfront or Texas hill country to build new homes. This has pushed development out along the highway and forced dense development in areas already zoned for housing.

This pushes up the price of existing homes, driving many in the Austin housing market to rent when they want to buy, while it guarantees capital gains for those who buy and hold property. Here are the ten neighborhoods in Austin having the highest real estate appreciation rates since 2000—List by Neigborhoodscout.com.

  1. East Cesar Chavez / Holly
  2. Chestnut
  3. Central East Austin
  4. Govalle
  5. Holly West
  6. Central East Austin South
  7. Rosewood
  8. Johnston Terrace
  9. Springdale / MLK-183
  10. MLK

Cost of living In Austin

The Austin-Round Rock metro area is home to about two million people. The city is known as a haven for live music, free thinking, and free spirits. It has a distinct culture and flavor compared to the rest of Texas, which is a mostly conservative and traditional state. According to WalletHub, among large U.S. cities, Austin ranked eighth, topping all other big Texas cities as well as San Jose, Atlanta, and Portland. Among all 300 cities, Austin still ranked a respectable No. 36 for best real estate markets.

One of the factors driving the Austin real estate market is the intangible but well-documented quality of life the city provides. In 2017, US News and World Report ranked the city first for quality of life. In 2016, Austin was ranked first on the Forbes list of Cities of the Future list. In 2017, that same magazine ranked the South River City neighborhood as one of the best for Millennials. WalletHub ranked the city sixth in their list of best places to live in 2017. In 2012, the FBI ranked Austin as one of the safest cities in the country.

Aside from high housing prices, the cost of living in Austin is relatively affordable. Overall, the cost of living for Austin is very reasonable. At three percent below the national average cost of living, moving to Austin may be an economical choice for you. One of the most interesting factors in the cost of living for Austin is that the cost of housing is 15 percent below the national average.

According to Sperling’s Best Places, grocery costs in Austin are slightly below the national average, with a rating of 89.1 against the U.S. average of 100, meaning it is about 11 percent lower than the national average on groceries.

The sales tax rate in Austin is 8.25 percent. There are no income taxes in Texas. Schools are largely funded through property taxes, which rise along with home prices. As home prices continue to skyrocket and people are increasingly forced to move to the distant suburbs to find affordable housing, a massive reworking of Austin’s building codes, known as CodeNext, promised to deliver some relief.

The median salary in Austin, TX is $51,596 and it is the 108th most expensive city in a database of 232 cities by NerdWallet.com. For a 2-bedroom apartment, the median rent per is $1,184. The median price for a 3/2 bedroom house is $276,634. Food and entertainment costs in Austin are reasonable. Redwood Austin is the area with the lowest cost of living.

Areas With The Lowest Cost of Living in Austin – (List by Niche.com & prices by Livability.com)

  1. Redwood, Texas – Located in Guadalupe County. The median income in Redwood, TX is $47,778 and the median home value is $54,700.
  2. Lockhart, Texas – Located in Caldwell County. The median income in Lockhart, TX is $48,884 and the median home value is $115,400.
  3. Martindale, Texas – Located in Caldwell County. The median income in Martindale, TX is $43,929 and the median home value is $151,200.
  4. Uhland, Texas – Located in Hays County. The median income in Uhland, TX is $40,662 and the median home value is $78,100.
  5. Taylor, Texas – Located in Williamson County. The median income in Taylor, TX is $42,793 and the median home value is $116,600.
  6. Lago Vista, Texas – Located in Travis County. The median income in Lago Vista, TX is $75,126 and the median home value is $189,400.
  7. Elgin, Texas – Located in Bastrop County. The median income in Elgin, TX is $50,369 and the median home value is $104,000.
  8. Hornsby Bend, Texas – Located in Travis County. The median income in Hornsby Bend, TX is $49,077 and the median home value is $123,000.
  9. Round Rock, Texas – Located in Williamson County. The median income in Round Rock, TX is $72,412 and the median home value is $179,900.
  10. Wimberley, Texas – Located in Hays County. The median income in Wimberley, TX is $59,167 and the median home value is $214,600.

Austin's Massive Student Population Propels The Rental Investment

Many people want to invest in the Austin real estate market because there is a massive student population that will rent properties for a premium if they’re within easy commuting distance of the University of Texas Austin campus. That school alone has more than 40,000 students. The Austin community college hosts about as many students as UT Austin. Huston Tillotson University, Saint Edward’s University, and National American University are also located in this city.

