Norada Real Estate Investments

NYC Housing Market Report: Rent Prices Are Skyrocketting

by

Renters should brace themselves for significant increases in rent prices as we enter the second half of the year. Despite the fact that New York City is swiftly adjusting to a new normal in the aftermath of the pandemic, the NYC rental housing market is hampered by historically low inventory levels. Because of the abnormally tight rental market conditions, rents are anticipated to rise more, at least until the seasonal decline in demand for rentals that occurs after the summer.

Despite continuously improving inventory, landlords are racing to reverse the pandemic discounts they provided, forcing rents to rise. Despite a large increase in the number of people leaving the city throughout the pandemic, the number of persons looking for rental homes has remained continuously high. The removal of rental incentives is yet another sign that landlords remain hopeful about demand. Because of the high rents in Manhattan, many people are eager to relocate to the more affordable neighborhoods of Brooklyn and Queens.

According to a report published by New York Post, the average rental price in Manhattan, Brooklyn, and Queens has risen to a new all-time high. Beginning last month, various factors contributed to the excessive rental market in New York, including a lack of availability, rising mortgage rates, peak season, and the Housing Stability Tenant Protection Act, which was enacted in 2019 and enacted expanded tenant eviction protections. Rising Fed interest rates have pushed would-be home purchasers into the rental market, making an already tight market even tighter.

“People who were thinking about moving somewhere else, let’s say in the suburbs, where mortgage rates are 3.1 percent at the end of December, now they are in fives; that is a significant increase,” Jonathan Miller of Miller Samuel who analyzed the findings told The Post. “So those people who were perhaps looking at that as an option might be sitting put. And sitting puts fewer apartments available. So the irony of this Fed move is while it’s cooling the purchase market, it is putting more pressure on the rental market.”

Douglas Elliman, a real estate agency in New York, has released a report analyzing the median rental pricing across the five boroughs, and it does not appear to be slowing down any time soon.

NYC Housing Market – Rental Report

Manhattan

Average rental price: $5,058; Median: $4,050

The median rental price for Manhattan is now at an average of $4,050, which is $800 over what it was just a year ago, according to the eye-opening June market reports compiled by Douglas Elliman and Miller Samuel. Specifically, the average rental price in Manhattan has reached $5,000 for the first time in Big Apple History. The median rent is the mid-point value of the total price samples. Average rent is the sum of all rents divided by the number of the sample size.

NYC housing market report
Source: New York Post composite

The average rental price of $5,058 indicates that a tenant would spend roughly $61,000 annually on housing alone, as the median rent has set a record for the fifth consecutive month. The number of new leases increased for the fifth consecutive month, and the vacancy rate stayed below 2 percent for the seventh consecutive month. The average rent for a studio apartment is $3,145, while a one-bedroom apartment costs $4,278, and a two-bedroom apartment averages $5,722.

Brooklyn

Average rental price: $3,822; Median: $3,300

Average rental prices in Brooklyn reached $3,822 per month, up about $100 from last month’s average. That marks a new high for the borough for the second straight month. According to Elliman's report, the average monthly rent for a studio is now $2,284. A one-bedroom apartment rents for an average of $3,240, while a two-bedroom apartment costs $4,040.

Last year at this time, the median rent was approximately $500 less, or $2,700 per month. Last summer, studio apartments offered an 11.2% discount, one-bedroom apartments offered a 25.3% discount, and two-bedroom apartments offered a 26.8% discount. Since then, prices have increased between 20 and 50%.

Northwest Queens (Long Island City, Astoria, Sunnyside, Jackson Heights)

Average rental price: $3,352; Median: $2,973

Queens is still the most affordable option when it comes to renting, although prices have risen for the second consecutive month. Monthly rental costs averaged $3,352 with a median of $2,973. In comparison, the median rental price in the Northwest section of Queens was $2,700 at this time last year, roughly $300 less than it is today.

The average monthly rent for a studio is approximately $2,782, according to the most recent research by Elliman. A one-bedroom apartment averages slightly over $3,000 per month, while a two-bedroom apartment costs approximately $4,168 per month. For New Yorkers or those hoping to wait it out, you may have to wait a little longer. If rents hit an affordability barrier beyond which they cannot increase, this does not imply that they decrease; rather, it merely indicates that they do not increase.

Source: https://nypost.com/article/where-nyc-real-estate-rental-market-stands-right-now-housing-prices/

Where to Buy Chicago Investment Properties in 2022?

by

Looking to invest in the Chicago real estate market? If you're wondering where should you buy Chicago investment properties, you'll find all the answers here, in one place. Chicago is one of the major cities in the U.S., where you can find affordable investment properties for sale. However, not every neighborhood in Chicago is desirable for residents, and many desirable neighborhoods are a poor choice for real estate investment.

On this page, you’ll learn about some of the best neighborhoods for buying Chicago investment properties. The average property in Chicago costs just over 345,000 dollars. According to Redfin, a real estate brokerage, the Chicago housing market is somewhat competitive. The average homes sell for about 1% below list price and go pending in around 56 days but hot properties can sell for about 2% above list price and go pending in around 34 days.

In March 2022, Chicago home prices were up 0.7% compared to last year, selling for a median price of $345K. On average, homes in Chicago sell after 59 days on the market compared to 36 days last year. There were 3,222 homes sold in March this year, up from 3,216 last year. Chicago properties come in at around 260 dollars a square foot; this value increased roughly nine percent year over year.

