Norada Real Estate Investments

Nashville Housing Market: Prices, Trends, Forecast 2023

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Nashville Housing Market

The Nashville housing market has been experiencing significant growth and activity in recent months. The housing market report for June 2023 demonstrates a robust and dynamic real estate market. With many closings, a diverse range of property types, and varying price points, Nashville continues to be an attractive destination for homebuyers.

The affordability of condominiums and the available inventory contribute to the market's appeal, while the number of pending and the low average days on the market indicate a strong demand and a competitive landscape. As we move forward, it will be interesting to observe how these trends evolve and if the Nashville housing market will continue its upward trajectory.

Also Read: Tennessee Real Estate Appreciation & Forecast

Nashville Housing Market Trends

The Greater Nashville REALTORS® has released the housing market data for the Nashville Metropolitan Area for the month of July 2023. This report provides valuable insights into the performance of the local real estate market, including key metrics such as closings, median prices, inventory, and more. Let's take a closer look at the numbers:

Closings

In July 2023, there were a total of 3,001 closings in the Nashville Metropolitan Area. These closings encompass various property types, including residential, condominiums, multi-family units, and farm/land/lots. Here's a breakdown of the closings by property type:

  • Residential: 2,366 closings
  • Condominium: 484 closings
  • Multi-Family: 20 closings
  • Farm/Land/Lots: 131 closings

Median Price

The median price is an essential indicator of the market's price trends. In July 2023, the median price for residential properties in the Nashville Metropolitan Area was $478,945, while condominiums had a median price of $350,110. These figures provide valuable insights into the price ranges that buyers and sellers can expect in the current market.

Inventory

Inventory levels are crucial in understanding the supply and demand dynamics of the housing market. In July 2023, the total inventory in the Nashville Metropolitan Area stood at 9,892 units. Here's a breakdown of the inventory by property type:

  • Residential: 6,838 units
  • Condominium: 1,134 units
  • Multi-Family: 80 units
  • Farm/Land/Lots: Data not provided

These inventory figures offer valuable insights into the housing options available to buyers in the Nashville area.

Pendings and Days on Market

Pendings represent properties that are currently under contract but have not yet closed. In July 2023, there were 2,693 pending sales in the Nashville Metropolitan Area. This indicates a strong level of buyer interest in the market.

The “Days on Market” metric reflects the average number of days it takes for properties to sell. In July 2023, the average days on market stood at 41, suggesting that properties are selling relatively quickly in the area.

Overall, the July 2023 housing market report for the Nashville Metropolitan Area indicates a dynamic real estate market with a healthy level of activity, competitive median prices, and a notable number of pending sales. These insights can be valuable for both buyers and sellers looking to navigate the Nashville housing market.

Nashville Housing Market Forecast 2023-2024

What are the Nashville real estate market predictions for 2023 and 2024? Property values across Nashville and Davidson County are expected to rise over the next twelve months. We have seen people move from big towns to suburbs throughout the country. Nashville too has seen an influx of buyers coming from larger markets like Seattle, New York, and California. Another factor in the increase in out-of-state homebuyers is that Tennessee is one of only seven states that does not impose an income tax and one of two that doesn’t collect tax on earned income.

This has multiplied the demand for housing. High demand and low inventory are causing home prices in Nashville to rise rapidly. As we delve into the Nashville housing market forecast, it's essential to consider the latest data and projections provided by Zillow. The Nashville-Davidson–Murfreesboro–Franklin area has been experiencing a dynamic real estate landscape, and understanding the key takeaways and forecasts can help buyers, sellers, and investors make informed decisions.

Current Market Snapshot

As of July 31, 2023, Zillow reports that the average home value in the Nashville-Davidson–Murfreesboro–Franklin area is $434,130. This represents a slight decrease of 2.2% over the past year. Additionally, homes in this area are going pending in approximately 12 days, indicating a fast-paced market.

Market Forecast

Looking ahead, Zillow provides a 1-year market forecast for July 31, 2023, which suggests a growth rate of 6.7%. This forecast indicates a positive outlook for the Nashville housing market in the coming year, with the potential for home values to appreciate.

Market Metrics

Several key market metrics provide further insights into the current dynamics of the Nashville housing market:

  • Median Sale to List Ratio (June 30, 2023): The median sale to list ratio is reported as 0.995, indicating that homes are, on average, selling very close to their list prices.
  • Percent of Sales Over List Price (June 30, 2023): Approximately 24.0% of sales are going over the list price, suggesting competitive bidding and strong buyer demand.
  • Percent of Sales Under List Price (June 30, 2023): Around 52.3% of sales are occurring under the list price, providing opportunities for buyers to find properties below the asking price.
  • Median Days to Pending (July 31, 2023): The median time it takes for a property to go pending is 12 days, emphasizing the quick pace of the market.

Addressing Common Questions

Now, let's address some common questions that individuals often have when considering the Nashville housing market:

Are Housing Prices Dropping in Nashville?

While Zillow's data indicates a 2.2% decrease in average home value over the past year, it's important to note that the market forecast for the coming year suggests a 6.7% growth rate. This indicates that any recent decline may be part of a natural market fluctuation, and the overall outlook is positive for home values in Nashville.

Is Now a Good Time to Buy a House in Nashville?

The decision to buy a house depends on various factors, including your personal financial situation, goals, and long-term plans. With a 1-year market forecast showing potential appreciation and a median sale to list ratio close to 1, Nashville could be a favorable market for buyers. However, it's essential to consult with a local real estate expert who can provide tailored advice based on your specific circumstances.

In conclusion, the Nashville housing market is dynamic, with a positive market forecast and various opportunities for both buyers and sellers. Staying informed and seeking guidance from real estate professionals will be crucial for making informed decisions in this competitive market.

Nashville Housing Market Forecast 2023-2024
Source: Zillow

Here are the ten neighborhoods in Nashville having the highest real estate appreciation rates since 2000—List by Neigborhoodscout.com.

  1. Maxwell Heights
  2. Rolling Acres / Lockeland Springs
  3. East Nashville
  4. Greenwood / Lincoln College of Technology Nashville
  5. Shelby Hills
  6. East Hill
  7. North Nashville
  8. Germantown
  9. Edgehill / Historic Waverly
  10. Fisk Meharry / Fisk University

Nashville Real Estate Investment Outlook

Nashville Real Estate Investment

Is Nashville a Good Place For Real Estate Investment? Many real estate investors have asked themselves if buying a property in Nashville 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. Nashville is a minimally walkable city in Davidson County with a population of approximately 601,201 people.

Nashville, Tennessee is famous for the Grand Ole Opry, the recreation of the Parthenon, and country music. It is best known as a tourist attraction in middle America. Nashville itself is home to just over six hundred thousand people. That alone makes it the 24th most populous city in the country. If you count semi-independent parts of Davidson County, then the Nashville real estate market is home to about 700,000 people. The Nashville metropolitan area contains more than two million people.

Many of those live in Davidson and Murfreesboro. Nashville has a mixture of owner-occupied and renter-occupied housing units. According to Neighborhoodscout.com, a real estate data provider, one and two-bedroom single-family detached homes are the most common housing units in Nashville. Other types of housing that are prevalent in Nashville include large apartment complexes, duplexes, rowhouses, and homes converted to apartments.

The Nashville housing market has been good for sellers in the past years due to the rising prices, and it is considered one of the hottest housing markets in the U.S. The Nashville real estate boom began about 10 years ago and investors expect these trends to continue in 2021 and the foreseeable future, making Nashville one of the most desirable housing markets in the country.

Several long-term trends make the Nashville market a good place to invest in real estate without any fear of boom and bust like what hit Arizona during the Great Recession. In 2020, Nashville came in at No. 4 in the country for expected activity and price appreciation, in comparison to 25 large markets around the country, according to a survey published by Zillow.

Nashville was the only market analyzed in which no panelists said they expected home values to fall in 2020. The home values (nationally) were expected to grow by 2.8% in 2020. 59% of panelists expected Nashville home values to appreciate faster than their expected national rate of 2.8%. 31% of panelists expected Nashville home prices to appreciate slower than they do nationally while 10% of panelists expected them to grow about the same as they do nationally.

One of the best features of the Nashville real estate market is the median property price in the city, which is considered more affordable than most of the other top markets for investing in real estate in the U.S. As the inventory remains limited, it means that Nashville will remain among the fastest-moving housing markets in the U.S. Also, as the mortgage rates remain at record lows, it makes buying a property more affordable now than it was in previous years.

Let’s take a look at the number of positive things going on in the Nashville real estate market which can help investors who are keen to buy an investment property in this city.

