Norada Real Estate Investments

Seattle Real Estate Investment: Is it a Good Place to Invest?

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Is Seattle a Good Place to Invest in Real Estate?

Should you consider investing in Seattle real estate? Well, to answer that question we should take a look at its economy and jobs. Many real estate investors have asked themselves if buying a property in Seattle is a good investment. You need to drill deeper into local trends if you want to know what the market holds for the year ahead.

Seattle is a fairly walkable city in King County of Washington. It has a mixture of owner-occupied and renter-occupied housing. According to Neighborhoodscout.com, a real estate data provider, three and four-bedroom large apartment complexes are the most common housing units in Seattle's real estate market.

<<<Also Read: Seattle Housing Market Trends & Forecast>>>

Other types of housing that are prevalent in the market include single-family detached homes, duplexes, rowhouses, and homes converted to apartments. Single-family homes account for about 40% of housing units in Seattle. At the national level, single-family rental homes have grown up to 30% within the last three years. The Seattle real estate market always looks nearly as expensive as an overheated market. We all know that Seattle is an expensive real estate market that gives many investors pause. However, there are many compelling reasons to invest in Seattle.

After a significant decline in Seattle home prices in the past year, the prices have taken a good jump in the latest quarter of 2020. The shortage of homes for sale in the Seattle housing market is causing prices to rise. And so for all those reasons and more, rising property values are a positive development for homeowners and sellers in the Seattle area. The ongoing nationwide crisis has affected the real estate market of Seattle as well but not as much as we expected. As housing inventory in Seattle remains tight, it would make things very challenging for buyers.

Last Year's Housing Trends for Seattle  

In the last year, we had record-breaking sales in the Seattle housing market despite record-low inventory levels. No month had a supply greater than a month. By and large, industry analysts define a balanced market as having an inventory of four to six months. The Seattle area home prices continue to rise beyond the reach of many buyers. The median home sold for $828,111 in King County, up 14.2 percent from 2020.

Prices increased even faster in Snohomish County, where the median price of $680,000 increased by 23.6 percent, and in Pierce County, where the median price of $502,500 increased by 19.6 percent. San Juan County had the highest median sale price: $860,000, an increase of 26.8 percent over a year ago. Seattle's median home price reached $859,000, an increase of 7.4 percent from 2020. Other areas of the county experienced greater increases.

Members of the Northwest Multiple Listing Service reported 107,354 closed sales in 2021. This was the first time the annual volume of sales exceeded 100,000 transactions. Completed sales exceeded $75 billion last year, surpassing the figure for 2020 by nearly $18.9 billion, representing a year-over-year (YOY) increase of nearly 33.6 percent.

Residential (single-family) home and condominium sales in 2021 exceeded those in 2020 by 11,594 transactions or 12.1 percent. Around 86 percent (92,713) of completed sales were single-family homes, while the remaining 14 percent (14,641) were condominiums. Buyers found themselves in competitive bidding situations for last year's sales, frequently paying above the asking price. Across the board, buyers paid an average of 104.7% of the listing price. King County homebuyers paid 106.6 percent, followed by Snohomish County homebuyers who paid 106 percent.

Condo prices area-wide (NWMLS members) rose 11.8%, from $380,000 in 2020 to $425,000 for last year's sales. In King County, which accounted for about six of every 10 condo sales (59%), the median price was $459,000, up a modest 6.7% from 2020. Less than 6% of last year's sales of single-family homes system-wide sold for less than $300,000. About half (48.8%) had sales prices between $500,000 and $1 million dollars. Almost two-thirds of condos (63.1%) sold for a half-million dollars or less.

The highlights in MWLS's annual compilation of statistics for the tri-county areas were showed that the average prices for single-family homes (excluding condos) in the tri-county areas of King, Pierce, and Snohomish have skyrocketed since 1991.

  • From 1991 to 2001 prices rose 88.8% in King County, 57% in Snohomish County, and 32.3% in Pierce County.
  • From 2001 to 2011 prices increased 31.2% in King County, 16.2% in Snohomish County, and 23.5% in Pierce County.
  • From 2011 to 2021 prices surged 249% in King County, 274% in Snohomish County, and 258% in Pierce County.

A closer look at 8,580 condo sales within six “sub-areas” of King County (where nearly 60% of all condo sales were located) shows Seattle accounted for 3,373 of them (about 39%), followed by the Eastside with 36%. The priciest condos, with a median sales price of $550,000, are on the Eastside, followed by Seattle ($495,000). Head south for more affordably priced condos. In the Southwest part of King County, the median sales price was $280,000, followed by the Southeast segment at $340,000.

Seattle Housing Demand is Strong

What does the state of Silicon Valley real estate have to do with the Seattle real estate market? Quite a bit. Seattle has long been a second-tier technology hub, bolstered by companies like Boeing, Amazon, F5, and Real Networks. Seattle’s strong tech ecosystem has led to several startups choosing to start here, but more importantly, many tech giants are setting up “outposts” here.

They’re moving jobs to Seattle so they can afford to expand or simply afford to remain in business. The influx of new high-paying jobs plus relocating employees to Seattle is driving demand for homes in Seattle. Over the past 10 years, Amazon has grown more than tenfold in the city of Seattle, from about 4,000 employees in its hometown to over 45,000.

Much of the growth in the local housing market can likely be attributed to growth at Amazon. The Seattle real estate market shares many of the constraints that drove up real estate prices in San Francisco. You can’t realistically build on water. It is hard to build in the mountains. You can build up, but that takes time and is expensive. And all the while, everyone wants to live close to the city center and jobs. This helps keep property values in the Seattle housing market high.

Seattle Housing Market Predictions

Seattle Real Estate Investment

Seattle housing prices are going to rise in 2022 and 2023 albeit at a slower rate. Let us look at the price trends recorded by Zillow over the past few years. For the past 6 to 7 years an extreme drop in inventory led to an astronomical rise in Seattle home prices, as buyers competed over a dwindling number of properties on the market. Seattle has a track record of being one of the best long-term real estate investments in the U.S.

Since the last decade (Aug 2012), the home values in the city of Seattle have appreciated by nearly 154% — Zillow Home Value Index. As you can see in the graph given below, the home values increased consistently, starting in late 2012 and continuing through 2018. After that, it marked the beginning of a sustained downturn in prices which lasted for over a year. In 2018, prices took a steep drop. From July 2018 onward the home values started declining and they continued so until November of 2019. The trajectory has shifted from last Oct 2019 to an upward trend.

The current typical home value of homes in Seattle is $982,604. ZHVI represents the whole housing stock and not just the homes that list or sell in a given month. It indicates that 50 percent of all housing stock in the area is worth more than $982,604 and 50 percent is worth less (adjusting for seasonal fluctuations). In June 2021, the typical value of homes in Seattle was around $857,000. Home values have gone up 14.5% since then.

Similar growth has been recorded by NeighborhoodScout.com. Their data also shows that Seattle's real estate appreciated 124.93% over the last ten years, which is an average annual home appreciation rate of 8.44%, putting Seattle in the top 10% nationally for real estate appreciation.

As of now, Seattle prices are up across the board. Condos are still below their peak price, but this is the highest the condo price has been since the peak of 2018. Houses have surpassed the peak breaking records month over month. During the latest twelve months alone, the Seattle appreciation rate has been 11.58%, and in the latest quarter, the appreciation rate has been at 1.69%, which annualizes to a rate of 6.92%.

This figure also corroborates Zillow's positive forecast, so the home prices in this region are expected to increase by a single digit in the next twelve months. It means that there is a situation in which demand exceeds supply, giving sellers an advantage over buyers in price negotiations. That's how housing prices increase in a region.

Here is the housing forecast for Seattle, King County, and Seattle MSA. The home appreciation has been incredibly strong over the past year.

  • Seattle-Tacoma-Bellevue Metro home values have gone up 21.1% (current = $793,263) over the past year.
  • The Seattle metro housing market forecast ending with June 2033 is positive.
  • Zillow predicts that Seattle metro home values may grow by 6.6% by June 2023.
  • If this forecast is correct, Seattle metro home prices will be higher in the 2nd Quarter of 2023 than they were in the 2nd Quarter of 2022.
  • Seattle (City) home values have gone up 14.5% over the past year.
  • King County home values have gone up 20.7% ($933,537 as of June 2022).
  • Pierce County home values have gone up 17.8% over the past year.
  • Pierce county is comparatively affordable with a typical home value being $571,129.
  • The typical home value of homes in Snohomish County is $783,516, up by almost 24.5% over the past year.