The average home in New York costs nearly a million dollars, while a cheap home in Los Angeles costs half a million dollars. This makes Chicago investment properties a relative bargain. The average rent for a one-bedroom apartment is roughly a thousand dollars. Two-bedroom apartments in Chicago cost an average of 1300 dollars a month. Chicago rents have increased by 1.65% compared to last month, and are up by 11.16% compared to last year. The average rent for a Chicago 1-bedroom apartment is $2,155 while the average rent for a 2-bedroom apartment is $2,771.

As of March 2022, the median home price in the Chicago Primary Metropolitan Statistical Area is $310,000, up 5.1% from March last year. e Chicago PMSA has yet to revert to their pre-Covid levels on average. In the Chicago PMSA, the March 2020 median sale price was $260,000 (in $2020) and $290,000 (in $2022); the comparable figure for price recovery in March 2022 is 107% after adjustment (119% before adjusting). The median price forecast presented by UIC SHDRE indicates positive annual growth for April, May, and June in both Illinois and the Chicago PMSA, according to a recent report released by Illinois Realtors®.

The median price in Chicago PMSA is predicted to increase by 10.3% in April, 8.8% in May, and 8.8% in June. As a complement to the median housing price index (HPI), the SHDRE HPI forecasts a positive growth trend for the Chicago PMSA. In Chicago PMSA, the SHDRE HPI (Jan 2008=1) is forecast to change by 10.3% in April, 8.8% in May, and 8.8% in June. SHDRE (Stuart Handler Department of Real Estate) HPI takes housing characteristics into account and constructs comparable “baskets” of homes for each month.

Realtor.com also predicts a positive annual appreciation albeit slower than last year. According to them, Chicago-Naperville-Elgin, Ill.-Ind.-Wis. median price will appreciate by only 1.9% over last year (by the end of 2022).

Chicago Investment Properties For Sale

Should You Invest In Chicago Investment Properties?

Chicago is on the UBS list of the world’s richest cities. It is often rated as having the most balanced economy in the United States. For those who wish to invest in Chicago investment properties, know that there are several neighborhoods in this city that present a great opportunity to investors.

This is true whether you want to cater to families searching for starter homes, growing families, or the general rental population. Strong economic and job growth makes Chicago an ideal place for real estate investment. It is home to 12 Fortune Global 500 companies and 17 Financial Times 500 companies, having the third-largest gross metropolitan product in the United States.

Chicago has high private sector employment leading to a strong rental market, with over 50% of the population of renters. The tourism and hospitality industries have added thousands of jobs, generating billions of dollars in direct spending by visitors. Chicago’s real estate market has been one of the slowest to recover since the housing bubble burst at the start of the Great Recession.

Home prices were 19% below their pre-crash levels in 2017, and they aren’t expected to hit peak values until 2021. Chicago is the 3rd largest metro, very densely populated with an abundance of small multifamily properties. It is also one of the most affordable metros to live in the entire nation. It has an incredibly deep pool of potential renters at all levels of the market.

It's is the only metro in the country where typical renters spend less than 20% of their annual income on housing. Many factors guarantee that they’re not going to turn into new home buyers any time soon. Many people prefer to rent in Chicago for career and financial flexibility, to save a down payment, and to avoid repair bills, real estate taxes, and real estate market risk.

It is a prime destination for investors who would like to buy Chicago investment properties where the ROI is going to be high and likely to improve over time. In the city of Chicago, there are approx. 77 neighborhoods where you can buy investment properties. There are about 15-20 which are potentially overvalued right now, depending on who you ask and the product type.

Intrinsic values for the rest of the neighborhoods may not even be close to reaching their full potential. Taxes are reasonable (excluding Downtown Chicago neighborhoods), rents are very high and there's a high demand for Chicago rental properties.

Mortgage interest and property taxes remain tax-deductible for many Chicago home buyers. Rent, however, is generally not tax-deductible. In addition to annual tax deductions, homeowners can often make money on the sale of their homes and take profits tax-free within certain limits. The price to rent ratio is also reasonable in Chicago.

Plus, home investors can buy on a huge margin, in some cases with just 3% to 5% down. That’s a good deal that can't found in other big markets like NYC and San Franciso. We chose to ignore the short-term impact of the ongoing pandemic on the Chicago real estate market. People need places to live. Those who wanted to downsize or move into a larger property will need to move forward with their plans once life returns to normal.

This is why we think it makes sense to assess the Chicago real estate investment using pre-pandemic numbers, which should be back in effect by the end of the year. Investors can make good money in this city by building a portfolio of Chicago investment properties and renting them out to a massive population of renters.

Best Places To Buy Chicago Investment Properties

Chicago Investment Properties

With its low cost of living, relatively large housing inventory levels, and high affordability, Chicago has a large no. of renters. Therefore, buying investment properties in Chicago, and renting them out is an excellent choice for real estate investors. Here are the top neighborhoods in Chicago where you can buy investment properties.

1. Chicago's Rogers Park Neighborhood

You can find Chicago investment properties in Rogers Park. Rogers Park is an older neighborhood in Chicago which is dominated by pre-WW2 single-family homes and small multi-family apartment buildings. It is an affordable, walkable neighborhood. For example, the average home here costs around 220,000 dollars.

