The low inventory and high competition in the Seattle housing market continue to make it difficult for homebuyers to find a place to call home. Increasing single-family home prices have resulted from a widespread housing boom fueled by historically low interest rates and a scarcity of available properties, making homeownership out of reach for more people. As more millennials enter the market, the demand crunch will intensify. From the standpoint of supply and demand, Seattle's housing market is currently one of the most inequitably balanced in the United States. Many homes get multiple offers, some with waived contingencies.

There’s just not enough supply to keep up. Growing demand is expected to continue as a result of a lack of new construction entering the market in suburban areas following years of underdevelopment. With interest rates remaining at historically low levels and a supply of homes available for sale in the region of less than one month, the perfect storm for rising house prices will continue, albeit perhaps not quite as ferociously as previously.

What you get to see are record-breaking housing prices and record-breaking low inventory. Seattle's housing market is driven by employees of local tech businesses like Amazon and Microsoft, as well as corporations with big operations in the vicinity like Google and Facebook. Many of them didn't want to work remotely in small apartments during the epidemic, so they sought spacious homes with office areas. Most of them have the financial means to compete with other buyers and raise home selling prices.

According to Realtor.com, Seattle is a seller's market. In August 2021, the median asking price for a home in Seattle was approximately $755,000, up 2.8 percent year over year. At $800K, the median sale price was even higher. Low interest rates and continued job growth continue to drive the market. If the Median Listing Price is increasing, the market is likely “hot,” and homes will sell more quickly. When prices increase, sellers will benefit. In August 2021, homes in Seattle, WA sold for approximately the asking price.

On average, homes in Seattle sell after 39 days on the market and everyone knows it’s going to sell above the seller's asking price. Alki Point has a median listing price of $1.2M, making it the most expensive neighborhood. Lower Queen Anne is the most affordable neighborhood, with a median listing price of $532K.

According to NWMLS, August is traditionally a slow month for home sales, and this year was no exception. Month-to-month drops in new listings, total inventory, pending sales, close sales, and median prices are shown in figures comparing July to August. According to their statistics, the number of new listings added during August, which include single family homes and condominiums, decreased from both July (down 11.5 percent) and twelve months ago (down 4.2 percent ).

Additionally, total inventory for the 26 counties included in the report dropped by approximately 6.6 percent from July and by nearly 22.6 percent from a year ago. At the end of the month, there were 7,425 active listings, a decrease from the previous year's total of 9,591. NWMLS predicts that the continued scarcity of available inventory will result in properties selling quickly if they are priced reasonably.

During the month of August, there were signs that prices were beginning to level off. The median price (system-wide) on the 10,571 sales that closed last month was $579,000, representing a decrease of $10,000 from the previous month's median price of $600,000. Prices did rise when compared to a year ago, rising from $490,000 to $520,000, representing an increase of approximately 18.2 percent. That year-over-year (YOY) percentage change was the smallest since February when there was a bump-up of about 15%.

Homes are selling fast and buyers are bidding up prices. The median price for closed sales of single-family homes and condominiums (combined) in King County grew by 13.49% year-over-year to $771,750 in August 2021, with similar increases in Snohomish (17.52%), Pierce (18.82%), and Kitsap (14.7%) counties. That’s incredibly strong double-digit appreciation. In the fall home-buying season, it's likely the strong buyer demand, low-interest rates, and tight inventory (less than a one-month supply throughout the region) will continue to be key factors in the Seattle-Area housing market.

August continued the Puget Sound area's extreme real estate market, with strong buyer demand fueled by historically low interest rates and a backlog of buyers still looking for a home. Three of the four counties in the Puget Sound region, the tri-county area encompassing King, Pierce, and Snohomish counties had YOY improvement in new listings.

Northwest MLS figures indicate there was around three weeks of inventory (0.70 months) at the end of August. Clark, King, Kitsap, Lewis, Mason, Pierce, Snohomish, and Thurston counties had only about three weeks of inventory, with Snohomish reporting the smallest supply (0.49 months), about two weeks. It will likely take between four to six months for the Puget Sound housing market to shift to a more balanced market. There are far more buyers than there are available homes for sale in the entire Puget Sound region's housing market.