The chart below, created by Zillow, shows the growth of median home values since 2012.

Seattle Housing Market Forecast
Source: Zillow

Seattle Real Estate Investment Generates Excellent ROI In The Long Term

Seattle's housing market has been one of the hottest in the country for years. In the past ten years, the annual real estate appreciation rate has amounted to nearly 9.26%. This puts Seattle in the top 10% nationally for real estate appreciation. Seattle has repeatedly hit lists as being among the top cities for real estate sellers to get the highest return on their investment.

Property values have gone up consistently for years. Rental rates are high and continue to rise, guaranteeing ROI for those who buy and hold properties for the long term. We’ve already addressed the fact that you can raise rents as necessary to match the market. This means you will certainly be able to profit from the large rental market in Seattle whether you buy and hold or buy and flip.

Seattle Has Friendly Business Climate

Businesses aren’t just relocated to Seattle to tap into a growing, skilled labor market. Others are simply relocating because they cannot stay in business in California. California has the highest income taxes in the United States. Incredibly intrusive and endlessly proliferating regulation only makes it harder for businesses to operate. While many businesses are moving to Texas, Seattle is closer both in culture and geography. That they can find cheaper talent and real estate while gaining more freedom to operate their businesses only adds to the bottom line.

Seattle's Tech Landscape Is Rapidly Evolving

Seattle was the fastest-growing major city in the country in 2015. It has ranked among the top 5 fastest growing cities since 2010, hitting a 3.1% annual growth in 2016. Many young people move here because it is seen as an excellent place to live and get started, and that’s aside from the strong job market. The exodus from California to Seattle is only part of the equation, since Seattle attracts people from all over the country, and in truth, around the world. Seattle's tech landscape and real estate market are rapidly evolving.

Google has upped the size of its new Seattle campus. Facebook has been on a hiring spree in the Seattle area, particularly for its virtual reality arm Oculus, which is growing fast in Microsoft’s backyard of Redmond. GeekWire reported on new HQ leases for top Seattle startups Rover and Outreach. Other companies continue to grow and that will pick up any slack. Tech has blown up Seattle. For the past 5 years, we have seen 50% price growth in this market which has priced out many middle-class buyers.

Seattle Rental Market Is Very Strong

Around a third of people in the U.S. rent. However, in Seattle, the rate is over half. This is partially due to the cost of homes in the Seattle housing market. Another contributing factor is that Millennials are less willing to be tied down to a home and thus prefer to rent, while Seattle is one of the top cities for attracting these young adults.

They’re probably going to continue to rent instead of buying homes. Environmentalist protections for large swaths of land around Seattle limit how far the city could spread out. This prevents the value of homes in the Seattle housing market from coming down as people relocate to distant suburbs, trading home values for commute time. Building up is increasingly an option, but you can’t do that here the way they’ve done it in Miami.

The financial district allows buildings to be as tall as FAA regulations allow, but that’s pretty much it. Nor does that designation matter much, since the area is mostly built-up. The rest of Seattle is zoned low, preventing demand from being met by building condo towers. That keeps Seattle rental property rates high.

Seattle Rent Prices Are Rising in 2022

Rental prices are rising in Seattle due to an increase in demand. As of October 03, 2022, the average rent for a 1-bedroom apartment in Seattle, WA is currently $2,009. This is an 18% increase compared to the previous year. The average monthly rent for a studio apartment in Seattle jumped by 1 percent to $2,009 during the last month. The average rent for a one-bedroom apartment remained flat.

  • Two-bedroom apartments in Seattle rent for $2,799 a month on average which is a 22% increase from last year.
  • Three-bedroom apartment rents average $3,495 which is a 13% increase from last year.
  • Four-bedroom apartment rents average $4,000 which is a 0% increase from last year.

Only 15% of the apartments can be rented for less than $1500, and more than 50% of the apartments are priced at more than $2,000 per month. This shows that overall rent prices are very high in Seattle and a huge drop in rent prices can help new renters to lock in a long-term lease.

These are some of the most affordable neighborhoods where the rent prices are below the Seattle average rent:

  • Innis Arden
  • Richmond Beach
  • The Highlands
  • Broadway

The Zumper Seattle Metro Area Report analyzed active listings last month across 6 metro cities to show the most and least expensive cities and cities with the fastest growing rents. The Washington one-bedroom median rent was $1,566 last month. Bellevue was the most expensive city with one-bedrooms priced at $2,510 while Renton was the most affordable city with one-bedrooms priced at $1,720.

Here are the best areas to invest in a rental property in the Seattle Metro Area in 2022. Investors should consider the suburbs of major metropolitan areas for residential rental opportunities, as they're an ideal investment and have seen an increase in buyer demand in this pandemic.

The cities should be within driving distance of major cities or metro areas. Locations with growing employment opportunities attract more tenants. Most importantly, vet the local neighborhoods thoroughly — their livability, vacancy rate, average rents,  quality of the local schools, and amenities such as parks, restaurants, gyms, and movie theaters.

The Cities With Fastest Growing Rents in Seattle Metro (Y/Y%)

  • had the fastest growing rent, up 35.5% since this time last year.
  • Seattle saw rent climb 21.2%, making it second.
  • Bellevue was third with rent jumping 13.6%.

The Cities With Fastest Growing Rents in Seattle Metro (M/M%)

  • Seattle had the largest monthly rental growth rate, up 1.5%.
Seattle Rental Market
Source: Zumper

Seattle's Large Student Market Is Great For Rental Property Investment

While we cannot say this just about the Seattle housing market, the fact remains that large cities with a strong network of educational institutions always create an opportunity for those who want to own rental properties. Students don’t buy houses – they rent. A college town with a single university sees property values rise and fall relative to the popularity of the university. Seattle’s nearly two dozen four-year colleges provide a diverse market for landlords catering to students, while the strong local job market means you can rent the property out to locals if the students move out.

Seattle Is Friendly To Foreign Real Estate Buyers

The United States is pretty friendly to foreign real estate buyers. Canada has limited the ability of foreign buyers to buy up properties in Canada, a major reason why Vancouver became one of the most overvalued real estate markets in the world. This has led many Chinese investors to buy up Seattle real estate instead, making the city the third destination for foreign real estate investors.

Some hope to send kids to study in the U.S., while a few have children here. Others buy the properties as a way to park money overseas in a relatively low tax jurisdiction with likely returns if they choose to sell later. Since foreign buyers don’t always rent the properties out, this drives up prices in the Seattle real estate market while indirectly constricting supply.

The Seattle Housing Market Is Landlord Friendly

Many investors are reluctant to buy properties in liberal markets because they’re afraid they won’t be able to protect their investment. However, there are several points in favor of Seattle, especially in comparison to Oregon and California. Washington State outlawed rent control, so you can raise rents to keep up with inflation and demand.

If a tenant breaks the lease without the landlord’s consent, the tenant is liable for rent through the end of the lease. Landlords have significant freedom in their screening questions. If a tenant has a month-to-month lease, the landlord can only end it for one of 18 approved reasons, but they can end it with a written notice three weeks before the end of the month.

Is Buying a House in Seattle a Good Investment?

Seattle has long been second to Silicon Valley, but its strong economy, diverse population, and better regulatory climate are bringing refugees from California and migrants from around the country and world to live here. Regardless of the area’s weather, the Seattle housing market’s outlook can only be described as sunny.

Good cash flow from Seattle investment property 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 Seattle in a growing neighborhood would be key to your success.

The three most important factors when buying real estate anywhere are location, location, and location. The location creates desirability. Desirability brings demand. You should focus on neighborhoods with relatively high population density and employment growth. Both of them translate into high demand for housing. There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your Seattle rental property and you should be able to get a good return on your investment over the long term.

The neighborhoods in Seattle must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools, and shopping malls. A cheaper neighborhood in Seattle might not be the best place to live in. A cheaper neighborhood should be determined by these factors – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio. It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals in Class A neighborhoods. The inventory is low, but opportunities are there.

There are 75 neighborhoods in Seattle. Some of the other popular neighborhoods in Seattle where you can invest in Seattle investment properties are Maple Leaf, Central District, Phinney Ridge, Ballard, Columbia City, Belltown, Beacon Hill, Green Lake, West Seattle, Wallingford, Madison Park, Queen Anne, Magnolia, and Northgate.