That makes it a relative bargain for those who want to invest in Chicago investment properties. While it is located 10 miles from downtown, the commute to Chicago's central business district is quick with many options. Public transportation is extensive with access to several bus and rail lines.

Rogers Park is also one of the most affordable areas in the city; that’s unusual given how close it is to the shore of Lake Michigan. Furthermore, they can gain access to many modern amenities in downtown Evanston. This is why Rogers Park's home values are increasing. The rental market is bolstered by the presence of Loyola University.

You’ll get high rental rates for Chicago investment properties near the ten beaches in the area, especially in the summer. With its extensive lakefront green space and unique street-end beaches, Rogers Park is a great place to live as well as invest in real estate.

2. Chicago's Logan Square Neighborhood

You can buy Chicago investment properties in Logan Square. Logan Square is a century-old neighborhood in downtown Chicago. It retains its tree-lined streets and classic Greystone buildings in addition to the massive Palmer Square green space. If you are looking for a good neighborhood to buy Chicago investment properties, know that the bungalows here are considered highly desirable by Millennials.

The area is gentrifying, though that’s true of the entire Northwest Side. This area has already seen decent appreciation, but it is notable for the very high rents. The average rental rate in this area is roughly two thousand dollars a month. Logan Square has been a hot neighborhood for real estate investment in Chicago for a long time.

Zillow ranked it one of the hottest real estate markets in Chicago in early 2020. The typical home now costs 500,075 dollars, up 6.5% over the past year. Studios cost 1300 to 1700 dollars a month, while two-bedroom apartments rent for 1600 to 2400 dollars. Three-bedroom apartments and homes can cost 2500 dollars a month to rent.

There are also opportunities for bargains for property buyers. For example, the higher property prices mean the average home in Logan Square sits on the market for around 100 days, and many buyers may accept a lower price tag to free them up to move or get them out from under their mortgage.

3. Chicago's Pilsen Neighborhood

You can buy Chicago investment properties in the Pilsen neighborhood. Pilsen is a great area for those who want a diverse portfolio of investment properties without having to run all over the city. Pilsen is located on Chicago’s Lower West Side. It features a mix of condos, apartment buildings, and single-family homes.

The area is suburban enough to attract families. Its schools are a C+, which is close to the Chicago average. Parks and other amenities explain why Niche.com gave the area a B- for families. For those who want to buy Chicago investment properties, the presence of the University of Illinois at Chicago is a point in its favor.

You can rent to students if you can’t find professional couples to rent a condo or apartment. Yet Pilsen seems to attract young adults who graduate from the university and move into local apartments. Others move here to work in the UIC Medical District. Another point in favor of the area is the L Pink Line’s three stops in the area, giving residents easy access to the rest of the city.

Pilsen properties can be among the most profitable Chicago real estate investments. The median rent is around 1600 dollars a month. The average property costs 300,000 dollars, a little less than the city average. You can find properties in need of rehabilitation for less than this.

Refurbish it to cater to students in search of Chicago rental properties or meet the expectations of picky Millennials, and you’ll see a significant return on the investment. If you convert a large classic home into several units, you could charge 900 to 1200 a month for a one-bedroom apartment or 1200 to 1300 dollars a month per studio apartment.

4. Chicago's Avondale Neighborhood

You can buy investment properties in Chicago's Avondale neighborhood. Avondale has started to gentrify as people get priced out of Logan Square, Wicker Park, and Bucktown. This is one of the more expensive middle-class areas to buy Chicago investment properties. The average home here costs around 400,000 dollars. However, many reports are suggesting the area will go even higher.

For example, the area is well serviced by the Blue Line ‘L' (24-hour rapid transit train service) and buses. And that’s aside from the easy access to I-90. If you don’t want to speculate in real estate, know that this family-friendly area still commands high rents, so you’ll see significant income from your investment property.

Avondale received a B from Niche.com for its family-friendliness, though the school district was rated a C. You can easily expect to see a significant appreciation of your investment property in this neighborhood. The area is in such demand that the price per square foot for Avondale homes is around 280 dollars a square foot, 40 dollars more than the average for Chicago investment properties.

This area does offer an excellent rental income. The average rent for a studio apartment is 1300 dollars a month. A two-bedroom apartment costs 1400 to 1900 dollars a month. A three-bedroom apartment or house costs up to 2000 dollars a month.

5. Chicago's Humboldt Park Neighborhood

Humboldt Park is another good neighborhood to buy investment properties in Chicago. The home prices in Humboldt Park peaked in 2006 but fell dramatically during the Great Recession. Home prices here hit a record low in 2012. Humboldt’s housing prices are on the rise again, though they remain below their 2006 peak.

The typical home value is around 379,417 dollars (ZHVI), while rents are around 1700 dollars a month. The area is notable for the number of foreclosed and distressed properties available to investors, and this helps pull the average rental rate down. This is why neighborhood rents could rise a little higher before they hit the Chicago average of 1700 to 1800 dollars a month.

Another option is breaking up a large home into several smaller units. You’d receive 1700 to 1800 dollars for a one decent bedroom apartment. A two-bedroom apartment could rent for up to 2000 dollars a month. Humboldt offers a variety of housing types for those who want to buy Chicago investment properties.