Positive Demographic Momentum of Austin: About half of Austin’s population is between 18 and 44, though that figure is skewed by the large student population. However, the reality is that many college graduates choose to stay here because of the abundant, well-paying jobs. After all, Austin has the highest per capita of high-paying jobs of any Texas city. This helps explain why the Austin housing market is growing at the fastest rate of any major city in Texas. Many of these young adults are starting their families here, creating certain future demand for housing in the Austin real estate market.

Rental Market Statistics: Before the pandemic, the average rent for an apartment in Austin was growing at 5% annually (Source: RENTCafe). 48% of the households in Austin are renter-occupied which is a significant population. More than 65% of the apartments can be rented for $1,500 or less. Around 20% of the rental apartments fall in the price range of $1,500 to $2,000 while only 10% of the apartments fall in the rent price range of $2,000 or more.

The average size for an Austin, TX apartment is 864 square feet with studio apartments being the most affordable. 1-bedroom apartments are closer to the average, while 2-bedroom apartments and 3-bedroom apartments offer more generous square footage.

As of January 15, 2023, the average rent for a 1-bedroom apartment in Austin, TX is currently $1,650. This is a 4% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Austin decreased by -6% to $1,125. The average rent for a 1-bedroom apartment decreased by -1% to $1,650, and the average rent for a 2-bedroom apartment decreased by -3% to $2,031.

The Zumper Austin Metro Area Report analyzed active listings across the metro cities to show the most and least expensive cities and cities with the fastest growing rents. The Texas one bedroom median rent was $1,159 last month. Austin was the most expensive city with one bedrooms priced at $1,680 whereas San Marcos ranked as the most affordable city with one bedrooms priced at $1,280.

The best place to buy rental property is about finding growing markets. Cities like Round Rock, Cedar Park, and Pflugerville are good for investors looking to get started with rental property ownership at an affordable price. These cities look good for rental property investment this year as rents are growing over there. These trends provide a macro look at the growing rental demand. Each real estate market has its own unique supply-demand dynamics with unique neighborhoods that present their own opportunities for investors.

Here are the best areas to invest in a rental property in the Austin Metro Area. Most of these places have the same things in common, including rising rents and increasing property values. The Most Affordable Neighborhoods in Austin are University Hills where the average rent can go for $795/month, Heritage Hills, where the average rent can go for $795/month, and Windsor Hills, where the average rent can go for $833/month.

Where are rents growing fastest in Austin Metro Area (Y/Y%)

  • San Marcos had the fastest growing rent, up 19.6% since this time last year.
  • Kyle was second with rent climbing 14.2%.
  • Austin ranked as third with rent increasing 13.5%.

The Fastest Growing Cities For Rents in Austin Metro Area (M/M%)

  • Cedar Park had the largest monthly rental growth rate, up 2%.
  • Pflugerville was second with rent climbing 1.4%.
  • Austin was third with rent increasing 1.2%.
Austin Rental Market
Source: Zumper

Austin Is The Silicon Prairie

Austin Texas has been nicknamed Silicon Hills and Silicon Prairie because they’ve attracted so many high-tech employers. This has resulted in an active upscale Austin real estate market. Austin’s GDP, which grew 117% over the last 20 years, helped the real estate market recover from the recession.

The closest metro to see this type of growth was Silicon Valley, which grew its GDP by 99% during the same period. Major local employers in Austin include IBM, Amazon, Apple, Cisco Systems, and many semiconductor manufacturers. There are more than 3300 tech companies in the region and more than 100,000 tech workers all competing for homes in the Austin real estate market.

One of the long-term strengths of Austin is its diverse economy. The Austin real estate market dipped after the layoffs of the Dot-Com boom. They decided to solve the problem by encouraging medical and biotech employers to relocate to the area, too. As of this writing, there are 85 biotech and pharmaceutical companies in Austin.

Austin is a Relatively Friendly City for Landlords

Texas, in general, is very landlord-friendly, though cities can have their own, stricter ordinances. Texas doesn’t specifically let tenants withhold rent for failure to provide essential services. You can evict someone for nonpayment of rent after three days. Texas doesn’t set a limit on security deposits.

Texas doesn’t require a minimum time frame before you increase the rent. For major lease violations, you can terminate the lease then and there and give them three days to vacate. Knowing you won’t spend months trying to evict a non-paying tenant is a good reason to consider the Austin real estate market or another Texas housing market over more liberal cities.