Here are some of the best neighborhoods in the Seattle metro area where you can buy a house or an investment property.

North Redmond is in King County and is one of the best places to live in Washington. According to Niche.com, living in North Redmond offers residents a sparse urban feel and most residents own their homes. In North Redmond, there are a lot of restaurants, coffee shops, and parks. Many families live in North Redmond and residents tend to lean liberal. The public schools in North Redmond are highly rated. The typical value of homes in North Redmond is $1,809,188, up 32.6% over the past year.

North Delridge is quite an affordable neighborhood in Seattle. It lies in King County and is one of the best places to live in Washington. According to Niche.com, living in North Delridge offers residents an urban-suburban mixed feel. The area is known for its lush natural beauty and abundant opportunities for outdoor recreation. The public schools in North Delridge are highly rated. The typical home value in North Delridge is $670,846. North Delridge home values have gone up 8.6% over the past year. About 48% of the residents like to rent a home.

Capitol Hill is a densely populated residential district in Seattle (Not be confused by Capitol Hill, Washington D.C.). It is located east of the city's Downtown on the other side of Interstate 5. Capitol Hill is the 9th most walkable neighborhood in Seattle with a Walk Score of 91 and is bikeable. It is one of the city's most popular nightlife and entertainment districts. Made up of a few smaller neighborhoods, rents in Capitol Hill average around $1,900 a month. The community is made up of young professionals, singles, and families with kids. This neighborhood exists alongside 536 submarkets in the greater Seattle market.

According to Redfin.com, the Capitol Hill housing market is somewhat competitive. In October 2021, Capitol Hill home prices were up 18.2% compared to last year, selling for a median price of $780K. On average, homes in Capitol Hill sell after 7 days on the market compared to 20 days last year. There were 37 homes sold in October this year, up from 32 last year.

On Apartmenthomeliving.com, the pricing for Studio Apartments in Capitol Hill currently ranges from $675 to $8,049 with an average price of $3,228. On average rent for a studio apartment in this residential neighborhood is $1,768, and has a range from $675 to $3,945. One-bedroom apartments average $2,350 and range from $770 to $3,980. A 2 bedroom apartments averages $3,350 and ranges from $1,192 to $4,995. Three-bedroom apartments average $5,392 and range from $2,650 to $8,049.

Highland Park is a neighborhood in King County. Living in Highland Park offers residents an urban-suburban mix feel and most residents rent their homes. The public schools in Highland Park are above average. The median home value in Highland Park is $651,903. Highland Park home values have gone up 13.8% over the past year. According to RentCafe, the average rent in Highland Park, Seattle, WA is $1,711. Highland Park rent is 21% lower than Seattle's average rent. The price range for a studio apartment in Highland Park, Seattle, WA is between $1,850 and $2,299. The price range for a 1-bedroom apartment in Highland Park, Seattle, WA is between $1,850 and $2,299.

South Hollywood Hill is in King County and is one of the best places to live in Washington. According to Niche.com, living in South Hollywood Hill offers residents a sparse urban feel and most residents own their homes. In South Hollywood Hill there are a lot of restaurants, coffee shops, and parks. The public schools in South Hollywood Hill are highly rated.

Sammamish Plateau also lies in King County. It is an upscale, picturesque suburb situated between Lake Sammamish and the Snoqualmie Valley. The market in the Seattle suburb of Sammamish is currently very hot. Living here offers residents a sparse suburban feel. The typical home value in Sammamish is $1,372,491, up 28.3% over the past year.

Sammamish Plateau is consistently ranked among the best places to live in the state and the country. The public schools in Sammamish Plateau are highly rated. According to Apartments.com, the average rent in Sammamish is $1,976. When you rent an apartment in Sammamish, you can expect to pay as little as $1,678 or as much as $2,517, depending on the location and the size of the apartment. The average rent for a studio apartment in Sammamish, WA is $1,678 while the average rent for a two-bedroom apartment in Sammamish, WA is $2,467.

The ten neighborhoods in Seattle have the highest real estate appreciation rates since 2000—List by Neigborhoodscout.com.

  1. Yesler Terrace West
  2. Belltown Northeast
  3. Belltown East
  4. Central Waterfront
  5. Belltown Southeast
  6. First Hill East
  7. International District
  8. Belltown
  9. First Hill
  10. University of Washington Seattle Campus

Apart from the Seattle real estate market, you can also invest in another hot market in Spokane, WA. Spokane is a relatively cheap real estate market on the West Coast. It is already seeing increased demand and property valuations, while it remains a safe place to invest in real estate. Skip Seattle and Silicon Valley and invest in the future growth of Spokane. One reason why Spokane long lagged behind Seattle was its higher unemployment rate.

Seattle has a roughly 3% unemployment rate, significantly lower than the 5% unemployment rate seen in Spokane. Spokane’s economy, though, is seeing a surge in higher-wage jobs. Out of the tens of thousands of new jobs created since 2010, the majority of them pay more than the average county wage – which is in line with the national average. The promise of better pay will lure many people to Spokane to live, fueling demand for the Spokane housing market.

The next one is the Tacoma real estate market. It is the second-largest city in a state that is often a better choice for investors than the largest city since demand is strong but not so great that investors worry about being priced out of the market or being caught up in a bubble. Tacoma is the third-largest city in Washington state.

Rents and property values in the Tacoma area are rising due to increased demand and constrained supply. This is an ideal time to buy. Roughly speaking, the median house in the Tacoma area is now the same price as the typical house in King County in 2012. Furthermore, there are many reasons to consider investing in Tacoma real estate over homes and condominiums in nearby housing markets.

Then comes the Walla housing market which includes two suburbs, encompassing more than fifty thousand people. The area has become the hub of Washington State’s wine country, though wheat remains a major contributor to the local agricultural economy. Walla Walla is one of the real estate markets in the state that doesn’t depend on Seattle’s growth for appreciation. Walla Walla sits on the Washington-Oregon state line. The Walla Walla housing market is poised for steady price growth. The median home value in Walla Walla is $278,247 and home values have gone up 4.4% over the past year.

For a majority of investors, buying or selling real estate 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.

Is Seattle a Good Place to Invest in Real Estate?
  • Seattle is home to over 700,000 people.
  • This makes the Seattle housing market the largest in both the state of Washington and the Pacific Northwest.
  • However, the region's housing market is bigger than that.
  • It extends to nearly four million people in the Seattle metropolitan area.
  • Since, 2010, Seattle's population growth has increased by 18.7%.
  • This is the fastest among the 50 largest cities in the U.S (Census.gov).
  • Seattle's real estate market has always been strong.
  • Tech companies bring so many people into the city, and construction hasn't been able to keep up with that.
  • The Seattle-area job market continues to add new qualified buyers.
  • It is coupled with declining inventories & falling interest rates which leads to multiple offers and bidding wars among buyers.
  • This is the single driving factor of Seattle home prices.
  • A positive forecast for home values in the next twelve months – 5-10% appreciation is expected.
  • The BLS reported that the unemployment rate for Seattle fell 0.2 percentage points in April 2022 to 3.4%.
  • For the same month, the metro unemployment rate was 0.7 percentage points lower than the Washington rate.
  • The unemployment rate in Seattle peaked in April 2020 at 17.3% and is now 13.9 percentage points lower.
  • Future job growth over the next ten years is predicted to be 43.8%, which is higher than the US average of 33.5% (bestplaces.net).

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

Caveat emptor applies anywhere you buy property. Some of this article's information came from referenced websites. Norada Real Estate Investments provides no explicit or implied claims, warranties, or guarantees that the material is accurate, trustworthy, or current. All information should be validated using the below references. Norada Real Estate Investments does not predict the future US housing market.