You can find single-family homes and fairly large apartment buildings. Housing is expensive enough to preclude many residents from buying. The schools rate a C+, though the area’s crime is average for the city. The area received a grade of B- from Niche.com for family friendliness. Buses connect the neighborhood to the rest of the city. The area is notable for being biker friendly.

6. Chicago's West Town Neighborhood

You can buy investment properties in Chicago's West Town neighborhood. West Town has several points in its favor for Chicago real estate investment. It has low crime by Chicago standards. It is a walkable community. It offers great amenities. West Town has a suburban feel. The schools are average for Chicago, but crime and safety are slightly better than average. Yet homes are so expensive that many would-be buyers are forced to rent.

The only downside for those considering investing in Chicago properties is the price tag. The average home here costs around half a million dollars. This may be offset by the 2400 dollar a month median rental rate. You may be able to get a discount on these potential Chicago investment properties. For example, the average home sits on the market for four or more months.

Chicago Turnkey Investment Properties For Sale

Are you looking for a turnkey investment property in Chicago? 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 Chicago and 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 Chicago. Consult with one of the investment counselors who can help build you a custom portfolio of Chicago turnkey investment properties in some of the best neighborhoods.

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 Chicago 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.

References:

  • About the Chicago real estate market
    https://www.redfin.com/city/29470/IL/Chicago/housing-market
    https://chicago.curbed.com/2020/3/9/21171723/chicago-real-estate-coronavirus-home-buying
    https://www.mashvisor.com/blog/chicago-real-estate-market-2019-neighborhoods https://www.biggerpockets.com/forums/311/topics/531073-is-investing-in-chicago-brilliant-or-ridiculousgo https://www.bestchicagoproperties.com/blog/five-reasons-to-buy-rather-than-rent-in-chicago/
  • Best Chicago Neighborhoods
    https://en.wikipedia.org/wiki/Logan_Square,_Chicago
    https://www.zillow.com/logan-square-chicago-il/home-values/
    https://www.niche.com/places-to-live/n/lower-west-side-chicago-il/
    https://www.domu.com/chicago/neighborhoods/pilsen
    https://www.zillow.com/avondale-chicago-il/home-values/
    https://www.domu.com/chicago/neighborhoods/avondale
    https://www.niche.com/places-to-live/n/humboldt-park-chicago-il/
    https://www.zillow.com/humboldt-park-chicago-il/home-values/
    https://www.domu.com/chicago/neighborhoods/humboldt-park
    https://www.zillow.com/west-town-chicago-il/home-values/
    https://www.niche.com/places-to-live/n/west-town-chicago-il/
    https://www.rentcafe.com/blog/cities/rogers-park-chicago-neighborhood-guide/
    https://chicago.curbed.com/2019/6/4/18646462/chicago-best-neighborhood-homes-buy-rent
    https://homevestorsfranchise.com/the-best-chicago-neighborhoods-for-real-estate-investing-slp/

Where Are Housing Prices Falling 2022?

by

Fortune reached out Moody's Analytics to get access to its latest proprietary housing analysis. The financial intelligence business predicted home price changes in 414 markets between 2022 and 2024. Moody's Analytics expects that 210 of the nation's 414 major housing markets will see home prices falling in the next two years and 204 will see home prices rise. 183 of the 413 biggest U.S. home markets are “overvalued” by more than 25%. Boise, Idaho, is 71.7% overvalued, and Flagstaff, Arizona, is 60.6%.

Redfin revealed its “risk score” on Friday, which identifies the home markets that are most vulnerable to a “housing slump.” The greater a market's “risk score,” the more likely it is that house prices will fall year over year.  Redfin examined 98 regional housing markets and evaluated indicators such as home-price volatility, average debt-to-income ratio, and home-price growth. Among the 98 markets measured by Redfin, Riverside had the highest likelihood of seeing a “housing downturn.”

It was followed by Boise, Cape Coral, North Port, Las Vegas, Sacramento, Bakersfield, Phoenix, Tampa, and Tucson. Popular migration destinations where home prices soared during the pandemic, such as Boise, Phoenix, and Tampa, are most likely to see the effects of a housing downturn amplified and year-over-year home prices decline if the economy enters a recession, a scenario that some economists believe is likely as inflation persists and stock markets stumble.

<<<Also Read: Will the Housing Market Crash? >>>

Homeowners in those markets who are considering selling should market their properties as soon as possible to avoid price drops. Rust Belt cities like Cleveland and Buffalo, which are still inexpensive, are the most resilient to a housing market crash. The U.S. housing market slowed significantly in the spring due to rising mortgage rates. Redfin studied which metros are most vulnerable to home-price reductions if the country enters a recession and which are most immune to an economic slump.

Recession-proof northern metros, including Cleveland and Buffalo, NY, are relatively inexpensive. Prospective homebuyers in these places can proceed with confidence. Redfin's examination of 98 U.S. metros with relevant data utilizes home-price volatility, average debt-to-income ratio, and home-price growth. Each metro is given an overall risk score relative to the others. 100 indicates the highest possibility of a housing market slump, including home-price decreases, while 0 indicates the lowest.

“Recession fears are escalating, mostly because the Fed has signaled it will continue to raise interest rates to tame inflation and cool consumer demand. Higher interest rates led to surging mortgage rates, which have already cooled down the housing market,” said Redfin Senior Economist Sheharyar Bokhari. “If the U.S. does enter a recession, we’re unlikely to see a housing-market crash like in the Great Recession because the factors affecting the economy are different: Most homeowners have a fair amount of home equity and not much debt and unemployment is low.”