1. A Strong Economy And Job Opportunities

In early 2018, a Quartz article joked that Nashville could give up the nickname Music City and be called Job City. Nashville’s claim to the title was having the lowest unemployment rate of any metropolitan area with more than a million people. Nashville real estate market demand will remain strong as long as people want to move here for work, and unlike some areas, they can find it here. The Nashville area economy includes thriving technology, service, education, health, and manufacturing sectors.

Notable job growth has occurred in the professional and business services, leisure and hospitality, manufacturing, and mining, logging, and construction sectors. Financial enterprises have also discovered the benefits of doing business in Nashville, giving abundant employment prospects to bankers, accountants, and budget analysts. While the tourism industry is thriving, white-collar jobs are expanding rapidly, too.

Almost anyone with a marketable skill can find a good-paying job in Nashville. This trend is expected to continue for at least the next 10 years, with opportunities especially robust for healthcare, IT, and design/media specialists. Average incomes on the city's west side are higher than in areas east of downtown.

2. Strong Demographic Trends In Nashville

The average age of Nashville residents is around 33, much younger than the national average of 40. This means the Nashville real estate market contains a larger than average number of young families, and given the strong job market, these adults and their children will contribute to housing demand for years to come.

3. Quality of Life in Nashville Attracts People of All Ages

Nashville was ranked the fastest-growing large metropolitan area in the United States in 2017. This is in no small part due to its high rankings in various quality-of-life surveys such as U.S. News and World Report. That publication ranked Nashville the 17th best place to live in America in 2020-2021 — giving it high marks on desirability and value.

It was also ranked 12th in its list of best places to retire and 23rd in the fastest-growing places. This means many are choosing to move here because of the quality of life whether or not they’re coming for work. Nashville is also known as the Country Music Capital of the World and it has unique museums and architecture.

Today, Nashville is a hot relocation destination with a thriving economy, continuous population growth, and a diverse, ever-growing services base. Consumers who act aggressively to break into the local real estate market should enjoy both a high quality of life and rising home values for the foreseeable future.

Demographics of the Nashville:

  • College-educated: 40%
  • Homeowners: 65.6%
  • Married: 43%

4. Known Redevelopment Opportunities

Redevelopment can be hit and miss since you can’t be sure a waterfront area or community slated for revitalization goes up in value. One benefit of the Nashville housing market is that there are known areas of redevelopment where returns are nearly certain. The area around the future professional sports stadium comes to mind. East Nashville is gentrifying, as well.

5. A Large Student Population

The Nashville housing market presents a prime opportunity for real estate investors who would like to cater to students. This is partially due to the fact it is the capital of the state, and it is partially because it is simply the largest city in the state. Local universities include but are not limited to Tennessee State University, Lipscomb University, Belmont University, Aquinas College, Fisk University, and Vanderbilt University.

American Baptist College, Trevecca Nazarene University, Meharry College, Welch College, and Nashville State Community College are also located here. If you want to invest in the suburban Nashville housing market, Middle Tennessee State University is located in Murfreesboro. The presence of several colleges and universities, along with both private and public secondary schools, presents rich possibilities to academic professionals.

6. The Tourism-Related Rental Market

The Nashville housing market provides two different tourism-related rental markets. One is, of course, renting homes to tourists who are more likely to be families and retired couples than swinging singles. Another possibility is renting to young adults who work in the tourism industry themselves.

Just over a third of the market rents, a figure similar to the national average. This means that a sudden decline in tourism isn’t going to hurt the Nashville housing market much. The city is currently arguing over limits for AirBnB rentals for non-residents, but no restrictions on this are in place yet or in the foreseeable future.

7. Affordable Nashville Real Estate

The typical home price in Nashville is around $457,360 (Zillow). Nashville is relatively affordable compared to other major U.S. metro areas, though the housing market has become increasingly competitive. You can buy two moderately large single-family homes here for the price of a cheap condo in California, and you can buy half a dozen rental properties in the Nashville real estate market for the price of one good house in New York City. Nor will the area see a building boom that causes real estate to go down dramatically in value, since rentals had a vacancy rate of around 4% in 2016.

Some new housing stock may come onto the market, but not enough to hurt the value of existing homes. The area has seen an increase in its population, as well as a rise in home values. The Southern Suburbs submarket, which includes the cities of Murfreesboro and Franklin, is the fastest-growing submarket in Nashville Metro Area. Since Tennessee is one of the few states that doesn't tax wages, residents can keep more of their income, though there is a 6% hall tax on investment interest and dividends.

The state Legislature agreed in 2016 to start phasing out the Hall income tax, with its total elimination beginning on Jan 1, 2021. This is considered among the most important tax reforms in the history of Tennessee. From a 6 percent tax rate on investment income, the levy was to be reduced by 1 percent each year through 2020. For the year that started Jan. 1, the rate is 2 percent. Hence, Tennessee is on its way to becoming a truly no-income-tax state, to join seven other states — Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming.

8. Stability

We’ve touched on the subject of rental market stability. Nashville has high employment rates and low vacancy rates, but none of those numbers are enough to throw the market into overdrive, whether it leads to a glut of supply to meet high demand or a boom-bust cycle. The Nashville Business Journal ranked Nashville as the most stable housing market in the state in 2018. The city’s relatively slow permitting process slows down the construction of new units, keeping home prices stable and high.

9. It Is Landlord Friendly

Tennessee like much of the south is landlord-friendly. Landlords in the Nashville real estate market don’t have to have a written lease unless the rental agreement is longer than three years, though that’s always recommended. There is a limited payment grace period. Receipts aren’t required for rent and deposit payments, though again, that would be wise. Interest isn’t due on deposits. You can charge late fees but have to specify them in the lease. The only minor issue is that you have to have a rental license before you can be a landlord.

10. The Good Return on the Investment

Interestingly, the average annual salary is about $62,000 (source: Payscale.com), leading many here to rent instead of buy. According to RENTCafe, 46% of the households in Nashville, TN are renter-occupied while 53% are owner-occupied. However, the rental market isn’t so hot that it is guaranteed to collapse anytime soon. Renter household growth has outpaced the construction of rental units and the conversion of single-family homes to rental units since 2010.

That is why average rent hovers around $1,400 a month, providing decent returns to landlords who don’t over-leverage but without worrying about a condo boom to cash in on rental demand diminishing profits over the long term. Also, the fact that rents in the Nashville real estate market are almost $200 per month greater than the Tennessee average is a strong reason to buy real estate here than elsewhere in the state. And know that rental rates for large apartments and condos are even higher – commanding rents in the $1500-2000 range. About 25% of the apartments fall in this price range whereas 47% fall in the range of $1,001-$1,500.

As of September 2023, the average rent for a 1-bedroom apartment in Nashville, TN is currently $1,775. This is a 0% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Nashville decreased by -2% to $1,627. The average rent for a 1-bedroom apartment decreased by -1% to $1,775, and the average rent for a 2-bedroom apartment remained flat.

  • Two-bedroom apartments in Nashville rent for $1,995 a month on average (a 5% increase from last year).
  • Three-bedroom apartment rents average $2,395 (a 4% increase from last year).
  • Four-bedroom apartment rents average $3,130 (a 2% decrease from last year).

The most affordable neighborhoods where the asking prices are below the average Nashville rent of $1,428/mo are:

  • West Meade where the average rent goes for $1,628/mo.
  • Hickory Hills where the average rent goes for $1,650/mo.
  • Bellshire Terrace where the average rent goes for $1,675/mo.

Other famous neighborhoods in Nashville, Tennessee are Green Hills, Inglewood, Urbandale Nations, Nolensville, Joelton, Downtown Nashville, Crieve Hall, Hermitage Estates, Hermitage Hills, Donelson-Hermitage-Old Hickory, Madison, Sylvan Park, Antioch-Priest Lake, Old Hickory Village, West Nashville, Green Hills, East Nashville, and Antioch Park.

The Sunnyside neighborhood is one such neighborhood that has grown massively since its founding. It has over 800 homes with historic or architectural significance alone, which should appeal to many homebuyers. Home prices have dropped by 23.6% since last year for those looking for a deal in this neighborhood. The average sale price per square foot in Sunnyside is $270, down 23.1% since last year. Redfin says that the homes sell for 2.6% under their list price. Average Price: $717K. Buyers who can afford to buy at this price point should make a move as they hold the upper hand in price negotiations.

Downtown Nashville is another dynamic, urban neighborhood that is the hub of the entertainment and nightlife that defines Music City. It has a lot of great apartment options for rent, but you can also consider buying a property that will keep you close to work, public transit, and all the entertainment you can hope for. It is also a buyer's market and much cheaper than Sunnyside. A great market for buyers because it is not very competitive. According to Redfin, the average sale price of a home in Downtown Nashville was $450K last month, down 31.8% since last year. The average sale price per square foot in Downtown Nashville is $566, down 3.7% since last year. Typically homes in this neighborhood receive 1 offer on average and sell in around 76.5 days. A high average DOM signals a weak market that favors buyers.