REFERENCES

Why Invest In Seattle
https://www.collegesimply.com/colleges/washington/seattle/four-year-colleges
https://www.naahq.org/read/industry-insider/6-28-16/america-becoming-renters-nation
http://www.homebuyinginstitute.com/news/will-seattle-start-rising-again
https://www.geekwire.com/2018/amazon-responsible-seattles-housing-cooldown-real-estate-experts-weigh
https://www.cnbc.com/2018/08/02/seattle-housing-market-is-under-pressure-as-chinese-buying-dries-up.html
https://seattlebubble.com/blog/2019/03/27/case-shiller-seattle-home-price-gains-below-average-in-january
https://www.bizjournals.com/losangeles/news/2016/08/12/california-regulatory-policies-businesses-flee.html
https://www.linkedin.com/pulse/seattle-san-francisco-why-west-coast-tech-companies-both-shanahan
https://www.theurbanist.org/2014/09/02/85-foot-and-125-foot-height-limits-are-a-missed-opportunity
https://www.seattletimes.com/seattle-news/politics/seattle-approves-taller-buildings-in-uptown-doubling-heights-in-some-areas
https://www.seattlemag.com/news-and-features/seattle-housing-experiences-high-demands-tech-companies-continue-grow
https://www.thestranger.com/slog/2018/01/09/25692670/seattle-is-now-number-three-us-city-for-foreign-real-estate-investors
https://www.thestranger.com/news/feature/2016/01/27/23480634/what-you-need-to-know-about-your-rights-as-a-renter-in-seattle

Neighborhoods info & rent prices
https://www.apartments.com/
https://www.apartmenthomeliving.com/seattle/
https://www.niche.com/places-to-live/search/best-neighborhoods-to-buy-a-house/m/seattle-metro-area/

Market Prices, Trends & Forecasts
https://www.nwmls.com/
https://www.zillow.com/seattle-wa/home-values
https://www.redfin.com/news/seattle-homes-sold-above-list-price/
https://www.realtor.com/realestateandhomes-search/Seattle_WA/overview
https://www.rentcafe.com/average-rent-market-trends/us/wa/seattle
https://www.neighborhoodscout.com/wa/seattle/real-estate
https://www.littlebighomes.com/real-estate-seattle.html
https://seattlerealestatenews.com/category/info/seattle-monthly-housing-news
https://www.seattlepi.com/coronavirus/article/best-time-to-buy-or-sell-a-house-during-pandemic-15287608.php

Is San Diego Real Estate a Good Investment?

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San Diego Real Estate Investment Outlook

Should you consider San Diego real estate investment? You need to drill deeper into local trends if you want to know what the market holds for real estate investors and buyers in 2022 and 2023. Although this article alone is not a comprehensive source to make a final investment decision for San Diego, let’s look at the state of the San Diego real estate market and the factors driving the property market short and long-term.

Affordability has become an issue for many homebuyers in the San Diego area. This is another housing market trend that is affecting many major cities across the country but particularly in the western coastal markets. How big is the San Diego housing market? San Diego is a moderately walkable city in San Diego County with a population of approximately 1,305,700 people.

It is the second biggest California city and one of the ten biggest cities in the country. San Diego is one of the fastest-growing cities in the U.S, and its economy is strong. San Diego is often overlooked in favor of hotter real estate markets like San Francisco and Los Angeles. However, that’s one of the reasons why you should consider investing in the San Diego real estate market. The city of San Diego continues to outpace California's job recovery, which is good news for San Diego’s housing industry.

The San Diego metropolitan area is known as the birthplace of naval aviation, serving as a major employment center in the nation for defense and in the Southern California region for scientific research, health care, education, trade, and tourism. The significant military presence supports hundreds of thousands of jobs, pays billions of dollars in wages, and has an overall annual economic impact on the San Diego metropolitan area of billions of dollars.

San Diego's housing market remains one of the hottest in the nation (ranked 10th by Zillow). Since home building takes time, especially in a heavily regulated environment, there’s little chance of diminished demand. San Diego has been one of the hottest real estate markets in the country for many years. During the 20 years from 1998 to 2018, the median home value in San Diego rose by a whopping 217%. But the median household income only rose by around 77% during that same 20-year time frame.

San Diego has a mixture of owner-occupied and renter-occupied housing. As per Neigborhoodscout.com, a real estate data provider, one and two-bedroom single-family detached are the most common housing units in San Diego. Other housing types prevalent in San Diego include large apartment complexes, duplexes, rowhouses, and homes converted to apartments.

There were 4,100 single-family homes and 6,400 multi-family homes built in 2017, compared to 2,200 single-family homes and 7,800 multi-family units in 2016. Today, the general trend for SFR construction in San Diego County is still far below the 2002-2004 numbers. The next peak in single-family residential construction will likely begin around 2021, but it is doubtful to return to the frenzied mortgage-driven numbers seen during the Millennium Boom.

San Diego Real Estate Appreciation Rates

San Diego is in the top 20% nationally for real estate appreciation. NeighborhoodScout.com's data also shows that in the past ten years, San Diego real estate appreciated by 115.52%. This amounts to an annual real estate appreciation of 7.98%. During the latest twelve months, San Diego's appreciation rate has been around 16.35%.

In the latest quarter, the appreciation rate has been 2.79%, which annualizes to a rate of 11.64%. Overall, there exists a limited supply of homes in San Diego, and buyers are forced to compete often resulting in higher prices and/or quicker sales that tend to benefit sellers.

The San Diego Housing Market Is a Relative Bargain

California is known for its insane real estate prices. San Diego stands out as a relatively affordable real estate market. The median home price is around $550,000. This sounds bad if you compare it to the national average of $300,000, but it is a bargain in California. You could snap up several San Diego rental properties for the price of one home in San Francisco.

The San Diego housing market is cooling. Home price appreciation fell below 5%, and home prices in some areas are declining due to decreasing demand. This is an improvement over the 6 to 8% appreciation San Diego had been seeing. The expanding inventory of houses on the market makes this a great time to invest in the San Diego housing market.

San Diego's Housing Supply Is Constrained As New Construction of Homes is Quite Slow

San Diego is a growing housing market. By 2050, the population of San Diego County is expected to grow to 4.5 million, approximately a 50% increase from the population in early 2007 of 3,098,269 people. Population trends have connections with housing trends as it increases the demand for housing supply. However, construction in San Diego has stalled. Single-family residential construction is well below the demand for such homes in the San Diego housing market.

There has been faster growth in the construction of multi-family housing in the San Diego real estate market, but that is also below historic rates. Currently, both single-family and multi-family housing construction is increasing in San Diego. Even though there are more multi-family starts over single-family homes in terms of raw numbers, the percentage of single-family homes being constructed outpaces that of multi-family units.

San Diego also shares several geographic constraints that other California coastal cities do. You can’t build on water. The Cowles Mountains limit how much the city can expand inland, constraining the housing supply. Regulations limit high-density construction, preventing the area from meeting demand with too many tall condo towers. So, do the wilderness areas off-limits to construction like Cuyamaca Rancho State Park and Cleveland National Forest.

The Diverse Student Market Feeds the San Diego Rental Market

San Diego is a major metropolitan area, and it is home to several colleges and universities. The University of California at San Diego is one of the largest. It is sometimes confused with San Diego State University, a different campus, and the University of San Diego. Point Loma Nazarene University is a Christian school in San Diego. National University is located in nearby La Jolla.

Smaller schools like the Art Institute, Alliant International University, Azusa Pacific University, Brandman University, Miramar College, Mesa College, and California College of San Diego fill out the San Diego real estate market.

A side benefit of the diversified student market is that you can buy multiple properties across the San Diego housing market and enjoy a “diverse” investment portfolio. You won’t see demand for the property rise and fall based on the popularity of a flagship school, and the strong San Diego housing market allows you to rent it to newcomers to the area or military officers if you can’t fill the unit with students.

San Diego’s economy isn’t as reliant on tourism as other coastal towns. Instead, defense and the military are a larger part of the local economy. This dumps tens of thousands of renters into the San Diego real estate market who will never buy because they could be deployed elsewhere in a year or two. The military also gives generous allowances for those who rent San Diego rental properties, keeping rents near the military base strong regardless of the state of the economy.

The San Diego real estate market has been ranked among the ten most expensive real estate markets in the country, though it ranks below several other West Coast cities. This creates massive demand for San Diego rental properties by those who simply cannot afford to buy homes. The rental market will continue to grow as the city grows an estimated 500,000 population by 2050, adding tens of thousands each year. The median rent in San Diego is $2700. The rent you’d receive on single-family San Diego rental properties would, of course, be much higher.

If you find a good bargain and make it family-friendly, you could charge well over $3000 a month. If you can convert San Diego rental properties into smaller units, you’d receive around $2200 a month for a one or two-bedroom apartment. The cash on cash returns for properties in the San Diego housing market is around 2.5% for traditional rental properties and nearly 2% if you rent on Airbnb. The fact that the city isn’t too dependent on tourism means you could rent properties on the beach to newcomers, locals, and students if tourism is slow.