Housing Markets at Risk of Falling Home Prices

If the U.S. enters a recession, Riverside's home market will chill the most. It has the highest danger score of any major U.S. city, 84. It's more likely than other metros to see prices drop year over year during a recession or economic slowdown, according to housing and economic statistics. Riverside, which includes San Bernardino, Ontario, and Palm Springs, has variable house values and was a favorite location during the epidemic for both permanent movers and second-home buyers.

Riverside is followed by Boise (76.9), Cape Coral, FL (76.7), North Port, FL (75), and Las Vegas (74.2).

Sacramento, CA (73.1), Bakersfield, CA (72.2), Phoenix (72), Tampa, FL (70.7), and Tucson, AZ (70.1) round out the top 10.

Many of these housing markets, like Riverside, are popular migration destinations or have quickly growing property prices, both of which increase their likelihood of a housing slump. Boise, Cape Coral, North Port, Las Vegas, Sacramento, and Phoenix were among the 20 fastest-cooling areas in May when mortgage rates reached 5.5%. As the economy continues to decline, prices may fall in many of these metros. Six of the 10 areas most at risk of downturns are among the most popular destinations for Redfin.com users moving from one metro to another.

Maricopa County (Phoenix) and Riverside County gained more residents from other parts of the U.S. than anywhere else in 2021, according to the U.S. Census. The most vulnerable metros have likewise seen an outsized price rise. North Port has the nation's fastest-growing house values, up 30.5 percent year over year in May, followed by Tampa (28.1 percent) and Las Vegas (26.8 percent ). Overall, nine of the ten most vulnerable locations had faster-growing house values than the national median (the exception is Sacramento, however, home prices there rose more than 40% throughout the pandemic, reaching $610,000 in May 2022).

Several of those metros went from inexpensive to unaffordable during the epidemic, owing in part to the migration of individuals from other locations. Among them is Boise, where the typical home price increased from $330,000 to $550,000 between May 2020 and May 2022, and Phoenix, where it increased from $300,000 to $485,000.

“Boise’s market is already turning around, as a lot of the people who moved to Idaho during the pandemic are either moving back to their hometowns or cashing in and moving to more affordable places. The housing market was hot during the pandemic, largely because of out-of-town buyers,” said Boise Redfin agent Shauna Pendleton.

Three at-risk metros are in California and three in Florida. San Jose, Oakland, and San Francisco experienced relatively moderate price increases throughout the epidemic, its people tend to have high salaries and considerable home equity, and their housing markets started falling fast in the first half of 2022, mainly owing to collapsing tech stocks. Not all homes in these metros will lose value. Large single-family houses in spread-out areas are recession-proof.

Housing Markets in Which Prices Are Unlikely to Fall

Relatively affordable Rust Belt metros are most resilient in the face of a recession. In case of a recession, Akron, Ohio has the lowest risk of experiencing a housing decline. It has the lowest total risk score of any major US city at 29.6. Low home-price volatility, a low debt-to-income ratio, a small number of second houses, and the fact that properties in Akron are unlikely to be flipped are some of the characteristics that make the city relatively stable.

With an overall risk score of 30.4, Akron is followed by Philadelphia, Montgomery County, PA (31.4), El Paso, TX (32.2), and Cleveland (32.4). The top ten include Cincinnati (32.6), Boston (32.6), Buffalo, NY (33.1), Kansas City, MO (33.4), and Rochester, NY (34.4). Almost all of those metros are inexpensive and have relatively slow-increasing prices, both of which would benefit their housing markets in the event of a recession.

Almost all of the most resilient metros are located in the northern United States, either in the Rust Belt or on the East Coast. Three of them are in Ohio, two in New York, and two in Pennsylvania. In nine of the ten most resilient metros, prices climbed at a slower rate than the national average (El Paso is the exception).

Seven of the 10 metros least in danger of a housing downturn had a median sale price below $300,000 in May, and nine of them were below the $431,000 national median. Affordability benefits property markets in a recession because more people can buy houses, and such locations may attract out-of-town buyers. Boston is pricey, although property prices climbed modestly throughout the epidemic. It's busy and lost residents as remote work became prevalent.

U.S. Metros Most and Least Susceptible to a Housing Downturn in the Next Recession

Ranked by highest to the lowest chance of a housing downturn. The ranking combines 10 indicators to come up with an overall risk score for each metro, relative to the other metros in this analysis. The highest possible score is 100 and the lowest possible score is 0. The indicators are as follows: home price volatility, average debt-to-income ratio, average home-loan-to-value ratio, labor market shock, percent of homes flipped, how much the housing market is “cooling” compared with other metros, the year-over-year change in domestic migration, the share of homes in the metro that are second homes, year-over-year price growth and elasticity of supply. Each factor is weighted equally.