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.

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 the United States.

Consult with one of the investment counselors who can help build you a custom portfolio of Nashville investment properties. Depending upon the availability, we can help you to find “Cash-Flow Rental Properties” located in some of the neighborhoods in Nashville. Not just limited to Nashville or Tennessee but you can also invest in some of the hottest real estate markets for rental properties in the United States.

Another housing market to go for diversifying your investments is the Austin real estate market. The Austin housing market may be one of the more expensive ones in the state of Texas, but it stands out for its large rental market and high rental rates. It is an excellent place to invest in real estate in the Lone Star State. 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 $350,000, 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.

Similarly, Salt Lake City is another great market for investing in real estate for your retirement. The Salt Lake City real estate market is booming because of an ideal combination of business growth triggering in-migration and strong native population growth. Downtown Salt Lake City properties near the Mormon Temple command a premium, but that isn’t the only upscale market in the area. Park City and the northern side of Oakley, too, have properties that cost on average well over a million dollars. As you move up Highway 80 toward Hoytsville and Wanship, properties routinely cost more than a million dollars despite the hour commute to Salt Lake City.

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 Nashville turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.

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

Remember, caveat emptor still applies when buying a property anywhere. Some of the information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.

References

Housing Market Data, Trends & Statistics
https://www.greaternashvillerealtors.org/pages/market-data-news/
https://www.zillow.com/Nashville-tn/home-values
https://www.deptofnumbers.com/rent/tennessee/nashville
https://www.redfin.com/city/13415/TN/Nashville/housing-market
https://www.realtor.com/realestateandhomes-search/Nashville_TN/overview
https://www.neighborhoodscout.com/tn/nashville/real-estate#description
https://www.msn.com/en-us/money/realestate/nashville-housing-market-trends-and-prices
https://www.tennessean.com/story/money/real-estate/2021/06/04/what-know-nashville-housing-market/5253078001/

Demographics
https://suburbanstats.org/population/tennessee/how-many-people-live-in-nashville
https://en.wikipedia.org/wiki/Nashville,_Tennessee

Landlord friendly
https://www.avail.co/education/laws/tennessee-landlord-tenant-laws

Quality of life
https://www.nashvillechamber.com
https://realestate.usnews.com/places/tennessee/nashville

Stability
https://thinkrealty.com/nashville-housing-market-room-grow
https://www.bizjournals.com/nashville/news/2018/05/23/report-card-tennessee-best-places-to-buy-a-house.html

Stadium / redevelopment
https://www.tennessean.com/story/sports/2018/09/05/nashville-mls-stadium-pro-soccer-team/1200230002/
https://www.theringer.com/features/2017/11/21/16678002/airbnb-nashville

Employment
https://qz.com/1251382/nashville-tennessee-has-the-uss-lowest-unemployment

Real Estate Loans for Investors: Types and Requirements

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Real Estate Loans for Investors

Real estate investment is a lucrative venture, but it requires substantial financial resources. Fortunately, real estate loans for investors offer a viable solution to finance these investments. In this article, we will explore the most common types of real estate loans for investors, their eligibility requirements, how to obtain them, and the factors to consider before selecting a loan. We will also provide insights into how investors can increase their chances of getting approved for a loan that best fits their needs.

Conventional Loans

Conventional loans are the most common type of real estate loan issued by banks and financial institutions. These loans are not backed by any government agency, and to qualify for a conventional loan, investors need good credit, a steady income, and a down payment of at least 20% of the property's value. Conventional loans offer lower interest rates than other types of loans, but they may be challenging to obtain due to the strict eligibility criteria. The loan amount is based on the property's appraised value, and lenders require a comprehensive financial analysis of the borrower.

Advantages:

  • Lower interest rates than other loan types
  • Lenders require a comprehensive financial analysis of the borrower, which provides investors with a clear understanding of their financial situation.

Disadvantages:

  • Strict eligibility criteria, such as good credit, steady income, and a minimum down payment of 20%
  • The loan amount is based on the property's appraised value, which may limit the amount of financing available to investors.

Hard Money Loans

Hard money loans are typically issued by private lenders and are secured by the property being purchased. These loans are often used for short-term financing or for borrowers with poor credit scores. Hard money loans come with higher interest rates and shorter repayment terms than other types of real estate investment loans. These loans are ideal for investors who need to purchase a property quickly and do not have time to go through the lengthy process of applying for a traditional loan. However, hard money loans may not be suitable for long-term investments due to their high-interest rates and short repayment terms.

Advantages:

  • Quick access to funds, making them suitable for investors who need to purchase a property quickly
  • Ideal for borrowers with poor credit scores who may not qualify for conventional loans

Disadvantages:

  • Higher interest rates and shorter repayment terms than other loan types
  • Not suitable for long-term investments due to high-interest rates and short repayment terms.

Private Money Loans

Private money loans are similar to hard money loans but are issued by individuals instead of institutions. Private money loans often have higher interest rates and shorter repayment terms than other types of loans. However, these loans may be more flexible and easier to obtain than traditional loans. Private money loans are ideal for investors who require quick access to funds and do not meet the eligibility criteria for conventional loans.

Advantages:

  • More flexible and easier to obtain than conventional loans
  • Ideal for investors who require quick access to funds and do not meet the eligibility criteria for traditional loans.

Disadvantages:

  • Higher interest rates and shorter repayment terms than other loan types
  • Not suitable for long-term investments due to high-interest rates and short repayment terms.

Commercial Loans

Commercial loans are specifically designed for commercial real estate properties and are typically issued by banks or other financial institutions. Commercial loans often have higher interest rates and more stringent requirements than other types of real estate investment loans. These loans are ideal for investors who require funds for purchasing or refinancing commercial properties such as retail spaces, office buildings, or warehouses. Commercial loans typically require extensive documentation and financial analysis, and the loan amount is based on the property's appraised value.

Advantages:

  • Specifically designed for commercial real estate properties
  • Ideal for investors who require funds for purchasing or refinancing commercial properties such as retail spaces, office buildings, or warehouses.

Disadvantages:

  • Higher interest rates and more stringent requirements than other loan types
  • Require extensive documentation and financial analysis, which may be time-consuming and challenging for some investors.

Portfolio Loans

Portfolio loans are a type of loan offered by lenders who keep the loans on their own balance sheet instead of selling them on the secondary market. These loans are often used by investors who own multiple properties and need flexible financing options. Portfolio loans may have variable interest rates and more flexible repayment terms than other types of loans. These loans are ideal for investors who need to refinance multiple properties or who require a line of credit to finance their investments.

Advantages:

  • Offer more flexible financing options than other loan types
  • Ideal for investors who own multiple properties and require a line of credit to finance their investments.

Disadvantages:

  • Variable interest rates, which may increase over time
  • May require a higher down payment or more extensive documentation than other loan types.

Home Equity Loans

A home equity loan is a type of loan in which the borrower uses the equity of their home as collateral. The loan amount is determined by the value of the property, and the value of the property is determined by an appraiser from the lending institution. Home equity loans are often used to finance major expenses such as home repairs, medical bills, or college education. They are usually fixed-rate loans, meaning the interest rate remains the same throughout the life of the loan. The borrower receives a lump sum of money and begins repaying the loan right away at a fixed interest rate.

A home equity loan can be a useful tool for investors to finance their investment property by tapping into the equity of their primary residence.  Homeowners can use home equity loans to purchase investment properties by borrowing against the equity in their homes. The loan amount is based on the difference between the home's current market value and the mortgage balance due, and borrowers need decent credit and proof of income to qualify.

However, most home equity loans require good to excellent credit history and reasonable loan-to-value and combined loan-to-value ratios. Home equity loans create a lien against the borrower's house and reduce actual home equity. It's important to weigh the risks before borrowing against your house and compare loan options from different lenders to find the best terms that fit your investment strategy.

Factors to Consider When Applying For a Loan

When applying for a real estate investment loan, several factors need to be considered. These include:

  1. Financial Resources: This refers to the amount of money you have available to invest and how much you can afford to pay back on a loan. Before applying for a loan, you need to evaluate your financial situation and determine how much money you have available for a down payment, how much you can afford in monthly payments, and what your long-term investment goals are.
  2. Eligibility Criteria: Each loan type has specific eligibility criteria that investors must meet. For example, if you're applying for a conventional loan, you need to have a minimum down payment of 20%, good credit, and a steady income. Other loan types may have different eligibility criteria, so it's important to research and understand the requirements before applying for a loan.
  3. Loan Terms: This refers to the specific terms of the loan, including the interest rate, fees, repayment terms, and penalties for late or missed payments. Before signing any loan documents, you need to carefully review these terms to make sure you understand what you're agreeing to. Some loans may have a fixed interest rate, while others may have a variable rate that changes over time. The repayment terms can also vary, with some loans requiring payments over a longer period of time and others requiring payments to be made more frequently.
  4. Professional Advice: Seeking professional advice from a financial advisor, mortgage broker, or real estate attorney can help you navigate the loan application process and select the loan that best fits your needs. These professionals can provide you with expert guidance on the loan options available to you and the associated risks. They can also help you understand the terms of the loan and ensure that you're getting the best possible deal.