We believe prices will continue to rise, which is good news for sellers, but at the same time, it raises concerns about affordability. However, our main focus would be on King County and Seattle housing market trends for August 2021. High demand kept supply depleted. August 2021 housing report from “Northwest Multiple Listings Service” found that King County had 2,268 active listings (SFH+condo), a -43.44% decline from the same time last year when there were 4,628 active listings.

An active status means that the home is currently available for sale. It may have received offers, but none have yet been accepted, which means that the opportunity is wide open for you to propose. If you look at the housing supply in the King County area, it has declined drastically and is now at 0.52 months for single-family homes and 0.97 months for condos. It means that at the current pace of sales, all single-family homes would dwindle in less than 3 weeks if no new listings come on the market.

According to NWMLS, the condos are more reasonably priced (median price < $500K) and there are more months of inventory than with single-family homes. So those who are renting should consider condos as an ownership opportunity and a way to build equity in the future. In King County, which accounted for nearly six of every 10 condo sales during August, the year-over-year increase was 10.4%. The median-priced condo in King County sold for $458,000. Single-family homes (excluding condos) in King County had a median sales price of $850,000. That is $392000 more than condos (nearly 85% higher).

Only in the city of Seattle is the extreme inventory shortage subsiding, providing some relief to homebuyers, particularly those looking for condos. In Seattle, pending condo sales increased 12.09 percent last month. while condo active listings decreased by -43.61 percent year over year. The housing supply, measured in months of inventory, is 0.67 months for single-family homes (still quite tight) and 1.58 months for condominiums. The median price of single-family homes increased by 6.06 percent to $875,000, while condos decreased by 4.95% to $480,000.

To summarise the last month's statistics we can say that All King County & Seattle remains a seller's real estate market with only 0.62 months of inventory — still well below what is required to meet the volume of buyers right now. In the current market environment, home buyers are trying to take advantage of low-interest rates, and the local real estate agents are struggling to meet the demand. According to local realtors, as buyers seek to cash in on record-low interest rates the market is predicted to remain this way until at least April of next year.

If interest rates weren’t historically low, buyers would be unable to afford the escalating cost of housing. The ongoing combination of very low mortgage rates and escalating prices has both buyers and sellers taking advantage of the market. Buyers are finding well-priced homes in good condition, and sellers are seeing many multiple offer situations. With the virus and increased flexible work-from-home options, people can move to suburbs and outer areas in search of value and lower population density.

Therefore, buyers are also starting to find homes in the suburbs. Seattle-based Zillow Group predicts a ‘suburban boom' in the US housing market as remote work becomes more common. Inventory stays tight in the Seattle metro area as well (King, Snohomish, and Pierce counties), even with an increase in listings. It suggests continued price growth into the summers as demand remains high and interest rates remain low.

Seattle Housing Market Trends 2021 (Describes August)

Below is the most recent Seattle Housing Market Report released by “Northwest MLS.” The report compares the key housing metrics of the City of Seattle (that is part of King County). For buyers in Seattle, the historic drop in the mortgage rates is a significant advantage to move forward and scoop up some properties from the market. If you are buying the interest rates have never been lower and this is typically the time of year when more listings start coming on the market. Therefore, it is an apt time to make a move.

Here are the numbers (RES+CONDO) for August 2021 compared with August 2020.

ACTIVE LISTINGS FOR SALE

• Total active listings in Seattle were 1,107.
• This represents a decrease of -43.92% as compared to August 2020.
• Total active listings in All King County were 2,268.
• This represents a drop of -43.44% as compared to August 2020.

NEW LISTINGS FOR SALE

• 1,222 new listings were added to the market by brokers in Seattle.
• This represents a decrease of -32.75% as compared to August 2020.
• 3,774 new listings were added to the market in All King County.
• This represents a decrease of -18.45% as compared to August 2020.

CLOSED SALES

• 1,221 closed sales were registered by brokers in Seattle.
• This represents a year-over-year increase of 10.10%.
• 3,680 closed sales were registered in All King County.
• This represents a year-over-year increase of 6.48%.