Before the pandemic, the average rent for an apartment in San Diego had been growing at 4% year-over-year (source: RentCafe). About 40% of the apartments can be rented for less than $2000, and 60% of the apartments can be rented for more than $2,000 per month. This shows that rent prices are very high in San Diego.

Homeowners vs Renters Statistics: According to the most recent 2020 American Community Survey census data, San Diego County has a renter percentage of 46.7% which is the second most renter percentage of all the counties in the greater San Diego County region. The homeowner percentage is 53.3%. The monthly cost of ownership for property owners in San Deigo is around $2,073.

The median gross rent is $1,658, which is the third most expensive among all other counties in the greater San Diego County region. Comparing rental rates to the United States average of $1,062, San Diego County is 56.1% larger. Also, compared to the state of California ($1,503), San Diego County is 10.3% larger.

San Diego Rent Prices 2022

As of October 3, 2022, the average rent for a 1-bedroom apartment in San Diego, CA is $2,545. This is a 21% increase compared to the previous year. Over the past month, the average rent for a studio apartment in San Diego remained flat. The average rent for a 1-bedroom apartment decreased by -5% to $2,545, and the average rent for a 2-bedroom apartment decreased by -5% to $3,295.

  • Two-bedroom apartment rents average $3,295 which is an 18% increase from last year.
  • Three-bedroom apartment rents average $4,070 which is a 13% increase from last year.
  • Four-bedroom apartment rents average $4,900 which is a 9% increase from last year.

San Diego Housing Market Is More Landlord Friendly For Short Term Rentals

We can’t say that California is landlord-friendly. However, specific cities are better for landlords and real estate investors than others. One reason to invest in the San Diego housing market over San Francisco or Los Angeles is the fact that San Diego is one of the few big cities that doesn’t have rent control. The city has groups fighting proposals to apply rent control to San Diego rental properties in addition to apartments.

San Diego has many tourist attractions. Balboa Park is home to the San Diego Zoo, the Air and Space Museum, the Natural History Museum, the Desert Garden, the local youth Symphony, a Japanese garden, and a golf complex. There’s a SeaWorld in San Diego, an MLB stadium, the USS Midway Museum, and the San Diego zoo safari park. On top of this is the mild weather and proximity to the beach. Any San Diego rental properties in easy reach of these attractions command a premium on rental sites like Airbnb.

Demand for rentals in the San Diego real estate market soars during Comic-Con, one of the biggest comic conventions in the country. The only limit on San Diego rental properties has been the fluctuating rules by the city council, such as a measure passed limiting rentals to primary residences that were rescinded a few months later in 2018. Yet permission for rentals is limited in many master-planned communities and condo developments, keeping rents for Airbnb and other short-term rentals strong.

San Diego Is A Great Place Place To Live In

San Diego is a great place to live which makes real estate investment a lucrative opportunity. It has nice sunny weather and impressive beaches. It has more than 300 parks, including Mission Trails Regional Park, and 40,000 acres of undeveloped open space. Balboa Park has the world-famous San Diego Zoo, Old Globe Theatre, and museums. San Diego Zoo is also one of the prettiest zoos in the world to walk around. U.S. News analyzed 125 metro areas in the United States to find the best places to live based on the quality of life and the job market in each metro area, as well as the value of living there and people's desire to live there.

San Diego, California was ranked:

  • #36 in Best Places to Live
  • #51 in Best Places to Retire
  • #3 in Best Places to Live in California
  • #5 in Most Expensive Places to Live
  • #9 in Best Places to Live for Quality of Life
  • #12 in Safest Places to Live

San Diego is home attracts millennials with its higher education opportunities and big-city amenities such as excellent restaurants, dive bars or clubs, and great nightlife. The craft beer scene in San Diego is one of the best in the world. North County is desirable for young families whereas millennials are moving downtown and to communities to the northeast as a result of gentrification and the diverse entertainment options centralized in those areas.

Best Places to Invest in Real Estate in San Diego

Are you looking for an investment property in the San Diego real estate market? In any property investment, cash flow is gold. San Diego offers an ideal mix of limited supply, high demand, and excellent income potential. San Diego's mild climate, miles of beaches, fun attractions, and great schools make the city one of America's best places to live.

If you’re going to invest in California, it needs to be in San Diego. Good cash flow from San Diego investment properties means the investment is, needless to say, profitable. On the other hand, a bad cash flow means you won’t have money on hand to repay your debt.

Therefore, finding the best investment property in San Diego in a growing neighborhood would be key to your success. The three most important factors when buying real estate anywhere are location, location, and location. The location creates desirability. Desirability brings demand. You should focus on neighborhoods with relatively high population density and employment growth.

Both of them translate into high demand for housing. There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your San Diego rental property and you should be able to get a good return on your investment over the long term.

The neighborhoods in San Diego must be safe to live in and should have a low crime rate. The neighborhoods should be close to basic amenities, public services, schools, and shopping malls. A cheaper neighborhood in San Diego might not be the best place to live in.

A cheaper neighborhood should be determined by these factors – Overall Cost Of Living, Rent To Income Ratio, and Median Home Value To Income Ratio. It depends on how much you are looking to spend and if you are wanting smaller investment properties or larger deals in Class A neighborhoods. The inventory is low, but opportunities are there.

Some of the popular neighborhoods in or around San Diego are Carmel Valley, Rancho Bernardo, Point Loma, Pacific Beach, Mission Valley, Mira Mesa, Rancho Penasquitos, Bonita, Del Cerro, North Park, La Jolla, 4s Ranch, Mission Hills, Otay Ranch and Rancho Santa Fe.

As we write this, the asking price of single-family homes for sale in San Diego (on Realtor.com) starts from $132,000 for a 3-bedroom house and can go up to $37M for a luxury 10-bedroom house located in the Northern San Diego neighborhood.

You can get a beautiful 3-bedroom new construction single-family house for around $379,000 in the Southern San Diego neighborhood — which is quite an affordable entry price as San Deigo home prices are some of the most expensive in all of the United States.

Here are some of the best neighborhoods in San Diego where you can buy an investment property.

Encanto is one of San Diego’s most affordable neighborhoods if you want to buy an investment property. According to Neighborhood Scout Encanto’s median real estate price is $469,345, which is cheaper than 71.3% of California neighborhoods and 21.5% of all U.S. neighborhoods. Encanto is a hilly neighborhood located in the southeastern part of San Diego, California. The neighborhood of Encanto is split into two sections, North Encanto (which lies north of Broadway), and South Encanto (which lies south of Broadway).

The name Encanto usually refers to the neighborhood of Encanto, but it can also refer collectively to the neighborhoods of the Chollas Valley planning area, which consists of Chollas View, O'Farrell, Lincoln Park, Emerald Hills, Valencia Park, Broadway Heights, Alta Vista, Rosemont, as well as Encanto. The citizens' community planning group that represents these eight neighborhoods in accordance with the City of San Diego Council Policy 600-24 is named the Chollas Valley Community Planning Group.

The Encanto Neighborhoods Community Plan is designed to expand the existing retail, commercial and light industrial areas along the main transportation corridors and the villages surrounding the trolley stops at 47th and Market streets, and Euclid Avenue and Market Street. Its cultural heart is the Market Street Village, situated along Chollas Creek, and the trolley stop at the intersection of Euclid Avenue and Market Street.

With its proximity to San Diego Bay just 2 1/2 to 5 miles away, temperatures tend to be mild. The area offers excellent opportunities for infill development, including commercial, transit-oriented mixed-use along the main corridors, and view lots for single-family residential in the surrounding hills.

Nestor is another relatively affordable neighborhood in San Deigo having a median real estate price of $579,106, which is more expensive than 42.9% of the neighborhoods in California and 84.6% of the neighborhoods in the U.S. The average rental price in Nestor is currently $1,881, based on NeighborhoodScout's exclusive analysis. Rents here are currently lower in price than 77.6% of California neighborhoods. Nestor is a residential neighborhood in the southern section of San Diego, and part of the Otay Mesa-Nestor community planning area. According to Zillow, Nestor's home values have gone up 29.4% over the past year.