More FAQs on Real Estate Loans for Investors

Real estate loans for investors are a viable option for financing real estate investments. Each loan type has its eligibility criteria, terms, and benefits, making it essential for investors to consider these factors before selecting a loan. Investors should evaluate their financial situation, and investment goals, and seek professional advice before applying for a loan. With the right loan and investment strategy, investors can make successful real estate investments and grow their portfolios over time. Here are some frequently asked questions by potential investors.

What Type of Loan is Best for Investment Property?

There are several types of loans that can be used for investment properties, and the best one for you depends on your specific investment goals and financial situation. Some common options include conventional bank loans, hard money loans, private money loans, and home equity loans.

Is It Easier to Get a Loan for an Investment Property?

Getting a loan for an investment property can be more difficult than getting a loan for a primary residence. This is because lenders consider investment properties to be riskier than primary residences, and they often require higher credit scores and larger down payments. However, there are several types of loans available for investment properties, including conventional bank loans, hard money loans, private money loans, and home equity loans, so it is still possible to secure financing for an investment property.

What is the Maximum Loan Amount for Investment Property?

The maximum loan amount for investment property varies based on factors such as the type of property, the loan program, the borrower's credit score, and the lender's underwriting guidelines. Typically, lenders may offer loan amounts ranging from $50,000 to several million dollars for investment properties.

What are the requirements to qualify for an investment property loan?

To qualify for an investment property loan, lenders typically require borrowers to have a good credit score, a stable income, and a down payment of at least 20% of the purchase price. The borrower may also need to demonstrate sufficient cash reserves and a history of successful real estate investments. Lenders may also evaluate the property's cash flow potential and consider the borrower's debt-to-income ratio and credit history.

What is the difference between a home equity loan and a HELOC for investment property?

A home equity loan and a home equity line of credit (HELOC) both allow homeowners to borrow money against the equity in their property. However, there are some key differences between the two when it comes to using them for investment properties.

A home equity loan is a lump sum loan that is secured by the equity in the property. It typically has a fixed interest rate, a fixed monthly payment, and a set repayment term. Homeowners may use the funds from a home equity loan to make a one-time investment in a rental property.

On the other hand, a HELOC is a revolving line of credit that allows homeowners to draw funds as needed up to a certain limit. It typically has a variable interest rate and a minimum monthly payment that varies based on the amount of credit used. Homeowners may use a HELOC to finance ongoing expenses related to their investment property, such as renovations, repairs, and property management fees.

Overall, the choice between a home equity loan and a HELOC for investment property depends on the individual's financial situation, investment goals, and the type of property they plan to invest in. It is important to carefully consider the terms and requirements of each option before making a decision.

Knoxville Housing Market: Prices, Trends, Forecast 2023

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Knoxville Housing Market

Knoxville, Tennessee, is a vibrant city with a thriving housing market. These housing market trends are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. Knoxville, TN, offers a dynamic and competitive housing market.

With rising home prices, limited inventory, and homes selling close to their listing prices, sellers can take advantage of the current conditions. Buyers and renters can also find a wealth of options to suit their needs and budgets. Whether you're looking to invest, settle down, or explore the rental market, Knoxville presents an exciting opportunity in the real estate landscape.

Knoxville, TN Housing Market: A Look at the Numbers in June 2023

Knoxville, Tennessee, boasts a housing market that has been making waves in recent times. Let's dive into the key statistics and trends shaping the real estate landscape in this charming city as of July 2023.

Median Home Prices on the Rise

In July 2023, the median listing home price in Knoxville, TN, stood at an impressive $426.3K, marking a significant year-over-year increase of 11%. This uptrend reflects the city's growing appeal to homebuyers and investors alike.

When considering the price per square foot, the median listing home price comes in at $215. Additionally, the median home sold price, at $365.8K, highlights the actual transaction values in the Knoxville market.

Balance in Sale-to-List Price Ratio

One notable aspect of the Knoxville housing market in July 2023 is the balanced sale-to-list price ratio of 100%. This indicates that, on average, homes in Knoxville were selling for approximately the asking price. Such equilibrium can provide both buyers and sellers with a fair and transparent environment for transactions.

Seller's Market Dominance

Knoxville, TN, emerges as a seller's market in July 2023, signaling high demand and limited housing inventory. In this scenario, there are more prospective buyers actively seeking properties than there are homes available on the market. This competitive environment can lead to quicker sales and potentially favorable terms for sellers.

Median Days on Market

On average, homes in Knoxville, TN, spend approximately 30 days on the market before finding their new owners. While this figure represents a relatively swift turnover, it's essential to note that the trend for median days on market has increased slightly since the previous month and year. This shift may indicate evolving buyer preferences or market dynamics.

Diverse Neighborhoods in Knoxville

Knoxville offers a rich tapestry of neighborhoods, each with its own unique character and housing market dynamics. With a total of 65 neighborhoods to explore, there's something for everyone.

For those seeking luxury and higher-end properties, Sequoyah Hills stands out with a median listing home price of $772.5K, making it the most expensive neighborhood in Knoxville. On the other end of the spectrum, Burlington offers affordability, boasting a median listing home price of $214.9K, making it the most budget-friendly neighborhood.

As the Knoxville housing market continues to evolve, it presents opportunities and challenges for both buyers and sellers. Staying informed about the latest trends and seeking guidance from local real estate experts can help individuals make informed decisions in this dynamic and competitive market.

Q2 2023 Knoxville Housing Market Pulse Survey

The real estate landscape in Knoxville, Tennessee, is subject to the ebbs and flows of market dynamics, and staying informed about these changes is crucial for industry professionals and potential buyers and sellers. The Q2 2023 Market Pulse Survey, conducted by the Knoxville Area Association of REALTORS®, sheds light on key findings and trends that are shaping the local real estate market.

Key Findings

The survey offers a comprehensive look at the current state of the Knoxville real estate market, and here are some of the key findings:

  • Buyer Traffic: Buyer traffic saw a slight decline in the second quarter, with only 12% of respondents reporting more buyer traffic compared to the previous year. This figure was down from 17% in the previous quarter. On the other hand, seller traffic decreased further, with only 11% of respondents noting an increase compared to the previous year.
  • Expectations: REALTORS® anticipate relatively stable buyer traffic in the coming three months, with 40% expecting lower-than-usual buyer activity. Expectations regarding seller traffic were more varied, with 39% anticipating it to remain the same and 42% expecting it to decrease.
  • Offer Activity: Respondents reported an average of 3.0 offers on homes sold in Q2 2023, showing an increase from the previous quarter's 2.2 offers.
  • Home Sales Outlook: A positive sentiment regarding home sales emerged, with 33% of REALTORS® expecting an increase in home sales over the next year, up from 28% in the previous quarter. Additionally, 42% anticipate sales to remain steady, while 26% expect a decrease.
  • Home Prices: Expectations surrounding home prices remained robust, as 83% of respondents anticipate either stable or rising home prices over the next year, with 64% expecting an increase.
  • All-Cash Sales: In Q1 2023, all-cash sales constituted 30% of all home sales, showing a decrease from 37% in the previous quarter but an increase from 29% a year ago.
  • Appraisal Concerns: REALTORS® reported fewer issues with appraisals, with only 9% of homes sold in the past three months having an appraised value lower than the purchase price, down from 20% a year ago.
  • Contingency Waivers: Buyers displayed more confidence, with 48% waiving at least one contingency in their purchase contract over the past three months, down from 62% a year ago.

The survey's findings highlight the evolving nature of the Knoxville housing market. Economic uncertainties and mortgage rate fluctuations have impacted both buyers and sellers, but the overall outlook is cautiously optimistic. Notably, a majority of local REALTORS® expect home prices to rise in the coming year, indicating a significant shift in sentiment from the previous year.

As the Knoxville real estate market continues to evolve, staying informed about these trends and insights can help individuals make informed decisions in this dynamic industry.

“The housing market is still facing headwinds as economic uncertainty and higher mortgage rates have slowed buyer and seller activity alike,” said Hancen Sale, Government Affairs and Policy Director at East Tennessee REALTORS®. “However, our latest survey suggests Realtors® remain cautiously optimistic, and their outlook on the housing market is improving, especially as it relates to prices.”