PENDING SALES

• 1,251 pending sales were registered by brokers in Seattle.
• This represents a decrease of -7.88% from the same month a year ago.
• 4,027 pending sales were registered in All King County.
• This represents a decrease of -8.89% from the same month a year ago.

MEDIAN SALES PRICE

• Seattle's median sales price increased by 4.31% to $799,000.
• Last year, at this time, the median price in Seattle was $766,000.
• King County's median price increased by 13.49% to $771,750.
• Last year, at this time, the median price in King County was $680,000.

MONTHS OF INVENTORY (MOI)

• 0.91 months represents the number in Seattle.
• Months' of supply in All King County is 0.62.
• 6 months of supply is when you have a balanced real estate market. 
• This shows that this region continues to be a strong seller’s housing market.

Seattle Real Estate Market Forecast 2021-2022

According to a Redfin analysis published in June 2021, over 4,500 Seattle-area homes sold for more than $100,000 above the asking price in 2021, a significant increase over the previous year, when only 400 homes sold for more than $100,000 above the asking price. Over 6,300 homes in Seattle have sold for between $25,000 and $99,999 more than the asking price, an increase of nearly 2,000 over the same period last year. Thus far in 2021, the average Seattle-area home has sold for $47,878 more than the asking price. In comparison, in 2020, $3,025 was spent during the same time period.

Seattle, despite years of rising home prices, is nowhere near the top of Redfin's list of cities with the highest share of cash buyers. In July 2021, Seattle's median home sale price reached a new high of $795,000, up 7.5 percent year over year, in part due to the high number of homes being bid up above the asking price. 47.4 percent of Seattle properties sold for more than their asking price, an increase of 20.9 percent year over year. In Seattle, the average sale price per square foot is $535, up 14.3 percent from last year. In Seattle, homes sell after an average of seven days on the market, down from eight days last year. In July, 1,455 homes were sold, up from 1,232 last year.

What are the Seattle real estate market predictions for 2021 & 2022? 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 2012, the home values in the city of Seattle have appreciated by nearly 140% — 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 December to an upward trend.

For the first time since 2014, homes in this area were selling below their listing prices. The current typical home value of homes in Seattle is $871,286. 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 $871,286 and 50 percent is worth less (adjusting for seasonal fluctuations). In August 2020, the typical value of homes in Seattle was around $771,000. Home values have gone up 14.2% over the past year alone. The Zillow Buyer-Seller Index considers Seattle a sizzling hot seller’s real estate market.

Similar growth has been recorded by NeighborhoodScout.com. Their data also shows that Seattle's real estate appreciated 98.20% over the last ten years, which is an average annual home appreciation rate of 7.08%, 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 low but on a positive side (5.13%), and in the latest quarter, the appreciation rate has been at 1.66%, which annualizes to a rate of 6.80%. This figure also corroborates Zillow's positive forecast, so the home prices in this region are expected to increase by at least 7% 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 the housing prices increase in a region. The strong price appreciation we saw in 2020 will continue in 2021 as the biggest price boost will occur during to peak buying season.

Realtor.com offered real estate predictions for 100 of the top metro areas in the U.S. Out of those 100 metros, the Seattle metro area was the #5 housing market for combined sales and price growth. They predict that home values within the Seattle-Tacoma-Bellevue metropolitan area would rise by 9.7% during 2021. Their sales forecast is 8.9%. Boise was at #4 with a price growth forecast of 9.1%.

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 22.7% over the past year and Zillow predicts they will rise 13.9% over the next 12-months.
• Seattle home values have gone up 14.2% over the past year and will continue to rise at a similar pace over the next 12-months.
• King County home values have gone up 19.0% over the past year and will continue to rise at a similar pace over the next 12-months.
• Pierce County home values have gone up 23.1% over the past year.
• Snohomish County home values have gone up 28.9% over the past year.

The chart below, created by Zillow, shows the growth of median home values since 2011 and their forecast until July 2022. We will update it when the new data is available.