The Excellent Tax Environment

Texas’ property taxes may be high, but this is offset by the lack of a state income tax. There is, overall, a low state and local tax burden for investors. That makes this a great place to buy a home and rent it out.

Texas Real Estate Investment Opportunities: Where To Invest?

With Austin becoming a more diverse city every year, there are plenty of opportunities to take advantage of – from buying new homes to different investment options in the Austin real estate market. Austin is a leader across the country with jobs and when you combine that with home prices not as drastically increasing, you'll get a real estate market that many others envy.

Good cash flow from Austin investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding the best investment property in Austin in a growing neighborhood would be key to your success.

As with any real estate purchase, act wisely. Evaluate the specifics of the Austin housing market at the time you intend to purchase. When looking for the best real estate investments in Austin, you should focus on neighborhoods with relatively high population density and employment growth. Both of them translate into high demand for housing.

Some of the popular neighborhoods in and around Austin are Northwest Hills, Downtown Austin, West Lake Hills, Brushy Creek, Barton Creek, Spicewood Summit, Mueller, South Austin, Hyde Park, Windsor Park, Crestview, North Austin, Allandale, Shady Hollow, Rollingwood and Steiner Ranch.

There are around 75 neighborhoods in Austin. Tarrytown has a median listing price of $1.5M, making it the most expensive neighborhood. West University is the most affordable neighborhood, with a median listing price of $325K. (on Realtor.com).

Downtown is where the city's high-rise buildings are located, as well as being the center of government and business for the region. Downtown Austin is expanding and the residential options are increasing.

The cost of real estate might be the highest in Austin, but residents live within walking distance of everything they need. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.

Apart from the Austin real estate market, you can also invest in the housing market of Houston, TX. If you are a home buyer or real estate investor, Houston has a track record of being one of the best long-term real estate investments in the nation through the last ten years.

The Houston Real Estate Market forecast is good, and current housing prices are relatively low, so if you want to get on board the Houston real estate investing then now would be a great time to do so.

The Houston metro area offers great opportunities for investors who are looking for a stable market that offers both cash flow and equity growth at a price that is STILL well below their replacement value.

The El Paso real estate market is another hot market to invest in. El Paso real estate market was ranked 4th in Trulia’s hottest real estate markets to watch in 2018. El Paso’s strong job growth, affordability, low vacancy rates, and high population of young households were pivotal in the ranking process.

The cost of living in El Paso is lower than the national average, while the cost of housing is well below that of other major metropolitan areas, including Houston and Austin.

The Central, Cielo Vista, and Mesa Hills areas offer more affordable rental properties for sale, while neighborhoods in the northwestern and eastern parts of the metro area have some of the more expensive housing inventory. The amount residents spend on everyday expenses, such as food and transportation, is slightly less than what the average American pays.

The next one is the San Antonio real estate market. The median home value in San Antonio is $184,322. San Antonio home values have gone up 4.8% over the past year and Zillow predicts they will rise 1.9% by Dec 2020. For those who want to invest in rental real estate, the San Antonio real estate market is an ideal location because of its outsized military presence.

Fort Sam Houston is located inside the city limits. Lackland Air Force Base, Randolph Air Force Base, Camp Bullis, and Camp Stanley are located in the immediate vicinity. This means that there is a large population that will almost always rent because they don’t know where they’ll be sent on their next assignment.

San Antonio has a dearth of affordable housing because demand is so much greater than the supply. This has created a large number of renters who need to pay quite a bit to rent apartments or single-family homes. We know there is a lack of housing relative to demand when a balanced market has a 6 month home inventory and San Antonio has only a two-month inventory.

How can we not mention Dallas on this list? The Dallas housing market 2020 is shaping up to continue the trend of the last few years as one of the strongest markets in the United States. Despite some fluctuations in the market, demand and sales have continued to climb at a feverish pace for more than two years and show no signs of stopping.

Dallas’s local economy is a mix of aerospace, computer chips, telecommunications, transport, energy, and healthcare sectors and the Finance and Business Services. These sectors are all providers of good wages which allows for a strong market for Dallas investment properties.

Dallas’s population has grown at twice the national rate for years now and this pushes the prices of Dallas investment properties higher due to builders not being able to keep up.

Dallas’s housing prices have increased 29% over the last three years, even with these increases in home prices, they are still competitive for investment properties and you can expect further increases over the years. If you want to buy an investment property in Dallas, don’t wait around, go ahead and do it.

NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Austin.

Consult with one of the investment counselors who can help build you a custom portfolio of Austin turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Austin.

Not just limited to Austin or Texas but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching and structuring complete Austin turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.

Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.

Let us know which real estate markets in the United States you consider best for real estate investing! 

This article shouldn't be used to make real estate or financial decisions. Some of this article's information came from referenced websites. Norada Real Estate Investments provides no express or implied claims, warranties, or guarantees that the material is accurate, reliable, or current. All information should be validated using the below references. Norada Real Estate Investments does not predict the future US housing market. This article educated investors on Austin real estate. Buying a rental property needs research, planning, and budgeting. Not all investments are good. Always do research and consult a real estate investment counselor.

References

Market Data, Reports & Forecasts
https://www.abor.com/new-center/market-stats
https://www.zillow.com/austin-tx/home-values
https://www.realtor.com/realestateandhomes-search/Austin_TX/overview
http://austin.culturemap.com/news/real-estate/08-30-18-austin-home-foreclosures-rise-report

Foreclosures
https://www.realtytrac.com/statsandtrends/tx/travis-county/austin

Apartment Prices & Trends
https://www.rentcafe.com/average-rent-market-trends/us/tx/austin/
https://www.rentjungle.com/average-rent-in-austin-rent-trends/

Reasons to consider investing in Austin
https://www.austintexas.gov/invest-here
https://www.usnews.com/best-colleges/university-of-texas-3658
https://www.collegesimply.com/colleges/texas/austin/four-year-colleges/
http://capstonecapitalusa.com/the-most-friendly-8-landlord-states
https://www.rentcafe.com/blog/renting/states-best-worst-laws-renter
http://austin.culturemap.com/news/real-estate/09-11-18-best-real-estate-markets-in-us-austin-wallethub

Is Austin In A Bubble
https://www.quora.com/Is-the-Austin-real-estate-market-a-bubble-If-so-when-will-it-burst
https://www.williamskw.com/blog/5-Predictions-for-the-Austin-Real-Estate-Market-in-2018/53486

Cost of Living
https://livability.com/tx
https://www.tripsavvy.com/austins-cost-of-living-255111
https://www.bestplaces.net/cost_of_living/city/texas/austin
https://www.nerdwallet.com/cost-of-living-calculator/city-life/austin
https://www.niche.com/places-to-live/search/suburbs-with-the-lowest-cost-of-living/m/austin-metro-area
https://www.forbes.com/sites/scottbeyer/2016/08/31/why-is-austins-housing-more-expensive-than-other-texas-cities/#10556d3d6121

Florida Real Estate Forecast Next 5 Years: Will it Crash?

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Inflation and high-interest rates remained an issue for purchasers in the Florida housing market in 2022, according to the latest housing data from Florida Realtors®. However, the state's housing market recorded higher median prices and a larger inventory (active listings) compared to a year ago. In 2022, the closed sales of single-family homes statewide were 287,352, down 18% year-over-year, while existing condo-townhouse sales reached 125,494, down 21.7% year-over-year.

The statewide median sale price in Florida for single-family homes in 2022 was $402,500, up 15.7% year-over-year. For condo-townhouse units, it was $306,500, up 21.6% year-over-year. The supply of for-sale homes continues to slowly build, easing inventory constraints in many markets across the state. Statewide inventory was higher last year than a year ago for both existing single-family homes, up 116.8%, and for condo-townhouse units, up 65.0%. The supply of single-family existing homes increased to a 2.7-months supply while existing condo-townhouse properties were at a 2.8-months supply in 2022.

When house prices are as high as they are now, increases in mortgage rates and homeowners insurance might have a major impact on a homeowner's monthly payment and drive affordability out of reach. U.S. News & World Report announced its rankings of the most and least affordable states for housing and total cost of living. When producing statistics on Florida's housing affordability, experts compare median house prices to median family incomes and mortgage interest rates. Florida is ranked #31 in affordability, indicating that it has one of the least affordable housing markets among the fifty states.

Florida Real Estate Forecast Next 5 years

Florida home values have risen by about 80% over the past 5 years and a positive trend is forecasted for the next 5 years. With the recent spike in mortgage payments as a result of rising interest rates, analysts are watching the Florida housing market closely to see what effect this will have. It is likely to restrict house price increases, but to what amount is unclear because there is still a “fear of losing out” attitude among purchasers, which is fueling the market, although slowly.