Knoxville Housing Market Forecast 2023-2024

According to the forecast by Knoxville Area Association of REALTORS®, in 2023, the Knoxville housing market is expected to undergo a period of receding growth following the exceptional boom experienced over the past two years. The market's impressive performance was primarily driven by a significant supply-demand imbalance and fundamental market forces, including favorable demographic trends, migration patterns, and shifting household compositions.

Additional factors such as pandemic-induced migration, fiscal stimulus, and historically low borrowing costs also played a role, although their influence is diminishing as the pandemic subsides.

As mortgage rates have reached their highest levels in over a decade, coupled with concerns surrounding inflation, the housing frenzy induced by the pandemic has naturally come to an end. However, the market is anticipated to retain most of the gains accrued during the previous two years.

While the pace of home price growth is decelerating, it remains above the historical average. According to the Federal Housing Finance Agency House Price Index (FHFA HPI), home prices in the Knoxville, Tennessee, metropolitan area rose by 18.3% in Q3 of 2022 compared to the previous year.

Rent growth in the Knoxville area remains high, although the rate of increase has moderated in recent weeks. In Q3 of 2022, rents in the Knoxville metropolitan area were up by 19.6% compared to the previous year, surpassing the national rent growth rate of 10.5%.

Home sales are expected to decline between 10% and 12% in 2023 compared to the previous year. Despite the anticipated decline in home sales due to worsening affordability conditions, the persistent lack of inventory will continue to exert upward pressure on prices. Consequently, home prices are forecasted to increase by approximately 3% to 5% in 2023.

In the rental market, Knoxville is expected to experience moderate growth in 2023, with rents forecasted to rise by approximately 4% compared to the previous year.

However, the rental occupancy rate, which reached an all-time high of 98.86% in Q4 of 2021, is forecasted to decline to an average of 96.5% in 2023. This decline suggests a slight easing in rental demand, providing some relief for tenants seeking housing options.

Overall, the Knoxville housing market in 2023 is projected to enter a period of stabilization following the previous years' robust growth. While home sales are expected to decline, home prices and rents are still anticipated to see modest increases. The market will continue to be influenced by factors such as affordability, inventory levels, and broader economic conditions.

Should You Invest In Knoxville Real Estate Market?

There are several reasons why investing in Knoxville's real estate market could be a good choice:

  • Strong appreciation rates: Knoxville has experienced significant home appreciation rates in the last ten years, with an average annual appreciation rate of 8.26%, putting Knoxville in the top 20% nationally for real estate appreciation.
  • Diversified economy: Knoxville's economy is diverse, with several industries such as healthcare, education, and technology contributing to its growth. This diversity helps to stabilize the housing market and makes it less vulnerable to economic downturns. The region is also home to the Oak Ridge National Laboratory, which is a major research facility and employer in the area. This mix of industries helps to create a stable economic environment, which can provide opportunities for real estate investors.
  • Affordable housing market: Compared to other metropolitan areas, Knoxville's housing market is relatively affordable. This makes it an attractive option for investors looking for affordable entry points.
  • Strong rental market: Knoxville has a strong rental market, with a vacancy rate that is consistently lower than the national average. This means that investors have a good chance of finding tenants quickly and maintaining a steady rental income.  The Knoxville military and retiree market can be another potential factor to consider for real estate investment, especially for rental properties. Knoxville is home to several military bases and has a large retiree population, which can create a steady demand for rental properties. This can provide investors with a reliable and stable tenant pool, which can help reduce vacancy rates and ensure consistent rental income.
  • Landlord-friendly environment: Knoxville is known to have a landlord-friendly environment, with laws that are generally favorable to landlords. For example, landlords have the right to evict tenants for non-payment of rent, and the eviction process is generally considered to be quick and efficient. In addition, Tennessee has no state income tax, which can be beneficial for real estate investors looking to maximize their profits.

However, there are also some potential drawbacks to investing in Knoxville's real estate market:

  • Slow population growth: While Knoxville has a diversified economy, its population growth has been slow in recent years. Slower population growth could limit the potential for housing demand, which could impact the appreciation rates in the long term.
  • Limited job growth: Although Knoxville's economy is diverse, job growth has been slower than the national average in recent years. This could limit the demand for housing in the long term, which could impact appreciation rates.
  • Climate risks: Knoxville is located in an area prone to natural disasters such as tornadoes and floods. These climate risks could impact the value of the real estate in the area and lead to higher insurance costs for investors.

Overall, investing in Knoxville's real estate market could be a good option for investors looking for affordable entry points and strong appreciation rates. However, investors should also consider the potential drawbacks, such as slow population and job growth, and climate risks, before making a decision.

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 area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.

NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.

The information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.

Sources:

  • https://www.kaarmls.com/2023/04/05/market-pulse-survey-q1-2023/
  • https://www.realtor.com/realestateandhomes-search/Knoxville_TN/overview
  • https://www.neighborhoodscout.com/tn/knoxville/real-estate
  • https://www.kaarmls.com/market-outlook/
  • https://www.zillow.com/home-values/25428/knoxville-tn/

Tulsa Housing Market: Prices, Trends, Forecast 2023

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How is the Tulsa housing market doing? In this article, we will delve into the current prices, trends, and forecasts for 2023. Tulsa, Oklahoma, is a city brimming with opportunities and a vibrant real estate scene. Whether you're a prospective buyer, seller, or simply interested in understanding the dynamics of the market, this comprehensive overview will provide valuable insights into the housing landscape of Tulsa.

From rising prices and market trends to predictions for the future, join us as we uncover the fascinating world of Tulsa's housing market in 2023. Tulsa, OK's housing market is experiencing significant growth with rising median listing home prices. The seller's market conditions indicate strong demand and limited supply, making it an opportune time for sellers.

Tulsa Housing Market Update: A Seller's Market

The following housing market trends are based on single-family, condo, and townhome properties listed for sale on Realtor.com. Land, multi-unit, and other property types are excluded. Tulsa, OK is a vibrant city with a thriving housing market. July 2023 brings with it a mix of trends and dynamics, shaping the real estate landscape in Tulsa, OK. Let's dive into the latest data and insights to get a comprehensive view of what's happening in the Tulsa housing market.

Tulsa, OK Housing Market Overview

Before we delve into the details, here's a quick snapshot of the Tulsa, OK housing market as of July 2023:

  • Median Listing Home Price: In July 2023, the median listing home price in Tulsa was $267.5K, reflecting a notable 7% year-over-year increase.
  • Median Price Per Square Foot: The median listing home price per square foot stood at $146.
  • Median Sold Price: Homes in Tulsa had a median sold price of $242.5K.

Seller's Market in Tulsa

One of the key takeaways from the July 2023 housing market in Tulsa is that it's a seller's market. This means that the demand for homes is outpacing the available inventory. The sale-to-list price ratio stands at an impressive 100%, indicating that, on average, homes in Tulsa sold for the asking price. This competitive environment highlights the need for buyers to act swiftly and decisively when pursuing properties in Tulsa.

The Pace of Home Sales

On average, homes in Tulsa are spending approximately 34 days on the market. This is a valuable metric to monitor, as it can provide insights into the level of demand and competition within the market. It's worth noting that the trend for median days on the market in Tulsa has decreased since the previous month, indicating a potentially faster pace of sales. However, compared to the previous year, the median days on the market have seen a slight uptick, suggesting a nuanced market dynamic.

Tulsa's Diverse Neighborhoods

Tulsa boasts a rich tapestry of neighborhoods, each with its unique character and appeal. Here are some notable highlights:

  • Maple Ridge Historic District: This neighborhood stands out as one of the most prestigious in Tulsa, with a median listing home price of $930K. It offers a blend of historical charm and modern amenities, making it an attractive choice for discerning buyers.
  • Downtown Tulsa: For those seeking affordability, Downtown Tulsa presents an appealing option, with a median listing home price of $117.5K. It's a vibrant and evolving area with potential for growth and investment.

With 121 neighborhoods in Tulsa, there's a diverse range of options to explore, catering to various preferences and lifestyles.

July 2023 paints a compelling picture of the Tulsa housing market. With rising home prices and a seller's market, buyers need to be well-prepared and proactive in their approach. The pace of sales is showing signs of change, and Tulsa's neighborhoods offer a wide array of choices for those seeking their ideal home. Whether you're a buyer or seller, staying informed about these trends and dynamics is essential for making sound real estate decisions in Tulsa, Oklahoma.

Tulsa Housing Market Forecast 2023-2024

Anticipating the future trends of the Tulsa housing market is crucial for both prospective buyers and sellers. Let's explore the latest data and forecasts to gain insights into the housing market's trajectory in Tulsa, Oklahoma.