It neighbors Palm City and Otay Mesa West to the east, Egger Highlands to the north, San Ysidro to the southeast, and the Tijuana River Valley to the south. Major thoroughfares include Coronado Avenue, Saturn Boulevard, Hollister Street, and Tocayo Avenue. According to Areavibes.com, the cost of living in Nestor is 19% lower than the San Diego average and 13% higher than the national average. On their livability index, it ranks better than 42% of areas in San Diego.

The Otay Mesa-Nestor community planning area is located in the southern region of the City and is bounded on the north by Chula Vista, on the east by the community of Otay Mesa, on the south by the Tijuana River Valley and the San Ysidro community, and on the west by Imperial Beach. Twenty percent of the planning area consists of schools, parks, transit, and other public facilities, while vacant, undeveloped, agricultural, and mineral extraction and processing uses comprise the remaining 15 percent.

Emerald Hills is a fairly good neighborhood in San Diego to invest in real estate. It is a calm neighborhood with many green spaces nearby for residents to visit. Most areas in this neighborhood are quiet, as noise from the streets and other parts of the city is rarely an issue. It is bordered by Oak Park and California State Route 94 on the north, Chollas View and Euclid Avenue on the west, Encanto on the east, and Valencia Park and Market Street on the south. Major thoroughfares include Kelton Road and Roswell Street.

Most houses for sale in this neighborhood are located in places that are not very suitable for walking since carrying out daily needs is sometimes difficult. The typical home value in Emerald Hills is $659,983, up 33.0% over the past year.

Another urban area that is great for investment is the Downtown/City Center. It is one of the best places to live in California. It offers residents a dense urban feel and more than 70% of the residents rent their homes. So it is a great neighborhood to buy rental properties due to high demand. Downtown's public schools are above average. It offers good nightlife with restaurants, bars, and entertainment venues. Niche.com ranks it #25 among the best neighborhoods to live in San Diego.

Highest Growing San Diego Neighborhoods Since 2000 (List by Neighborhoodscout.com)

  1. Mountain View Southeast
  2. Logan Heights West
  3. Logan Heights
  4. Barrio Logan
  5. Golden Hill South
  6. Grant Hill West
  7. East Village
  8. Sherman Heights
  9. Mountain View East
  10. Barrio Logan East

The cheapest or most affordable neighborhoods to rent in San Diego are Alta Vista, where the average rent goes for $1100/month, Broadway Heights, where renters pay $1100/mo on average, and Emerald Hills, where the average rent goes for $1100/mo, Encanto, where renters pay $1100/mo on average $1,383, Jamacha Lomita with an average rent of $1100, and Skyline, where the average rent price is 1100. In all of these areas, the asking prices are below the average San Diego rent.

San Diego Rental Market
Graph Credits: RentCafe.com

Apart from San Deigo, you can also invest in several other real estate markets in California. California has the 6th largest economy in the entire world. This is largely driven by its innovative production, the heavy tech sectors in the state, and more. Apart from the San Diego real estate market, you can also invest in another hot market in San Jose. San Jose is part of Silicon Valley, a place where $100,000 a year or higher salaries from competing tech firms have driven up the cost of real estate.

But what about the San Jose housing market itself? San Jose is the third-largest city in California, home to roughly a million people. It has the highest cost of living in any area in the U.S., and it is one of the most expensive housing markets in the country. If you want to invest in San Jose real estate, you may not need to buy and renovate. Instead, if you know of industrial or commercial properties near major employers they may need to convert to employee housing, which you could buy now and hold until it sells.

If that doesn’t happen, you could still turn it into a co-working space. In January 2018, Redfin ranked the ten hottest neighborhoods in the United States. Nine of the ten were in San Jose. When single home prices fall from 1.2 million to 1 million, homes now sit on the market for several days instead of being snapped up immediately.

The other good place for real estate investment in California is Sacramento. Sacramento is an island of sanity in an overpriced, over-regulated, and overheated West Coast housing market. It reflects the California ideal that most of the state has lost, and that’s we recommend it to investors over the “hotter” California metro areas. These are the same factors causing many Californians themselves to vote with their feet and move here instead of moving out of the state altogether.

If you’re considering Sacramento real estate investment, the diverse rental market is a definite plus. Being a state capital, it is home to several universities. This allows you to rent to the relatively large student market in addition to the local population. There is, of course, the University of California campus in Sacramento, but you could own investment properties by American River College and other, smaller schools in the area, too.

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 properties.

Not just limited to San Diego or California but you can also invest in some of the best real estate markets in the United States. All you have to do is fill up this form and schedule a consultation at your convenience with our team to see if San Diego makes sense as a place to invest today.

We can help build you a custom portfolio of turnkey properties located in some of the best markets in the United States. By researching and structuring complete turnkey real estate investments, we can help you succeed by minimizing risk and maximizing profitability.

Sources:

  • https://car.sharefile.com/share/view/s2a8899fc081428a8
  • https://journal.firsttuesday.us/san-diego-housing-indicators-2/29246
  • https://www.rentcafe.com/average-rent-market-trends/us/ca/san-diego
  • http://worldpopulationreview.com/us-cities/san-diego-population
  • https://www.sandiegouniontribune.com/business/real-estate/sd-fi-rent-control-20180703-story.html
  • https://www.mashvisor.com/blog/airbnb-san-diego
  • https://www.sandiegoreader.com/news/2018/mar/07/city-lights-airbnb-forcing-you-out
    https://www.niche.com/colleges/search/best-colleges/m/san-diego-metro-area
  • http://worldpopulationreview.com/us-cities/san-diego-population
  • https://www.sandiego.org/articles/east-county/san-diego-east-mountains.aspx
  • https://www.cnbc.com/2019/02/27/spring-housing-market-could-be-coolest-in-recent-years-realtorcom.html
  • https://www.sandiegouniontribune.com/business/real-estate/sd-fi-corelogic-home-20180724-story.html
  • https://www.sandiegouniontribune.com/business/tourism/sd-fi-airbnb-regulations-council-20181022-story.html
  • https://www.10news.com/news/making-it-in-san-diego/making-it-in-san-diego-slowing-housing-market-could-create-buying-opportunity

Cleveland Housing Market: Prices | Trends | Forecasts 2022

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If you are looking at buying a house in Cleveland you must read till the end. Cleveland is often looked at as a has-been market. However, its turnaround has created several opportunities for investors and residents alike. The Cleveland housing market is rebounding. All indicators point to growing income, a solid job market, and increasing home values in Ohio. The Cleveland real estate market prediction is positive — investors and home buyers will reap benefits when considering the city and its suburbs over the next few years.

In October 2021, the median list price of homes in Cleveland, OH was $117K, trending up 6.4% year-over-year. The median listing price per square foot was $78. The median sale price was $127,500. Homes in Cleveland, OH sold for approximately the asking price on average. On average, homes in Cleveland, OH sell after 57 days on the market (source: Realtor.com), The median listing price in Cleveland-Elyria, Ohio was $190,000, down -5.0% year-over-year. New listings were up 0.9%. 24.3% of homes Cleveland-Elyria housing market had a price reduction in October.

Cleveland Housing Prices, Trends, and Forecasts 2021-2022

The FHFA provides a measure of typical price inflation for houses within the United States for the state, national, and Metropolitan Statistical Areas. FHFA releases HPI data and reports on a quarterly and monthly basis. Cleveland–Elyria Metropolitan Statistical Area (MSA) is ranked #47 in the FHFA HPI® Top 100 Metro Area Rankings based on house price change in 2021 Q2. In Cleveland–Elyria house prices rose 17.6% over the past year and rose 5.7% over the last quarter. The Cumulative change in the Cleveland house price index since 2007 has been +40.7%.

Data by Redfin, a real estate company, shows that the Cleveland housing market is somewhat competitive. Homes in Cleveland receive 2 offers on average and sell in around 29 days. In October 2021, Cleveland's home prices were up 7.5% compared to last year, selling for a median price of $122K. On average, homes in Cleveland sell after 33 days on the market compared to 30 days last year. There were 422 homes sold in October this year, up from 407 last year.

Cuyahoga County is located in the northeastern part of the U.S. state of Ohio. It is making it the second-most-populous county in the state. The county seat and largest city is Cleveland. Here's the August 2021 Market Report for Cuyahoga County released by the Akron Cleveland Association of REALTORS®. Cleveland is a seller's real estate market. Months Supply of Inventory is 1.3 months. It refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace. Six months of supply has historically been associated with moderate price appreciation, while a lower level of months' supply tends to accelerate price increases.