It's no surprise that Zillow has ranked Tampa, Florida, as the top real estate market in the United States in 2022. Overall, Florida housing prices have witnessed some of the most dramatic increases in the country, with Miami and Tampa at the forefront of the upswing. Due to a variety of variables, the housing market in Tampa has outpaced many others, including a large number of potential buyers, a scarcity of supply, strong property sales, and an active employment market in the area.

Overall, the Florida housing market is strong and is predicted to remain so in the next five years. If you're a seller, this is wonderful news since it implies property values are rising and there isn't much selling competition, giving you the luxury of selecting from the best offers on your schedule. Higher mortgage rates may cause unprepared house buyers to postpone their purchases.

If this reduces buyer demand sufficiently in some Florida areas, price appreciation may decrease. The lower price increase may provide remaining buyers who can afford higher interest rates more confidence in locating a home they can afford. And that leads to fewer home sales. If you're selling a home in Florida this year, the odds are good that you'll come out ahead financially. Real estate prices and mortgage rates are rising, and the few affordable houses that remain are being snapped up like sardines. If you want to buy in this market, now’s not the time to buy.

Whether or not the country enters a recession, the housing market appears to be in good shape for the foreseeable future. Perhaps not at the same rate that the United States has lately seen, but growth nevertheless. This is an excellent moment for real estate investors, particularly those interested in Florida, to capitalize on market possibilities.

Florida Real Estate Appreciation Rates For 10 Years

Florida's real estate market has seen unprecedented price rises during the last few years, as a result of a lack of supply and high demand. Most of the emphasis is focused on the prices and the possibility of a housing bubble. While Florida's mild temperature, cheap taxes, and natural attractions have historically enticed newcomers to the state, if affordable housing challenges continue to prevail across the state, these enticing elements may go away.

A post-pandemic world necessitates that the state of Florida deal with the fact that pricey housing can in certain respects impede economic growth and have an unequal impact on critical segments of the population. Florida has had some of the strongest housing appreciation rates in the country over the past decade.

Over the past decade, Florida's real estate has risen 282.35 percent, which equates to an annual home appreciation rate of 6.14 percent, according to the data collected by NeighborhoodScout. If you are a house buyer or real estate investor, Florida has been one of the finest long-term real estate investments in the United States over the past decade.

Florida’s housing market mirrors larger national trends, albeit with some regional variation. An imbalance between demand and supply has fueled rapid home appreciation across the state. The real estate appreciation rate in the Sunshine State in the last two years (Between 2020 Q3 – 2022 Q3) has been 53.28 percent. Considering the most recent twelve months tracked by them (2021 Q3 – 2022 Q3), Florida's home appreciation rates continue to be among the highest in the United States, at 26.35 percent.

The quarterly appreciation rates (Between 2022 Q2 – 2022 Q3) in FL were 4.36 percent, which amounts to an annual appreciation rate of 18.60 percent. However, high mortgage rates are pushing a lot of buyers out of the market, which can present opportunities for those who are staying in but it will also moderate the rate of appreciation over the next twelve months.

As of October 31, 2022, the typical value of homes in Florida is $404,939 (Zillow Home Value Index). Florida home values have grown by 19.9% over the last twelve months and the median days to pending is 27.

  • The median sale-to-list ratio is 0.983
  • 18.1% Percent of sales over list price
  • 61.8%Percent of sales under the list price

Within Florida, Tampa Bay has one of the most overpriced housing markets in the nation, according to new research from Florida Atlantic University. Extremely low mortgage rates drove our red-hot housing market, particularly during the epidemic, and intensified bidding wars. Lakeland ranks 12th nationally, and second in the state, with homes overvalued by more than 53.2%. North Port-Sarasota-Bradenton is No. 17 nationally, fourth in the state at 48.9%.

Florida Housing Market Trends

According to Redfin, in December 2022, home prices in Florida were up 5.8% compared to last year, selling for a median price of $384,500. On average, the number of homes sold was down 38.1% year over year and there were 27,233 homes sold in December this year, down from 43,985 homes sold in December last year. The median days on the market was 47 days, up 17 days year over year.

Top 5 Metros in Florida with the Fastest Growing Sales Price

Marco Island, Florida:  The Marco Island housing market is not very competitive. The average sale price of a home in Marco Island was $1.01M last month, up 33.8% since last year. The average sale price per square foot in Marco Island is $610, up 2.8% since last year. The average homes in Marco Island sell for about 5% below the list price and go pending in around 73 days. Hot homes can sell for about 1% below the list price and go pending in around 16 days.