U.S. Metro Area

 Overall Score Average Home-Loan-to-Value Ratio, 2021 Percent of Homes Flipped in 2021 Rank: How Quickly Housing Market Cooled in First Half of 2022 Net Domestic Migration in 2021, YoY Share of Second Homes, 2021 Price Growth in 2021, YoY
Riverside, CA 84 83% 4.50% 15 19,204 7.70% 21.00%
Boise, ID 76.9 6 6,782 6.00% 30.90%
Cape Coral, FL 76.7 81% 2.90% 11 7,345 23.40% 23.60%
North Port, FL 75 79% 4.40% 18 8,283 20.20% 23.30%
Las Vegas, NV 74.2 84% 8.30% 12 -15,143 7.60% 18.60%
Sacramento, CA 73.1 81% 5.40% 2 4,157 4.30% 19.30%
Bakersfield, CA 72.2 87% 3.80% 21 6,111 2.50% 17.30%
Phoenix, AZ 72 82% 10.30% 17 -15,530 7.20% 25.40%
Tampa, FL 70.7 85% 7.40% 22 524 8.10% 19.60%
Tucson, AZ 70.1 84% 7.70% 54 -2,677 7.10% 21.50%
San Diego, CA 69.8 81% 5.30% 8 -8,189 3.70% 17.50%
Jacksonville, FL 69.3 85% 7.20% 36 4,136 6.20% 16.60%
Stockton, CA 68.2 84% 4.70% 5 3,578 1.00% 19.30%
Knoxville, TN 67 86% 4.60% 13 4,527 5.20% 18.30%
Orlando, FL 63.8 85% 6.40% 31 -6,536 8.70% 16.70%
Charleston, SC 63.4 85% 3.80% 67 -2,921 7.60% 15.40%
West Palm Beach, FL 63.3 80% 3.10% 30 972 12.00% 17.40%
Fresno, CA 60.6 85% 4.70% 37 2,719 2.90% 17.90%
Raleigh, NC 60.4 83% 8.90% 42 3,430 2.60% 17.50%
Oxnard, CA 59.8 79% 2.50% 28 323 3.30% 16.70%
Salt Lake City, UT 57.7 -3,020 2.00% 22.80%
Columbia, SC 56.9 90% 4.40% 2,296 3.20%
Providence, RI 56.6 85% 2.70% 44 3,664 3.90% 15.40%
Atlanta, GA 56.4 86% 9.90% 47 -4,229 2.20% 19.20%
Miami, FL 56.3 82% 2.90% 53 -5,120 5.90% 18.60%
Charlotte, NC 56.1 85% 10.10% -6,444 2.70% 16.50%
Virginia Beach, VA 55.8 92% 3.20% 80 864 3.40% 8.30%
Tacoma, WA 55.5 9 -3,571 1.70% 19.80%
Detroit, MI 54.8 87% 5.20% 70 -2,062 1.00% 15.40%
Los Angeles, CA 54.8 79% 4.10% 46 -69,329 1.90% 17.30%
Austin, TX 54.6 16 -8,609 3.90% 31.60%
Portland, OR 54.3 82% 3.70% 14 -17,716 2.30% 15.40%
Anaheim, CA 53.9 76% 4.50% 20 -6,644 3.80% 16.00%
Denver, CO 53.8 82% 6.90% 7 -18,063 2.40% 16.70%
Colorado Springs, CO 53.7 87% 5.00% 693 2.50%
Baton Rouge, LA 52.4 89% 3.00% 2,287 2.40% 9.80%
Greenville, SC 52.1 85% 3.50% 32 1,771 4.70% 14.00%
Winston-Salem, NC 51.9 87% 5.10% 2.70% 13.70%
Grand Rapids, MI 51.7 86% 3.60% 29 1,028 2.40% 15.20%
Greensboro, NC 51.7 87% 6.70% 38 -181 2.10% 11.80%
Warren, MI 50.5 86% 2.90% 35 6,180 1.60% 11.40%
Tulsa, OK 50.1 88% 3.40% 45 2,325 2.10% 12.50%
Fort Lauderdale, FL 49.9 82% 3.00% 72 -5,121 7.50% 13.30%
Fort Worth, TX 49.6 50 1,978 1.70% 18.30%
Nashville, TN 49.3 84% 8.30% 48 -6,093 3.40% 17.00%
Allentown, PA 48.6 87% 2.20% 62 3,722 3.40% 14.20%
Camden, NJ 47.9 88% 3.00% 75 4,300 0.50% 17.90%
Houston, TX 47.7 24 -334 2.90% 15.50%
Seattle, WA 47.6 79% 1.90% 4 -37,365 1.80% 17.20%
Nassau County, NY 47.4 80% 3.60% 58 12,296 4.70% 15.20%
Albuquerque, NM 46.8 -1,714 2.80%
New Orleans, LA 46.6 88% 2.90% 23 -3,930 3.40% 10.70%
San Antonio, TX 46.6 40 -138 2.90% 15.10%
San Jose, CA 46.4 74% 2.50% 1 -22,661 0.80% 13.60%
San Francisco, CA 46.3 72% 1.90% 10 -55,918 2.40% 4.80%
Oakland, CA 45.8 78% 2.60% 3 -23,280 1.00% 16.30%
Dallas, TX 45.4 40 -5,685 1.70% 17.90%
Richmond, VA 45.4 87% 3.70% 59 1,995 1.40% 12.30%
Oklahoma City, OK 45.3 88% 5.10% 52 476 1.70% 10.60%
Washington, D.C. 44.2 87% 2.50% 28 -35,800 1.50% 10.10%
New Haven, CT 44.1 87% 2.00% 82 4,492 1.90% 15.80%
Birmingham, AL 43.4 88% 5.90% 68 95 1.40% 8.40%
Little Rock, AR 43.1 89% 4.90% 43 472 1.80% 10.70%
Frederick, MD 42.9 84% 2.00% 25 -58 0.90% 11.70%
Memphis, TN 42.7 87% 7.50% 33 -535 1.20% 13.30%
Honolulu, HI 42.6 79% 0.50% 19 6.20% 7.80%
St. Louis, MO 42.2 86% 3.40% -2,214 1.30% 10.10%
Baltimore, MD 41.9 86% 2.60% 74 6,085 1.40% 8.50%
Bridgeport, CT 41.7 81% 1.10% 88 8,871 2.00% 11.60%
Worcester, MA 40.8 86% 1.80% 57 3,354 1.20% 16.10%
Indianapolis, IN 39.9 41 902 1.40% 13.50%
Newark, NJ 39.3 84% 1.90% 73 7,348 2.80% 13.20%
Wichita, KS 39.3 -1,813 1.10% 12.50%
Lake County, IL 38.6 85% 1.80% 87 2,746 1.70% 14.40%
Louisville, KY 38.6 87% 4.80% 34 -378 1.20% 9.70%
Wilmington, DE 37.8 88% 2.80% 64 738 1.80% 11.30%
Hartford, CT 36.8 86% 1.70% 80 7,182 1.80% 12.00%
Minneapolis, MN 36.8 85% 3.70% 50 -10,673 1.30% 11.10%
Gary, IN 36.7 939 1.20% 9.70%
Pittsburgh, PA 36.4 87% 1.60% 76 -337 1.50% 12.70%
Elgin, IL 35.8 84% 1.10% 60 3,590 0.60% 11.50%
New York, NY 35.4 78% 1.70% 48 -2,01,570 2.80% 12.30%
Syracuse, NY 35.2 86% 2.20% 1,510 3.30% 11.00%
Milwaukee, WI 35.1 86% 3.30% 79 -2,993 1.40% 7.20%
Omaha, NE 35.1 87% 4.90% 56 -237 1.30% 9.70%
Albany, NY 34.5 87% 2.00% 90 3,521 2.80% 13.70%
Chicago, IL 34.4 86% 1.80% 70 -32,998 1.30% 11.70%
Columbus, OH 34.2 85% 3.40% 61 2,507 1.40% 13.50%
Rochester, NY 34 85% 2.00% 86 1,330 3.20% 12.60%
Kansas City, MO 33.4 -1,491 1.30% 10.90%
Buffalo, NY 33.1 86% 2.60% 78 1,877 1.40% 17.00%
Boston, MA 32.6 79% 1.20% 63 -23,964 2.80% 12.20%
Cincinnati, OH 32.6 87% 3.90% 84 -360 1.30% 13.90%
Cleveland, OH 32.4 86% 2.50% 71 225 1.20% 9.50%
El Paso, TX 32.2 89 -24 1.80% 13.90%
Montgomery County, PA 31.4 83% 1.80% 66 6,685 0.80% 11.00%
Philadelphia, PA 30.4 86% 2.00% 64 -15,721 1.40% 10.10%
Akron, OH 29.6 87% 2.70% 83 2,029 1.20% 7.90%