Seattle-Bellevue-Everett, WA Historical Appreciation

The historical change in home prices for Seattle-Bellevue-Everett, WA is shown below for the three-time period. The Home Price Index indicates that the Seattle market is up 48% over the last 10 years (data up to 3rd Quarter, 2018). Over the last thirty years, it is up 497%. The highest annual change in the value of houses in the Seattle Real Estate market was 33% in the twelve months ended with the 2nd Quarter of 1978.

The worst annual change in home values in the Seattle Market was -11% in the twelve months ended with the 3rd Quarter of 2009. The highest growth in home values in the Seattle Real Estate Market over a three-year period was 96% in the three years ended with the 4th Quarter of 1978. The worst performance over a three-year period in the Seattle Market was -24% in the three years ended with the 2nd Quarter of 2011. For the upcoming updates, you can visit LittleBigHomes.com.

Time Period	Seattle Metropolitan Area Real Estate Appreciation
Last 5 Years	69%
Last 10 Years	48%
Last 20 Years	197%
Decline From All-Time High	0.02%

These numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller? The increase in the number of new and total listings indicates that sellers are now willing to put their homes on the market. People continue to buy and sell their homes, whether they're growing their family and need a bigger place, relocating for a job, or retiring. And the real estate industry has quickly adapted to restrictions due to the novel coronavirus pandemic by conducting business using technologies such as virtual showings and e-signing to help buyers and sellers with their housing needs in the face of these challenges.

Opportunities abound for both buyers and sellers if they’re willing to act quickly. Sellers, brokers, and homebuyers seem to be adjusting to restrictions imposed on the real estate industry because of the coronavirus pandemic. With the help of agents, buyers are touring properties virtually, on FaceTime, or WhatsApp calls. The constraint on available inventory is making the Seattle real estate market heat up again. Seattle and the entire metro area market is so hot that it cannot shift to a complete buyer’s real estate market, for the long term. In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero.

In terms of months of supply, Seattle can become a buyer’s real estate market if the supply increases to more than five months of inventory. And that’s not going to happen. The pandemic caused some sellers to take a pause which resulted in the Seattle housing market facing even more of a decline in inventory. At the same time, buyer demand remained as before.

The bottom line: The current inventory (months of supply for SFH+condos) in this region remains very tight — 0.93 months in Seattle and 0.66 in All King County. Therefore, in the long term, the Seattle real estate market remains as strong as always. This housing market is skewed to sellers due to a persistent imbalance in supply and demand.

For buyers in Seattle, the low-interest rates (near 3%) continue to be an incentive. We expect a high number of listings to hit the market in the summers. It’s a positive sign for homebuyers, especially for those to want to invest in Seattle real estate. More inventory leads to more options for buyers and it could potentially lead to more sales as well. 

Real estate market forecasts given in this article are just an educated guess and should not be considered financial advice. Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control. Many variables could potentially impact the value of a home in Seattle in 2021 (or any other market) such as big changes in the distressed, new-construction, or luxury home segments. There are also a wide variety of economic and political factors that can and do impact real estate markets. Most of these variables are difficult to predict in advance. 

Impact of Pandemic on The Seattle Housing Market

By late 2019, Seattle home prices had begun once again to rise. Prices rose faster in October 2019 than they have for a year. In October, Seattle house prices rose 3.3% from a year ago, to $775,000 — the largest percentage increase in 12 months. According to a December 2019 report by The Seattle Times, home prices in the area had posted year-over-year gains for three months in a row. Right from January, we saw very high demand, low inventory, and it looked like that we'd see some appreciation in 2019.

The supply of properties on the market in King County was drastically decreasing, down 40.7% by the end of February, from a year ago. This is an advantage to sellers right since there aren't as many homes to sell compared to normal trends. By January 2020, the Seattle housing market had posted the highest growth in the entire region. Before coronavirus hit, the market was really in good shape. Seattle's housing market was hotter than almost anywhere else in the country.

The 2020 housing market offered a lot of surprises. It was remarkable for many reasons, not the least of which was its extraordinary resolve through the COVID-19 pandemic. Covid-19 pandemic slowed down the volume of sales and the pace of sales in the Seattle area. It caused some fraction of buyers to put off their planned home purchases and a portion of sellers to hold off on listing their homes. Residential real estate activity reflected expected declines during April with the impact of the coronavirus pandemic taking its toll.