Venice, Florida: The Venice housing market is somewhat competitive. Homes in Venice receive 2 offers on average and sell in around 23.5 days. The average sale price of a home in Venice was $500K last month, up 27.3% since last year. The average sale price per square foot in Venice is $288, up 14.5% since last year. The average homes in Venice sell for about 3% below the list price and go pending in around 24 days. Hot homes can sell for around the list price and go pending in around 6 days.

Dunedin, Florida: The Dunedin housing market is somewhat competitive. Homes in Dunedin receive 1 offer on average and sell in around 29 days. The average sale price of a home in Dunedin was $487K last month, up 26.4% since last year. The average sale price per square foot in Dunedin is $333, up 23.3% since last year. The average homes in Dunedin sell for about 4% below the list price and go pending in around 29 days. Hot homes can sell for around the list price and go pending in around 8 days.

Sebastian, Florida: The Sebastian housing market is somewhat competitive. Homes in Sebastian receive 3 offers on average and sell in around 68 days. The average sale price of a home in Sebastian was $375K last month, up 25.3% since last year. The average sale price per square foot in Sebastian is $209, up 5.0% since last year. The average homes in Sebastian sell for about 3% below the list price and go pending in around 68 days. Hot homes can sell for around the list price and go pending in around 31 days.

North Miami, Florida: The North Miami housing market is somewhat competitive. The average sale price of a home in North Miami was $385K last month, up 24.1% since last year. The average sale price per square foot in North Miami is $295, up 25.0% since last year. The average homes in North Miami sell for about 4% below the list price and go pending in around 59 days. Hot homes can sell for around the list price and go pending in around 33 days.

Florida Housing Market Annual Report (Year-End)

Here's Florida's statewide housing market data for single-family homes as reported by Florida Realtors for the previous year.

Florida Single-Family Home Sales

  • The number of sales transactions closed in 2022 was 287,352, -18% year-over-year.
  • The number of Closed Sales in 2022 in which buyers exclusively paid in cash was 92,051, -12% year-over-year.
  • The percentage of Closed Sales which were Cash Sales was 32.0%, +7% year-over-year.
  • Cash Sales can be a valuable measure of the level of market participation by investors.
  • Investors are far more likely to have the cash on hand to purchase a house, whereas the average homeowner requires a mortgage or other type of financing.
  • Florida home sales dropped in most price segments in 2022.
  • The highest closed sales were reported in the market segment of $400,000 – $599,999 (81,155 sales).
  • It was followed by the $300,000 – $399,999 segment which reported 43,683 sales.
  • These two were the only market segments that reported year-over-year gains in home sales.

Florida Single-Family Home Prices

  • The median sale price reported for the year (i.e. 50% of sales were above and 50% of sales were below) was $402,500, +15.7% YoY.
  • The average sale price reported for the month (i.e. total sales in dollars divided by the number of sales) was $562,442, +11.3%.
  • The sum of the sale prices for all sales which closed during the month was $161.6 Billion, -8.7% YoY.
  • It is a powerful predictor of the strength of the real estate business in a market, and real estate professionals, investors, and analysts are especially interested in it.
  • The Median Percent of the Original List Price Received was 100.0% in 2022, the same as in 2021.

Days on Market

  • The median number of days between the listing date and contract date for all Closed Sales during the month was 14 days, 2 days more than the previous year.
  • The median number of days between the listing date and closing date for all Closed Sales during the month was 56 Days, 1 day more than the previous year.

New Pending Sales

  • The number of listed properties that went under contract in 2022 was 290,375, -21.1% YoY.
  • Pending Sales are considered to be a decent indicator of potential future Closed Sales.

Florida Housing Supply

  • The number of New Listings put onto the market during the year was 366,296, -3.0% YoY.
  • The number of property listings active at the end of the year was 65,786, +116.8% YoY.
  • Months Supply of Inventory in the Florida Housing Market was 2.7 months, +170% YoY.
  • MSI is a useful indicator of market conditions.
  • The benchmark for a balanced market (favoring neither buyer nor seller) is 5.5 months of inventory.
  • Anything higher is traditionally a buyers' market and anything lower is a sellers' market.

When Will the Housing Market Crash in Florida?