 

Source: https://www.redfin.com/news/metros-recession-risk-housing-downturn-2022/

Will Housing Affordability Make Real Estate Market Hot in 2023?

by

While high mortgage rates have had a cooling effect on the spring real estate market in the United States, there are still specific markets that continue to thrive. The driving force behind their success lies in the pursuit of affordable housing by homebuyers. In this blog post, we will explore the critical factor known as the “affordability advantage” and its role in making certain markets hotter than ever. We will examine the key elements contributing to the success of these markets, showcase examples of top-performing cities, and discuss the future outlook for home prices in these areas.

What Makes Today's Real Estate Market Hot: A Study for April 2023

In this analysis, Realtor.com® uncovers the key elements that contribute to the market's heat, driving high demand and quick sales. From affordability and location advantages to inventory scarcity and intense buyer competition, these dynamics shape the landscape of the real estate market, making it one of the hottest sectors to watch.

1. Analyzing Demand and Pace: Identifying the Hottest Markets

To determine the hottest markets, the Realtor.com® Hottest Markets List assesses two important variables: demand, measured by the number of views per listing, and pace, measured by the time listings spend on the market before being sold. Despite the sluggish national housing market, there are markets that continue to experience high demand and rapid sales. In April, Concord, NH claimed the top spot for the second time, with homes receiving 3.8 times more views than the national average and an average time on the market of just 17 days.

2. The Advantage of Affordability in the Northeast

One of the primary reasons for the success of many top markets on the Hottest Markets List is the “affordability advantage.” While the median home prices in Concord and Manchester, NH, surpass the national median, they are still considerably more affordable compared to neighboring Boston, which tops the list as the most expensive city. The proximity to high-cost cities, along with tax-friendly environments, makes these markets highly desirable.

3. Concentration of Thriving Northeastern Markets

The top five hottest markets in April, including Hartford, CT; Rochester, NY; and Springfield, MA, are all located in the Northeastern region. According to economist Hannah Jones, out of the 12 Northeast markets on the list, nine are clustered around the Boston area. This region showcases strong employment data and has outperformed the national employment growth rate. The combination of high housing demand and limited inventory continues to drive prices upward, compelling buyers to seek affordability in surrounding areas.