  • Total homes sold in Cuyahoga County were 1,728, up 2.4% from 2020.
  • In August 2021, the median sales price in Cuyahoga County was $194,250.
  • The average sales price was $240,326.
  • Homes are typically seeing offers accepted faster than a year ago.
  • The median days on market is 38 days.
  • New listings were up 3.1% compared to 2020.
  • Active listings were down 8% compared to 2020.

Cleveland Rental Market Trends

Cleveland has a mixture of owner-occupied and renter-occupied housing. The average rent for a 1-bedroom apartment in Cleveland, OH is currently $1,350. This is a 13% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Cleveland decreased by -13% to $850. The average rent for a 1-bedroom apartment decreased by -3% to $1,350, and the average rent for a 2-bedroom apartment decreased by -7% to $1,395.

  • The average rent for a 2-bedroom apartment in Cleveland, OH is currently $1,395. This is a 1% increase compared to the previous year.
  • The average rent for a 3-bedroom apartment in Cleveland, OH is currently $1,100. Compared to last year, the average rent price has remained flat.
  • The average rent for a 4-bedroom apartment in Cleveland, OH is currently $1,200. This is a 26% increase compared to the previous year.
  • The most expensive neighborhoods in Cleveland are Glenville, Downtown Cleveland, Hough, Ohio City, and University.

Cleveland Real Estate Market Forecast 2021-2022

What are the Cleveland real estate market predictions for 2021 & 2022? Let us look at the price trends recorded by Zillow over the past few years. Cleveland has a record of being one of the best long-term real estate investments in the U.S. The Cleveland metropolitan area, or Greater Cleveland as it is more commonly known, is the metropolitan area surrounding the city of Cleveland in Northeast Ohio, United States. The five-county Cleveland–Elyria Metropolitan Statistical Area (MSA) consists of Cuyahoga County, Geauga County, Lake County, Lorain County, and Medina County, and has a population of over 2 million.

Since Nov 2011, the Cleveland–Elyria Metro home values have appreciated by nearly 64% — Zillow Home Value Index. ZHVI represents the whole housing stock and not just the homes that list or sell in a given month. The typical home value of homes in Greater Cleveland is currently $199,110. It indicates that 50 percent of all housing stock in the area is worth more than $199,110 and 50 percent is worth less (adjusting for seasonal fluctuations). The typical value of homes in Cleveland (City) is $98,093, up 25.1% over the past year.

In Oct 2020, the typical value of homes in Greater Cleveland was around $170,000. Home values have gone up 16.7% over the past year alone. Cleveland is a hot seller’s real estate market as there exists a limited supply of homes, and buyers are forced to compete often resulting in higher prices and/or quicker sales that tend to benefit sellers. In other words, the demand is exceeding the supply, giving sellers an advantage over buyers in price negotiations.

There are fewer homes for sale than there are active buyers in the marketplace. Also, in a balanced real estate market, it would take about six months for the supply to dwindle to zero. In terms of housing supply, the Cleveland market can tip to favor buyers if the supply increases to more than six months of inventory. And that's not going to happen soon.

The Cleveland real estate market remains strong to favor sellers, due to persistent imbalance in supply and demand. The real estate appreciation rate in Cleveland in the latest quarter was around 2.27%, which equates to an annual appreciation rate of 9.41%. Relative to Ohio, NeighborhoodScout's data shows that Tampa's latest annual appreciation rate is higher than 80% of the other cities and towns in Ohio. However, even small changes in the appreciation rate can change the long-term value of buying considerably.

Here is the housing forecast for Cleveland, Cuyahoga County, and Cleveland MSA. The home appreciation has been incredibly strong over the past year.

  • Cleveland–Elyria Metro home values have gone up 16.7% over the past year and Zillow predicts they will rise 13.6% over the next 12-months.
  • Cleveland home values have gone up 25.1% over the past year (current = $98,093) and will continue to rise over the next twelve months.
  • Cuyahoga County home values have gone up 18% over the past year (current = $180,919) and will continue to rise over the next twelve months.
  • Lorain County home values have gone up 15.2% over the past year (current = $195,979) and will continue to rise over the next twelve months.
  • Medina County home values have gone up 14.3% over the past year (current = $272,298) and will continue to rise over the next twelve months.
Cleveland Real Estate Market Forecast
Credits: Zillow

Cleveland Real Estate Investment Overview

Should you buy investment property in Cleveland? Looking for a home in Cleveland? These up-to-date Cleveland real estate statistics and trends will help you make smart investing decisions. You need to drill deeper into local trends if you want to know what the Cleveland market holds for the year ahead. We have already discussed the Cleveland housing market trends & forecasts for answers on why to put resources into this sizzling market. Cleveland is home to just under 400,000 people. The larger metropolitan area is home to roughly two million people.

That makes the Cleveland real estate market the 32nd largest in the country. If you include the Cleveland-Akron-Canton metro area, there are three and a half million people in the “combined statistical area”, making it the 15th largest metropolitan area in the United States. This century-old city was once a major manufacturing center. It is reinventing itself as a medical and BioMed hub. Home prices in Cleveland have been trending up 8.6% year-over-year.

As per the data from the real estate company called Neigborhoodscout.com, single-family detached homes are the single most common housing type in Cleveland, accounting for 46.56% of the city's housing units. Other types of housing that are prevalent in Cleveland include duplexes, homes converted to apartments or other small apartment buildings ( 26.01%), large apartment complexes or high-rise apartments ( 20.51%), and a few row houses and other attached homes ( 6.23%).

Just four miles from Downtown Cleveland, the University Circle has long been a diverse and appealing mix of single-family homes and apartments. This area of the city has the flavor of a quaint college campus. Given that area amenities are within walking distance, there is a lot of foot and bike traffic, which lends to its charm. The area is one of the largest employment centers in the entire state. People in Cleveland primarily live in small (one, two, or no bedroom) single-family detached homes.

Here are the top reasons to invest in Cleveland real estate.

  • Top 10 Job Market for New College Graduates (CNN)
  • Presence by 70% of Fortune 500 comp.
  • More than 400 bioscience companies.
  • Two new Amazon distribution centers.
  • Over 120,000 healthcare professionals.
  • Home to 27 area colleges & universities.
  • Home to four professional sports teams.

Positive Demographic Trends

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.

The Bright Future of Good Paying Research Jobs

Cleveland has invested in healthcare and bio-science business accelerators like Bio-Enterprise and the Global Center for Health Innovation. They expect institutions like this to lead to new healthcare advancements provided first in Cleveland and in the hope that discovered drugs and technology will be manufactured in Cleveland. Investors can find affordable investment properties for development and either sale or rental to people working at these facilities. In fact, Cleveland’s Health-Tech Corridor is a prime place for high-tech companies, while the Cleveland real estate market is booming around these businesses.

Downtown Brownfield Re-Development

Cleveland is intentionally redeveloping a number of brownfield industrial sites to create multi-use properties. For example, the Terminal Tower is being turned into a combination shopping and entertainment district. The Cleveland Gateway project is going to turn 65 acres into a densely populated urban neighborhood, mixing multi-family housing with trails, a marina, and an urban park. If you can’t invest directly in this redevelopment project, note that single-family and multifamily housing stock around the new units will go up in value as new infrastructure is built.

Significant redevelopment is occurring along the thoroughfare running from East 55th Street to East 105th Street. Given that it is right off Interstate 490 and connects with downtown streets like Quincy and Chester Avenue, this is an excellent place to buy a property that is going to go up in value. When you know that better streets and traffic management along with improved public transit will go into an area, it is a safe bet for investing in the Cleveland real estate market.

The nucleus is another downtown redevelopment project that seeks to bring mixed-use real estate to depressed areas. The nucleus is centered around two million square feet of retail, residential, and office space, though there will be around 500 residential units. If you want to invest in the Cleveland real estate market, consider buying and rehabbing housing for those who will work in NuCleus but couldn’t get one of the apartments or condos.

University Circle & The Western Rim

University Circle is one of the hottest neighborhoods in Cleveland. It is seeing a wave of high-end condos and apartments. If you can find single-family rentals or multi-family housing in the vicinity, snap it up. These are among the most desirable properties in the Cleveland housing market. We know that when they were willing to turn a former Children’s Museum into an apartment building.