Current Market Data

As of July 31, 2023, Zillow provides the following key data points for the Tulsa housing market:

  • Average Home Value: The average home value in Tulsa stands at $195,024, reflecting a significant 5.2% year-over-year increase. This signals healthy growth in home values.
  • Days to Pending: Homes in Tulsa typically go pending within a swift timeframe, averaging around 7 days. This indicates a market with high demand and quick property turnover.
  • Median Sale to List Ratio (June 30, 2023): The median sale price compared to the list price shows a competitive market with a ratio of 1.000.
  • Percent of Sales Over List Price (June 30, 2023): A significant portion of sales (36.3%) is happening above the list price, underlining robust demand.
  • Percent of Sales Under List Price (June 30, 2023): Approximately 39.8% of sales are occurring under the list price, indicating opportunities for buyers.

Tulsa MSA Housing Market Forecast

Looking beyond the immediate future, let's examine the housing market forecast for the Tulsa Metropolitan Statistical Area (MSA), which encompasses the broader Tulsa region. Here's the forecast data:

  • Base Date: July 31, 2023
  • August 31, 2023: 0.4% growth
  • October 31, 2023: 1.3% growth
  • July 31, 2024: 6.8% growth

This forecast provides valuable insights into the expected growth in the Tulsa MSA housing market. While there may be short-term fluctuations, the forecast indicates overall positive growth over the specified time frames.

Are Home Prices Dropping in Tulsa?

Based on the available data and the forecast, home prices in Tulsa are not dropping. The average home value has experienced a significant 5.2% year-over-year increase, indicating a healthy upward trend. Additionally, a substantial portion of sales is happening above the list price, emphasizing strong demand in the market.

While real estate market conditions can vary, the data and forecast for Tulsa suggest that the housing market is currently experiencing growth rather than a decline in home prices.

It's important for individuals interested in buying or selling homes in Tulsa to stay informed about market trends and forecasts, as these insights can guide decision-making and help seize opportunities in the dynamic Tulsa housing market.

Factors contributing to this positive forecast may include a robust local economy, population growth, and a relatively affordable cost of living compared to other regions. However, it's essential to keep in mind that real estate markets are subject to various factors and can be influenced by national and global economic conditions, interest rates, and other unforeseen events.

Tulsa Housing Market Forecast 2023-2024
Source: Zillow

Should You Invest In Tulsa Real Estate Market?

If you're considering investing in real estate, Tulsa could be a good option to explore. Here are some of the top reasons why investing in Tulsa real estate could be a wise choice, as well as potential drawbacks to keep in mind.

Top Reasons to Invest in Tulsa Real Estate:

  • Strong Market Growth: Over the past year, the Tulsa housing market has shown impressive growth, with the average home value increasing by 5.2% to reach $195,024. The current median sale to list ratio indicates a strong seller's market, and the median days to pending is relatively fast, indicating a high demand for homes.
  • Affordable Prices: Compared to other major cities, Tulsa offers affordable real estate prices, making it an attractive option for investors seeking high rental yield and positive cash flow.
  • Diverse Economy: Tulsa's economy is diverse, with a mix of industries that includes energy, healthcare, and aerospace. This diversity helps to create a stable job market, which can lead to increased demand for housing and potential appreciation in property values.
  • Favorable Rental Market: Tulsa's rental market is strong, with a high demand for rental properties and relatively low vacancy rates. This creates an opportunity for investors to generate passive income through rental properties. The massive student market in Tulsa can be a good investment opportunity due to the presence of multiple colleges and universities in the area, including the University of Tulsa, Oral Roberts University, Oklahoma State University, and Spartan School of Aeronautics. With a diverse student population, investing in real estate aimed at students can create a stable portfolio, as returns and overall property values are not tied to the popularity of just one school.
  • Tax Benefits: Oklahoma offers several tax incentives for real estate investors, including low property taxes and exemptions for certain types of properties.

Potential Drawbacks to Keep in Mind:

  • Weather Conditions: Tulsa is located in “Tornado Alley,” which means it is prone to severe weather conditions, including tornadoes and hail storms. This can lead to damage to properties and increased insurance costs.
  • Dependent on Oil Industry: While Tulsa's economy is diverse, it is still heavily dependent on the oil industry, which can be volatile and subject to fluctuations in global oil prices.
  • Limited Appreciation Potential: While Tulsa's real estate market is growing, it may not appreciate as quickly as markets in larger cities with stronger job growth and population growth.
  • Limited Investment Options: While there are opportunities to invest in residential properties, the options for commercial real estate investment may be more limited in Tulsa.

Overall, investing in Tulsa real estate could be a good option for investors seeking affordable prices, strong rental demand, and a stable job market. However, investors should carefully consider the potential drawbacks and risks associated with investing in the region, including severe weather conditions and dependence on the oil industry.

Buying an investment property is different from buying an owner-occupied home. Whether you are a beginner or a seasoned pro you probably realize the most important factor that will determine your success as a Real Estate Investor in Tulsa, OK is your ability to find great real estate investments in that area.

According to real estate experts, buying in a market with increasing prices, low interest, and low availability requires a different approach than buying in a cooler market.

We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.

Contact Us

The information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.

Sources:

  • https://www.zillow.com/home-values/20859/tulsa-ok/
  • https://www.redfin.com/city/35765/OK/Tulsa/housing-market
  • https://www.realtor.com/realestateandhomes-search/Tulsa_OK/overview

Indianapolis Housing Market: Prices, Trends, Forecast 2023

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The Indianapolis housing market is a dynamic and thriving real estate landscape, attracting both homebuyers and investors alike. As the capital city of Indiana and the 16th-most populous city in the U.S. (2020 Census), Indianapolis offers a diverse range of neighborhoods, excellent amenities, and a strong job market, making it a sought-after destination for those looking to settle down or invest in real estate.

In this post, we will delve into the current state of the Indianapolis housing market, examining key factors such as home prices, trends, and the forecast for 2023. We'll explore the market conditions that are driving housing prices, analyze the latest trends shaping buyer and seller behavior, and provide insights into what the future holds for real estate in Indianapolis.

Whether you're a prospective homebuyer eager to find the perfect property or a savvy investor seeking profitable opportunities, this guide will equip you with the essential knowledge to navigate the Indianapolis housing market with confidence. Let's dive into the data and uncover the fascinating world of Indianapolis real estate.

Indiana Housing Market Trends

The Indiana housing market experienced a slowdown in July 2023 as increased mortgage rates and ongoing inventory challenges led to decreased real estate activity. The latest data from the Indiana Association of REALTORS® (IAR) provides insights into the current state of the housing market in the state.

Key Findings

  • Decline in Home Sales and Listings: In July 2023, existing home sales in Indiana totaled 6,941, marking a 19% decrease compared to July 2022. New listings also dropped by 17% year-over-year, with a total of 8,560 new properties listed for sale.
  • Impact of Mortgage Rates: The housing market was influenced by congressional concerns over the U.S. debt limit, worries about banking resilience, and a quarter-percent rate hike by the Federal Reserve. These factors pushed mortgage rates close to 7%, slowing down the market's growth, which had seen a 30% increase in statewide sales from April through June.
  • Inventory Challenges: Higher mortgage rates prompted potential sellers to hesitate, resulting in fewer new listings. This limited supply, bringing the average daily inventory of homes for sale across Indiana's eight MLS marketplaces to 10,118, down from 11,320 in July 2022. Despite this, the state's median sale price remained relatively stable at $256,250.
  • Comparative Market Performance: While Indiana's housing market experienced a 14% drop in sales through the first six months of the year, it fared better than the national average, with the National Association of REALTORS® (NAR) reporting a 23% decline in sales from 2022 to 2023 year-to-date.

Insights from IAR President Lynn Wheeler

Lynn Wheeler, the President of IAR, highlighted that Indiana's housing market has demonstrated resilience compared to many other regions. Despite the drop in sales, the median sale price reached an all-time high, and buyers remained active, with homes quickly going pending.

Wheeler also pointed out that the current market, although impacted by higher rates and prices, offers less competition than previous summers. Additionally, sellers have become more flexible, with an increasing number of properties reducing their prices. This shift may indicate buyers gaining some bargaining power in the market.

July Highlights

  • July's closed sales of 6,941 brought the year-to-date total for 2023 to 44,406, a 15% decrease from the same period in 2022.
  • Year-to-date listings reached 54,207 with the addition of 8,560 in July, trailing 17% behind the first seven months of the previous year.
  • July's median sale price of $256,250 was the second-highest monthly median price in Indiana's history.
  • Sales were divided by price range, with sales under $250,000 down 25% year-over-year, sales between $250,000 and $749,000 falling 16%, and sales of $750,000+ increasing by 27%.
  • Inventory in July averaged 10,118 daily listings, representing a middle ground between the year's highest and lowest levels.
  • Rural counties in Indiana experienced a more modest 15% year-over-year drop in sales compared to the state as a whole.