Population growth, and particularly growth in the number of households, lead to a growth in housing demand. Real estate is subject to the law of supply and demand: when there are more purchasers than available homes, prices rise.  Since the 1940s, Florida's population has increased year after year, often outperforming the national average. However, like the rest of the United States, growth plummeted to historic lows during the initial years of the pandemic until rebounding last year.

Florida is now America's fastest-growing state. According to recent census data, the Sunshine State added over 400,000 additional people between July 2021 to July 2022. It was a growth of 1.9%, bringing the total population to 22,244,823. That makes it faster-growing than Texas, which has the second-largest population in the United States, trailing only California.

According to experts, the national housing market or the market in Florida is nowhere near the crash that occurred during the Great Recession of 2008. This is partially due to tighter lending laws coming from the financial crisis. Borrowers are in considerably better shape, as seen by their improved credit scores. And as a result of rising home values, homeowners have a record amount of equity.

The current situation is a fairly complex web, but it's nothing compared to the 2008-2009 market crisis, which took years to unravel. The Fed's pandemic actions fueled a housing boom. As it tries to withdraw that support, it could be bad news for housing but will it lead to a crash? The Fed will continue to play a crucial role in the future of the housing market.

Back in February 2020, the Fed owned $1.4 trillion in mortgage-backed securities, and the number was falling rapidly. As the pandemic took root, however, the central bank initiated a new round of bond purchases (known as “quantitative easing”), bringing the number to $2.7 trillion.

Fed seeks to tighten monetary policy to combat inflation Although it wants to shrink that portfolio it is quite improbable that the Fed can unwind its balance sheet. It might simply accept the fact that it will continue to play a disproportionate role in the housing market and have a larger balance sheet than it would prefer. Prepare for a collapse, not a correction, in the housing market during the next 18 to 24 months if they do.

According to the financial services business Moody's Analytics, a majority of Florida's metropolitan regions are overpriced by more than 20 percent based on these parameters, which apply to two dozen metropolitan areas. Here are the states with the most inflated housing markets as of the first quarter of this year. Unsurprisingly, coastal regions top the list. At 57 percent overpriced, the Homosassa Springs Metropolitan Service Area (MSA), which encompasses Citrus County, took the top rank. It was also the fourth-best ranking in the nation.

Florida’s Top 10 “Most Overpriced” Housing Markets (By Moody’s Analytics)

  • Homosassa Springs MSA (57%)
  • Palm Bay-Melbourne-Titusville MSA (48%)
  • Punta Gorda MSA (45%)
  • Vero Beach-Sebastian MSA (42%)
  • Port St. Lucie MSA (40%)
  • Crestview-Fort Walton Beach-Destin MSA (40%)
  • Cape Coral-Fort Myers MSA (39%)
  • Miami-Miami Beach-Kendall Metropolitan Division (39%)
  • Naples-Immokalee-Marco Island MSA (38%)
  • North Port-Sarasota-Bradenton MSA (38%)

These price increases are problematic for Floridians for a variety of reasons. Although industry experts expect that the market will eventually recover, as it always does, these increased property prices may persist for some time. But when it decelerates, homeowners will not profit as much.

“Florida homeowners are much wealthier due to the rise in property values across much of the state, but not as affluent as they may believe,” Zandi said. It will be more difficult for homeowners to move up to a more costly property or use their home's equity to fund their expenditures. In addition, many middle-to-low-income people and first-time homebuyers are priced out of the market, according to Zandi, since they cannot afford not only the high sale prices but also the increasing mortgage rates and homeowners insurance.

10 Florida Markets Are Overvalued, According To A Rental Trends Study

According to new research on rental market trends, the Florida rental housing market is among the most overpriced in the country and has among the fastest-rising prices. The moratorium's expiry, along with the high demand for rentals, particularly in Florida, pushed rental costs skyrocketing. Landlords will continue to hike rents until additional rental units are developed, pricing off many middle-class customers who previously rented because they couldn't afford to purchase.

The research of 107 U.S. rental areas, published on June 6 and based on April data, discovered that ten of the country's most overpriced rental markets are in Florida. All ten Florida markets covered in the analysis are overpriced by more than 13 percent. The Miami market, which encompasses Miami-Dade, Broward, and Palm Beach counties, was identified as having the highest “premium” paid by renters.