4. The Ascendancy of Midwest Real Estate

While the West and South regions failed to secure positions in the top 20 hottest markets, the Midwest has emerged as a promising area. Eight Midwestern cities made the list, attracting buyers with lower home prices that help counterbalance the impact of high mortgage rates. These Midwest markets received above-average views and experienced shorter durations on the market. Buyers are particularly drawn to the region's lower taxes and appealing home prices, resulting in a migration from neighboring areas.

5. Striking a Balance: Affordability and Inventory Challenges

Despite the affordability advantage in these hot markets, the demand from homebuyers is surpassing the available inventory. Although the national inventory has increased compared to the previous year, many of the hottest markets are facing slower inventory growth or even declines. Low inventory levels fuel intense competition among buyers, leading to bidding wars and subsequent increases in home prices. Even in markets with initially low prices, there have been significant year-over-year price increases.

Summary

The current real estate landscape underscores the significance of the affordability advantage in driving the hottest markets. Homebuyers are increasingly drawn to markets with lower home prices compared to neighboring expensive cities. The Northeast and Midwest regions have emerged as strong contenders, but finding the right balance between affordability and inventory remains a challenge. As prices continue to rise and inventory remains limited, buyers must act swiftly to secure favorable deals in these thriving markets.

Today's Hottest Real Estate Markets
Source: Realtor.com

Source:

  • https://www.realtor.com/news/trends/what-makes-a-real-estate-market-hot-right-now-it-all-boils-down-to-the-affordability-advantage/

How to Calculate Net Operating Income

by

You can calculate net operating income (NOI) for your real estate investment by using the generally accepted net operating income formula, which is your potential rental income plus any additional property-related income minus vacancy losses minus total operating expenses.

Keep in mind the net operating income formula can vary depending on who calculates it.

For example, most investors separate potential rental income and other income, but sometimes you will see them combined. Regardless, the generally accepted net operating income formula is your potential rental income plus any additional property-related income minus vacancy losses minus total operating expenses.

[Read more…]

A Study on Most and Least House-Poor Cities in the U.S.

by

If you’re spending more than 30% of your gross monthly income on living expenses, you might be what’s known as “house poor.” A recent survey by HomeTap found that nearly 20% of U.S. homeowners feel like their monthly housing costs impede their ability to achieve other financial goals most of the time, and an overwhelming 73% feel it some of the time.

[Read more…]

Best Ways To Consolidate Your Debts In The Crisis of Coronavirus 2020

by

Debt consolidation means getting a new loan to pay off all your debts through a single payment plan. With the help of debt consolidation, you can also pay off multiple unsecured loans from credit cards, medical bills, personal loans, payday loans, etc. A Debt Consolidation Loan can be an effective way to manage your finances in 2020. You can roll multiple debts into a single payment, ideally with a lower interest rate. It is like refinancing your mortgage – you take a big loan and then pay off all your previous unsecured loans.

How to Consolidate Your Debt

[Read more…]

Impact of Coronavirus Pandemic On The NYC Housing Market

by

The New York City real estate market was already cooling off before the coronavirus pandemic put everyone in lockdown. As per the latest news, sixty people have died from coronavirus in New York City, as statewide cases jumped to over 10,000 on Saturday. Some 8,115 people had tested positive for the virus in the city as of 6 p.m., helping make New York the global epicenter of the pandemic.

Social distancing is being enforced everywhere. Testing and treatment is being ramped-up. The state officials are taking many measures for noncompliance of curbs on social distancing, especially in the parks of New York City, where many people were seen chilling on Friday.

The governor criticized young people for not heeding the warning to avoid unnecessary contact and danger of viral transmission to others. Till Saturday, coronavirus has sickened 2,484 people in Brooklyn, 2,254 people in Queens, 1,868 in Manhattan, 1,071 in the Bronx and 437 in Staten Island, the mayor’s office said. At least 1,450 people were hospitalized, including 370 people in intensive care units.

[Read more…]

Impact of Coronavirus Pandemic On The Real Estate Market

by

Today I’d like to talk a bit about the Short-Term Impact and Long-Term impact of the Coronavirus on the Housing and Rental Markets. Pay attention as I’m going to give you some insight and key takeaways on this episode.

I’ll have more to add in upcoming episodes, so if you haven’t already, now is a great time to click that subscribe button so you don’t miss out on another episode of the Passive Real Estate Investing podcast.

Keep in mind that this is evolving day-by-day, and although I’m not a fan of the main-stream media, it is my opinion that they are doing more harm than good by adding fuel to the fire of concern to those paying attention to them.

[Read more…]

A Strong Demand of Single Family Rental Homes From Investors

by

A single family rental home is a standalone property on its own lot. Investing in a single family rental home is basically investing in a house or a condo with an intention of renting it to a single tenant. It has few pros and cons attached to it but it depends on your expectations from the property.

Usually people tend to buy a property in a low budget or affordable locality and revamp it to attract new tenants. A single family home is a residential home. As a real estate investor if you're looking to increase the number of rental properties you currently own with bigger returns, you should consider investing in single family rental homes.

[Read more…]

Blog Posts

Contact

Norada Real Estate Investments 30251 Golden Lantern, Suite E-261 Laguna Niguel, CA 92677

(949) 218-6668
(800) 611-3060
BBB