The Indiana housing market faced challenges in July 2023, primarily driven by rising mortgage rates and inventory constraints. However, it remains resilient, with potential opportunities for homebuyers as competition eases, and sellers adjust their expectations.

Indianapolis Housing Market Trends

Marion County, located in the heart of Indiana, is home to the state capital, Indianapolis. According to the data released by the Indiana Association of REALTORS®, the Marion County housing market in July 2023 exhibited several notable trends and changes, providing insights into the local real estate landscape. Here's a detailed look at the key metrics and statistics for Marion County:

New Listings

In July 2023, Marion County recorded 1,425 new property listings, reflecting an 18.4% decrease compared to July 2022. Year-to-date data through July 2023 shows a total of 8,931 new listings, indicating a 19.1% reduction compared to the same period last year. This decline in new listings suggests a potential shortage of available properties in the market.

Closed Sales

Marion County reported 1,121 closed sales in July 2023, marking a significant decrease of 21.5% compared to July 2022. Year-to-date figures through July 2023 reveal a total of 7,291 closed sales, representing a 16.9% decline compared to the previous year. This decline in closed sales indicates a slowdown in real estate transactions within the county.

Median Sales Price

The median sales price for properties in Marion County saw a modest increase in July 2023, rising by 0.5% to reach $249,000. Year-to-date data through July 2023 shows a median sales price of $237,500, reflecting a 1.1% increase compared to the same period last year. This suggests that property values have remained relatively stable in Marion County.

Percent of Original List Price Received

The percentage of the original list price received for properties in Marion County in July 2023 was 97.7%, which represents a 2.3% decrease compared to July 2022. Year-to-date figures through July 2023 show that the percentage of the original list price received was 96.8%, indicating a 3.8% decrease compared to the previous year. This may suggest that buyers have slightly more negotiating power in the market.

Months Supply of Inventory

The months supply of inventory in Marion County increased from 1.3 to 1.6, reflecting a 23.1% uptick compared to the previous year. This metric measures the balance between supply and demand in the housing market. An increase in months supply suggests a potential shift towards a more balanced market.

Inventory of Homes for Sale

Marion County had an inventory of 1,732 homes for sale in July 2023, which represents a 0.9% increase compared to the same period in the previous year. This increase in inventory could provide more options for prospective buyers in the county.

Overall, the Marion County housing market in July 2023 displayed a slowdown in new listings and closed sales, along with a slight increase in the median sales price. Buyers may have a bit more negotiating power, as indicated by the percentage of the original list price received. The increase in inventory and months supply of inventory suggests a shift toward a more balanced market. These trends provide valuable insights for those navigating the Marion County real estate market.

Indianapolis Housing Market Forecast 2023-2024

What are the Indianapolis real estate market predictions?  The Indianapolis real estate market has been experiencing steady growth in recent years, and the forecast for 2023-2024 suggests that the trend will continue. Here's a comprehensive overview of the market and a look at its forecast:

Current Market Snapshot

According to Zillow, as of July 31, 2023, the average home value in the Indianapolis-Carmel-Anderson area stands at $271,482, reflecting a 2.1% increase over the past year. Properties in this region tend to move quickly, with an average of just 6 days on the market before going pending, indicating high demand and a competitive market.

Additional key statistics as of June 30, 2023, include:

  • 1-year Market Forecast: A promising 7.6% market forecast for the Indianapolis area, indicating expected growth in the real estate market.
  • Median Sale to List Ratio: A strong ratio of 1.000, suggesting that properties are typically selling at their list prices.
  • Percent of Sales Over List Price: A significant 39.2%, signifying a substantial portion of properties selling for prices above their list prices.
  • Percent of Sales Under List Price: Another 39.2%, indicating a competitive market with a balance of properties selling both above and below their list prices.
  • Median Days to Pending: Just 6 days on average for a property to go pending, reflecting a rapid pace of transactions.

Is the Indianapolis Housing Market Slowing Down?

Given the robust statistics and forecasts, it's essential to address the question: Is the Indianapolis housing market slowing down?

While the Indianapolis market has been exceptionally competitive and fast-paced, with properties often selling quickly and even above their list prices, the 7.6% one-year market forecast for July 31, 2023, suggests continued growth and demand in the foreseeable future. This forecast indicates that the market is not necessarily slowing down but rather maintaining its strength.

However, real estate markets can be influenced by various factors, including economic conditions, interest rates, and supply and demand dynamics. It's crucial for both buyers and sellers to stay informed about the latest market trends and conditions, as they can change over time.

Ultimately, the Indianapolis housing market remains highly competitive and promising, making it an attractive destination for those looking to buy or sell property. As with any market, staying updated and seeking professional advice can help individuals make informed decisions in this dynamic real estate environment.

Implications for Buyers and Sellers:

For Buyers: Buyers in the Indianapolis area should be prepared for a competitive market. With homes going pending in just five days on average, it's crucial for buyers to act quickly and be prepared to make competitive offers. Additionally, since a significant percentage of sales are happening above the list price, buyers should carefully assess their budgets and be prepared for potential bidding wars.

For Sellers: Sellers in the Indianapolis housing market are currently enjoying strong demand and rising property values. The limited supply of homes creates a seller's market, presenting an opportunity for sellers to receive competitive offers. However, it's essential for sellers to price their homes appropriately and work with experienced real estate professionals to maximize their return on investment.

Indianapolis Housing Market Forecast 2023-2024
Source: Zillow

Indianapolis Real Estate Investment Overview

Now that you know where Indianapolis is, you probably want to know why we’re recommending it to real estate investors. When it comes down to the Indianapolis real estate market, it is considered to be an excellent destination for cash flow rental properties. There is a strong and steady year-over-year appreciation of Indianapolis investment properties. You need to drill deeper into local trends if you want to know what the market holds for real estate investors and buyers.

Let’s talk a bit about Indianapolis before we discuss what lies ahead for investors and homebuyers. Indianapolis is also known as the crossroads of America with six interstate highways crossing through the town. However, the transport sector isn't the only thing the city is good for. Construction in Indianapolis seems to be a trend ever since 1849 with America's first Union Station. The construction companies have been stretching their profit margins from the ever-growing Indianapolis housing market.

Why should one invest in this hot market in the state of Indiana? Well, to begin with, Indianapolis has a record of being one of the best long-term real estate investments in the U.S. over the past 10 years. Over the last decade, the cumulative appreciation rate has been 92.94 percent, placing it in the top 30% nationally. This equates to an annual average house appreciation rate of 6.79 percent in Indianapolis, according to NeighborhoodScout data.

Why Is Indianapolis A Good Place For Real Estate Investment?
  • Highest Job Growth in the Midwest
  • Ranked the #1 most affordable place to own real estate. (Forbes Magazine)
  • Unemployment is below the national average.
  • Highest job growth in the Midwest.
  • Properties up to 10% below the market.
  • 1-year appreciation forecast is positive.

Let’s look at the state of the Indianapolis real estate market and the factors driving the market in the short and long term.

Indianapolis's Business-Friendly Economy

The circle city may be the 13th largest city in the nation but that doesn't stop it from carefully drawing out its budget to accommodate its locals. It's one of the few cities running on a surplus balanced budget making it favorable for most business investments. This is due to the low tax levied on business premises making it a viable option for the rental real estate business.

Indianapolis has the highest job growth in the midwest. It has seen a surge in the technology sector ushering in a new business climate for the city. In 2016, over 49 companies chose to expand their firms and relocate opening up branches in the area. This led to over 4,500 unemployment cases being eradicated contributing to the overall growth in the local economy. Low cases of unemployment are a great way of attracting new families moving into the area and another reason for real estate investment.

The state capital has been directed towards funding several diversified sectors including tourism. The city hosts major sporting events like the NCAA basketball championships, and the famous Indy Car Race which attracts huge crowds each year. The Indianapolis real estate market can thrive from this especially in the home rental business during such occasions. Other areas of diversification include pharmaceutical as well as retail and healthcare investments.

Indianapolis Has Affordable Cost of Living

Due to the nature of commerce heavily practiced in the area, it's the most affordable place to be. According to CNN Money, it boasts of an affordability score of approximately 96% with low mortgage rates surpassing Dayton Ohio following it closely. The Indianapolis real estate market has been considered to be among the most stable markets out there. This is due to the city's location. The mid-western city's distance from the coast makes its market much more reliable unlike cities like other cities based off the coast. Their markets change just as the seasons come and go.