The investigation revealed that it was 22.07 percent overpriced. The average monthly rent in South Florida increased to $2,846, despite historical data indicating that the average should be just $2,331. In the Fort Myers region, rental expenses increased the most year-over-year. The average rent is now $2,073, an increase of 32.38 percent from one year ago. The rental prices in the nine other Florida markets included in the research increased by more than 20 percent annually, and they all ranked in the top 15 out of 107 areas for this criteria.

“A lot of our Florida markets are way overpriced compared to the rest of the country,” said Ken H. Johnson, a real estate economist at the Florida Atlantic University College of Business, who is a co-author of the study.

Florida Housing Market Predictions 2023

Florida has one of the nation's hottest housing markets. Home sales usually are directly tied to an economy's health and rise and fall with economic activity. As economies slow, the supply of money tends to become more restrictive. As money becomes harder to borrow, fewer home buyers enter the housing market.

With year-round sunlight (giving it the nickname “The Sunshine State”) and world-class amusement parks, Florida is a popular worldwide tourist destination. The economy is active and varied, with dozens of international corporate headquarters. Eighteen companies with headquarters located in Florida earned a place on Fortune magazine’s 2020 list ranking enterprises with the 500 highest fiscal-year revenues in the nation.

Florida’s Economy Continues to Thrive

  • Florida’s seasonally adjusted unemployment rate was 2.5 percent in December 2022.
  • It was down 0.1 percentage points from the November 2022 rate, and down 1.0 percentage points from a year ago.
  • There were 271,000 jobless Floridians out of a labor force of 10,761,000.
  • The U.S. unemployment rate was 3.5 percent in December.
  • Florida gained 440,000 jobs over the year, an increase of 4.8 percent.
  • Nationally, the number of jobs rose 3.0 percent over the year.
  • All nine major private sector industries in the state have surpassed pre-pandemic employment levels.
  • In December 2022, Miami-Dade County and Monroe County had the state’s lowest unemployment rate (1.4 percent each).
  • It was followed by St. Johns County (1.8 percent), and Wakulla County & Okaloosa County (1.9 percent each).
  • Highlands County had the highest unemployment rate (3.6 percent) in Florida in December 2022,
  • It was followed by Citrus County (3.5 percent), and Sumter County (3.4 percent).

Industries gaining the most jobs over the month were:

  • Leisure and hospitality with (+88,600 jobs, +7.4 percent).
  • Education and health services (+83,800 jobs, +6.2 percent).
  • Trade, transportation, and utilities (+82,700 jobs, +4.4 percent).
  • Professional and business services (+53,400 jobs, +3.6 percent).

Florida is a Hot Spot for Real Estate Investment for a Few Reasons

Florida's strong population growth, diverse job market, tourist attractions, affordable property prices, tax benefits, and diversified economy all contribute to making it a hot spot for real estate investment.

1. Strong population growth and job market: Florida has strong population growth, particularly in cities like Miami, Orlando, and Tampa. This leads to an increased demand for housing, making it a prime location for real estate investment. Additionally, Florida's job market is diverse and growing, which attracts new residents and supports the demand for housing.

2. Tourist Attraction:  Florida is a booming real estate market due to tourism. Florida attracts millions of tourists annually. In tourist-heavy areas like Miami, Orlando, and others, vacation rental properties are in high demand. Vacation rentals offer greater space, privacy, and facilities than hotels for Florida tourists. Investors can earn rental income and gain property value via vacation rentals.

Vacation rental properties are more reliable and profitable than typical rental properties due to high demand. Tourists pay extra for comfortable vacation rentals. Tourist demand can remain consistent throughout economic downturns, making vacation rental properties more market-resilient. Florida's great tourist draw can offer real estate investors looking for vacation rental properties a reliable and successful revenue stream and property value appreciation.

3. Affordable property prices: Compared to other states like California, property prices in Florida are relatively affordable, which can make it an attractive option for real estate investors. This can lead to strong returns on investment and can make it easier for investors to purchase multiple properties. It's important to note that property prices can vary widely depending on location and property type. While some areas of Florida may have lower property prices, other areas, such as beachfront or tourist-friendly areas, may have higher property prices.

4. Tax Benefits: Florida has no state income tax, which can be a significant advantage for real estate investors. This can lead to higher net returns on investment and can make it a more attractive option for real estate investors.

5. Diversified economy: Florida's economy is diverse, with a mix of industries such as agriculture, tourism, aerospace, and technology. This diversified economy can help insulate the state from economic downturns, which can be beneficial for real estate investors.

However, it's always important to do proper research, understand the market and the property before investing, and have a solid plan in place for managing risks.

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