The Western Rim of Cleveland hasn’t been overlooked in the rush to redevelop downtown and the Biotech corridor. Projects worth an estimated 350 million dollars have been proposed or are actually under construction between West 25th and West 117th streets. A business incubator has been proposed for the Western Rim. The Cleveland housing market on the west side should see significant growth as new businesses pop up here. The luxury rentals built in the Near West Side are probably only the start of this area’s resurgence.

The Redeveloped Lakeshore

Cleveland sits on the southern shore of Lake Erie. Cleveland is redeveloping its long waterfront district. The fifty-year plan has already resulted in mixed-use development between West 3rd and East 18th streets. Redevelopment includes rehabilitating waterfront infrastructure like bridges, canals, and “made land”. Reinvented lakeside trails create desirable areas that will command a premium on the Cleveland real estate market. Euclid has already demonstrated this with their lakefront project and main waterfront park. Newly opened areas like the one created by the demolition of the FirstEnergy coal fire plant are to be seen as opportunities to reinvent the Cleveland real estate market.

A New Lease on Life for Old Buildings

The Cleveland housing market is so hot that they’re turning old commercial buildings into new residential spaces. A classic example of this is the former Huntington Bank Building; it is currently known as the 925 Building. The commercial building will be transformed into a mixed-use building with office space, retail space, a Hilton hotel, and 600 apartments.

Catering to the New Medical Talent

While there are Americans who worship Canada’s single-payer healthcare system, the reality is that millions of Canadians come to the United States each year. Some were denied care by their government, while many simply don’t want to wait months for a procedure, so they choose to pay cash at U.S. hospitals. Cleveland is building medical facilities to cater to these medical tourists. And these doctors, nurses and medical specialists are buying homes close to work, whether it is at the world-renowned Cleveland Clinic or the hospital down the street.

Another variation of this strategy is buying property in the Cleveland housing market that caters to medical school students. Case Western Reserve University and the Cleveland Clinic Lerner College of Medicine see many students from around the world who come to the area for one to five years to attend before leaving to practice elsewhere. (The Lerner College is a five-year tuition-free medical school).

Summary

If you are a home buyer or real estate investor, Cleveland real estate investment definitely has a track record of generating one of the best long-term returns in the U.S. through the last ten years. Cleveland is a notable exception to the decline of the Rust Belt cities. It has managed to reinvent itself, shifting from classic manufacturing to biotech and medicine. In the process, it has maintained its population and has strong potential for growth both economically and demographically.

There are over 590 schools in Cleveland, OH. There are 238 elementary schools, 154 middle schools, 84 high schools, and 121 private & charter schools. There are over 105 neighborhoods in Cleveland. Some of the best neighborhoods in or around Cleveland, Ohio are Old Brooklyn, Parma, and Euclid. The Bay Village area is a highly desirable suburb of Cleveland, Ohio.

Cleveland Magazine rated it the number one suburb to nest in, citing low crime, increasing home values, and great schools. Bay Village retained these positive elements even during the recession. Tremont has a median listing price of $320K, making it the most expensive neighborhood. Mount Pleasant is the most affordable neighborhood, with a median listing price of $60K.

Here are the 10 highest appreciation neighborhoods in Cleveland since 2000 (List by Neigborhoodscout.com).

  1. W 7th St / Marquardt Ave
  2. Detroit Ave / W 25th St
  3. Castle Ave / Scranton Rd
  4. Route 422 / Broadway Ave
  5. W 6th St / Literary Rd
  6. Detroit Ave / U.S. Route 6
  7. Euclid Ave / E 55th St
  8. City Center
  9. Lake Ave / Detroit Ave

Buying an investment property is different from buying an owner-occupied home. Our Cleveland investment properties are designed to make money as rentals, which means you must look at it solely as an income-producing entity just like any other business. These are “Turnkey Cash Flow Investment Properties” located in some of the best neighborhoods of Cleveland.

Another market that we suggest is the housing market in Iowa City. While the Iowa City real estate investment market is not overheated or exciting, it offers strong fundamentals like a large rental population relatively immune to rental rates. It will see slow, steady growth in property values and rental rates for years to come.

Investors in hot real estate markets have to wonder if the appreciation and rental increases will stop when a wave of new inventory hits the market. The Iowa City housing market does not face this problem. Instead, demand for the existing Iowa City housing market remains steady while the supply is constrained by a lack of construction. Replacing homes that flooded or burned down does not bring new inventory to a slowly growing market.

Another market that we suggest is the housing market in New Orleans, LA. New Orleans is a bit pricey for an average investor to make good returns and it involves strategic planning. However, it offers a good combination of short-term renters like students and tourists and a permanent population of renters who cannot afford to buy homes. Geography and market forces limit housing supply, keeping home values and rents stable.

Airbnb was legalized in the New Orleans real estate market in 2016 and it’s been growing quite well since then. Therefore, you can choose to invest in Airbnb rentals in New Orleans and earn a steady rental income. The upfront cost of running an Airbnb business is not much as you do not need to own a rental property. However, if you want, you can buy a rental property in New Orleans for an Airbnb investment. Unlike big cities like New York, the regulations on short-term rentals in New Orleans are not very tight, though there is some criticism from opponents about the leniency of these laws.

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 is your ability to find great real estate investments. 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. We can help you succeed by minimizing risk and maximizing profitability. We recommend asking for a FREE Strategy Session by clicking here. One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.

Remember, caveat emptor still applies when buying a property anywhere. 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

Market Data, Trends & Statistics
https://www.zillow.com/cleveland-oh/home-values/#
https://www.redfin.com/city/4145/OH/Cleveland/housing-market
https://www.neighborhoodscout.com/oh/cleveland/real-estate
http://www.freddiemac.com/research/indices/house-price-index.page
https://www.realtor.com/realestateandhomes-search/Cleveland_OH/overview
https://www.movoto.com/guide/cleveland-oh/cleveland-real-estate-market-trends

Lerner College
https://atlantisglobal.org/blog/2017/11/21/get-paid-in-medical-school-my-journey-to-the-cleveland-clinic-lerner-college-of-medicine

Brownfields / urban redevelopment
https://www.calthorpe.com/content/cleveland-gateway-redevelopment-plan

The Opportunity Corridor
http://www.freshwatercleveland.com/features/SevenProjects022317.aspx

University Circle
http://www.freshwatercleveland.com/features/SevenProjects022317.aspx

Waterfront
http://planning.city.cleveland.oh.us/lakefront/cpc.html
https://www.cleveland.com/architecture/index.ssf/2017/11/euclid_close_to_building_lakef.html
http://www.news-herald.com/lifestyle/20170602/clevelands-lakefront-parks-are-stable-flourishing

The Western Rim
http://www.crainscleveland.com/article/20170507/news/170509850/clevelands-western-rim-embarks-development-boom

Biomedical hubs and hospitals
http://www.theglobalcenter.com/about-us
https://newsroom.clevelandclinic.org/2018/07/11/luye-medical-collaborates-with-cleveland-clinic-to-pioneer-value-based-healthcare-in-china

Naples Real Estate Market & Investment Overview 2020

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We’ll be discussing the latest Naples real estate market trends & statistics to find out how they can affect the investors and homebuyers in the next six to twelve months. The Naples real estate market has been extremely resilient to the impact of the coronavirus pandemic. Buyers have less negotiating power because inventory in the Naples area continues to decline. It experienced a heightened homebuying interest in July, which resulted in a 57.3 percent increase in pending sales for the month. Total sales (closed) during July increased 35.4 percent year over year.

That's up 42% compared to the month before, according to NABOR®. A decreasing supply of inventory is making it difficult to keep up with strong pent up demand from buyers. Data by Realtor.com also corroborates that in July 2020, the Naples housing market was a seller’s market, which means there were roughly more buyers than there were active homes for sale. The sellers in Naples have managed to hold good leverage in price negotiations.

On average, they could sell homes for 96.25% of the listing price–just 3.75% below asking price. A seller would always prefer scenarios that can yield a ratio of 100% or higher while a buyer would prefer a sale to asking price ratio that’s closer to 90%. The median list price of homes in Naples, FL was $382.5K, trending up 5.7% year-over-year while the median sale price was $359K. More insights into the Naples housing market from NABOR 2020 Market Reports are given below.

Naples Real Estate Market

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

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

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