Increasing Home Prices in Indianapolis

Probably one of the best news to an Indianapolis real estate market investor is to learn of the rise in home prices. Over the recent past, home values have shot up by over 18% percent with the median home value reaching about $217K, according to local real estate agents. Not only will an investor get his money's worth but also stretch out profit margins as time goes by. A wise investment usually quickly returns the capital pumped into it. Indianapolis realtors have confessed to closing the fastest deals of their lifetime. Properties sell quite fast as they are listed on the market. This is advantageous to an investor as worrying about marketing and advertising is completely done away with.

Rise in Population

The population density in Indianapolis is on the rise with a growth rate of 0.33% according to the latest census conducted. Demographics show that the rise saw up to a 3.9% growth rate of African Americans, replacing the non-Hispanic which accounted for a greater percentage of the population. This diversification is a culmination of the accepting nature of the locals towards people of all backgrounds living side by side and in need of new homes.

Indianapolis is One of The Best Downtowns

According to Forbes, Indianapolis is one of the USA's best downtowns. The Circle city is known for its urban design with several construction projects underway with more contracts generated than they are completed. Improved public spaces and conservation-minded avenues are the things for most parts of the town. For those with a keen eye for real estate investment, this could be a major influence over the Indianapolis real estate market. The average rent for a 1-bedroom apartment in Downtown Indianapolis, Indianapolis, IN is currently $1,455. This is a 1% increase compared to the previous year.

Indianapolis Rental Market Has High Demand

Indianapolis is a College Town with university students choosing to reside off-campus. Moreover, graduates tend to move to the immediate area while starting out creating a huge rental market. For Entrepreneurs, opening up shop also adds to the demand. The average rent for a 1-bedroom apartment in Indianapolis, IN is currently $1,150.

This is a 7% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Indianapolis increased by 2% to $1,176. The average rent for a 1-bedroom apartment increased by 2% to $1,150, and the average rent for a 2-bedroom apartment remained flat.

  • The average rent for a 2-bedroom apartment in Indianapolis, IN is currently $1,300. This is a 4% increase compared to the previous year.
  • The average rent for a 3-bedroom apartment in Indianapolis, IN is currently $1,585. This is a 1% increase compared to the previous year.
  • The average rent for a 4-bedroom apartment in Indianapolis, IN is currently $1,845. This is a 1% decrease compared to the previous year.

Best Indianapolis Neighborhoods To Buy Investment Properties

Are you considering Indianapolis real estate investment? Maybe you have done a bit of real estate investing in Indianapolis but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. Indianapolis offers great opportunities for turnkey real estate investments.

This is especially true for investors who want to invest in the market which is ranked the #1 most affordable place to own real estate (Forbes Magazine). In the Indianapolis real estate market, it is still possible to purchase cash flow turnkey properties that are up to 10% below market value – which means you get the best returns on your investment.

Good cash flow from Indianapolis 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 Indianapolis in a growing neighborhood would be key to your success. If you invest wisely in Indianapolis’s real estate, you could secure your future.

The less expensive the Indianapolis investment property is, the lower your ongoing expenses will be. As with any real estate purchase, act wisely. Evaluate the specifics of the Indianapolis housing market at the time you intend to purchase. When looking for the best real estate investments in Indianapolis, 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 best neighborhoods in or around Indianapolis, Indiana are Near Eastside, Far East Side, and South Broad Ripple. Home prices in Indianapolis are well below the national average for all cities and towns in the United States.

Highest Appreciating Indianapolis Neighborhoods Since 2000 (List by Neighborhoodscout)

  • Near Northside
  • Old Northside / Herron Morton
  • Arsenal Heights West
  • Ransom Place
  • N Beville Ave / E St Clair St
  • N Rural St / E 9th St
  • Woodruff Place / Arsenal Heights
  • Fletcher Place
  • Fountain Square
  • Fall Creek Place East

There are some great neighborhoods in Indianapolis where you can consider buying investment properties. Here is a list of some of the best neighborhoods in Indianapolis for real estate investment (Data by Niche.com).

1. Glendale, Indianapolis

According to Niche.com, Glendale is one of the best neighborhoods to live in in the Indianapolis area. The area is suburban with a total population of 4,419. Glendale is a neighborhood located on the north side of Indianapolis, located immediately east of Broad Ripple. Glendale is one of the oldest suburban neighborhoods in Indianapolis and is fairly residential, despite being a heavy commercial district. It is best known as the home of Glendale Town Center.

Median Home Value in Glendale $235,303
Public Schools A- Grade
Median Rent in Glendale $874
Housing B Grade

2. North Central, Indianapolis

North Central is one of the best neighborhoods to live in in the Indianapolis area. It is a suburban area with a population of 5,572. About 26% of the population are renters.

Median Home Value in North Central $309,728
Public Schools B+ Grade
Median Rent in North Central $1,439
Housing A- Grade

3. Broad Ripple Village, Indianapolis

Broad Ripple Village is currently #1 in the best neighborhoods to live in the Indianapolis area. It is one of seven areas designated as cultural districts in Indianapolis, Indiana. Located about six miles (11 km) north of Downtown Indianapolis, Broad Ripple was established in 1837 as an independent municipality and annexed by the city of Indianapolis in 1922. Broad Ripple High School, one of the earliest Indianapolis Public Schools, is located within the Village. The area is suburban with a population of 6,884.

Median Home Value in Broad Ripple Village $233,821
Public Schools B- Grade
Median Rent in Broad Ripple Village $1,374
Housing A Grade

4. Delaware Trails, Indianapolis

Delaware Trails is another best neighborhood to live in in the Indianapolis area. It is a suburban area with a population of 8,174. About 26% of the population are renters.

Median Home Value in Delaware Trails $218,641
Public Schools A- Grade
Median Rent in Delaware Trails $864
Housing A- Grade

5. Allisonville, Indianapolis

Allisonville is another best neighborhood to live in in the Indianapolis area. The area is suburban with a population of 10,175. Allisonville residents enjoy a dense suburban feel, with the majority of residents owning their homes. There are numerous bars, restaurants, coffee shops, and parks in Allisonville. Allisonville is home to a large number of families and young professionals, and residents generally hold moderate political views. Allisonville's public schools are highly regarded.

Median Home Value in Allisonville $284,807
Public Schools A- Grade
Median Rent in Allisonville $1,242
Housing A- Grade

6. Millersville, Indianapolis

Millersville is an Indianapolis neighborhood with a population of 8,800. Millersville is located in Marion County and is considered to be one of the best places to live in the state of Indiana. Millersville provides residents with a dense suburban feel, and the majority of residents own their homes. There are numerous bars, restaurants, coffee shops, and parks in Millersville. Millersville is home to a large number of young professionals and residents who lean liberal. Millersville's public schools are highly regarded.

Median Home Value in Butler-Tarkington $176,736
Public Schools A- Grade
Median Rent in Butler-Tarkington $1,006
Housing A- Grade

Indianapolis Turnkey Properties For Sale

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.

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 Indianapolis.

Consult with one of the investment counselors who can help build you a custom portfolio of Indianapolis turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Indianapolis, and have a 3-year appreciation forecast of 10.3%.

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 Indianapolis turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.

On the west of Indiana lies the state of Illinois. In Illinois, Chicago is a hot and sizzling real estate market. 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 not only home to several corporate headquarters; there has been a recent trend of companies moving their headquarters to Chicago as well.

The steady increase in jobs has contributed to a slow but steady increase in rents. Many businesses are attracted by Chicago’s labor pool, the largest in the nation. As these businesses move into the area and attract relocating professionals, many are forced to rent because they can’t find houses fast enough in the areas they want to live in or simply choose to rent upon relocation in one of the luxury apartments downtown.

On the east of Indiana lies the state of Ohio. In Ohio, we recommend Cleveland for real estate investment. Cleveland’s population is stable at around 400,000 residents. It is doing a decent job of retaining its young people. Why is that something to bring up when discussing the Cleveland housing market? Because it is right next to Detroit, a city that has been shedding people for decades. The Cleveland real estate market is thus bolstered by steady to slow growth, though specific neighborhoods are seeing spikes in their valuations as new employers and attractions move in.

Let us know which real estate markets you consider best for real estate investing!

Some of the information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.

References

Latest Market Data, Trends, and Statistics
https://www.indianarealtors.com/consumers/housing-data/
https://www.zillow.com/Indianapolis-In/home-values
https://www.neighborhoodscout.com/in/indianapolis/real-estate
https://www.realtor.com/realestateandhomes-search/Indianapolis_IN/overview
https://www.zumper.com/rent-research/indianapolis-in

Why Invest in Indianapolis Rental Market
http://www.cashflowdiaries.com/why-is-indianapolis-such-a-great-city-to-invest-in
https://www.threaltyinc.com/blog/2017/01 /04/why-invest-in-rental-properties-in-indianapolis-in

Best Neighborhoods in Indianapolis
https://www.niche.com/places-to-live/n/allisonville-indianapolis-in

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