Due to falling inventory, the sellers were facing a lot less competition from each other. Many of them decided not to list their homes in the spring season, which led to a heavy decline in listings but kept the prices steady and strong. The Seattle home price was up by 6% in February 2020, from a year ago. Also, there was an increase of 1.3% as compared to January 2020. Data from Northwest Multiple Listing Service showed that inventory remained tight in March as well.

At the end of March, there were 2813 active listings in King County. That was a 34.01% drop from the year ago when active listings were 4263. Brokers reported 2,450 closed sales for a YOY gain of more than 6.99%. The pending sales (mutually accepted offers) were 3,031, a year-over-year drop of 17.12%. A total of 10,291 new listings were added (in all the 23 counties reported by NWMLS) during March. The total no. of active listings at the end of March was 9,418. That was a drop of 21.63% from the same month a year ago. Compared to February, March's inventory increased by 2,505 listings, still felling short of matching demand in the entire region.

According to the figures of Northwest MLS, in December 2020, new listings, pending sales, closed sales, and prices all went up in the Puget Sound region when compared to the same time last year, according to the report from Northwest Multiple Listing Service. Every market serviced by NWMLS was trending below December 2019 for total active inventory.

Year over year, the median sales price in the four-county metro rose between 9.6% to $740,000 in King and 17.1% to $439,000 in Pierce. Prices in Snohomish and Kitsap counties both increased by about 12% to $573,495 and $426,000, respectively. Of the NWMLS's 22 counties where prices increased, only King did not see double-digit hikes. The largest increases were logged in outlying counties like Kittitas — up 30.4% to $452,500 — and Pacific, where prices jumped nearly 38% to $282,500.

Across the 25 counties in the MLS at the end of December, there were 4,732 active single-family and condominium listings. That's down 44% from a year ago. There were only about two weeks of supply (0.53 months) overall. Only five counties had more than a month of supply, well below the four-to-six months of supply used by housing analysts as a gauge of a balanced market.

In King County, despite a nearly 62% increase in new listings compared to a year ago, the insatiable buyer demand quickly absorbed available properties. In December, the county had 1,793 new listings, up from 1,107 in December 2019. But still, the number of total active listings continued to be about 14% lower than it was at the same time in 2019. The county saw 3,096 closed sales in December, up 28% over 2019. Home prices were also up nearly 10% year-over-year, at a median price of $676,000 in December.

Seattle Real Estate Investment: Should You Buy Investment Properties?

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.

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 the 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.

Top Reasons To Invest In The Seattle Real Estate Market

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 actually 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 most driving factor of Seattle home prices. Positive forecast for home values in the next twelve months – 6-8% appreciation is expected. According to the U.S. Bureau of Labor Statistics, Seattle-area employment jumped 3.4% between December 2018 and December 2019. The second-largest increase in the nation after the Dallas region. Seattle is projected to see over 2.2% economic growth and 2.6% job growth. Looking back historically, Seattle has a track record of being one of the best long-term real estate investments in the nation.

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, actually. 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.

During the same time, the median home price in the city has shot up from $420,000 to $720,000 (according to the Northwest MLS) and home prices in the metro area as a whole have gone up 47 percent. Between 2008 and 2018, over 535,000 homes have sold in the entire Seattle metro area. For comparison, that’s 41 percent more than in the similarly-sized San Diego metro area. Much of this 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 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 6.5%. 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.

Rental prices are declining in Seattle due to the ongoing pandemic which has caused high vacancies. As of August 16, 2021, the average rent for a 1-bedroom apartment in Seattle, WA is currently $1,650. This is a 3% decrease compared to the previous year. Over the past month, the average rent for a studio apartment in Seattle increased by 4% to $1,295. The average rent for a 1-bedroom apartment increased by 3% to $1,650, and the average rent for a 2-bedroom apartment increased by 2% to $2,150.

• Two-bedroom apartments in Seattle rent for $2,150 a month on average (a 4% decrease from last year)
• Three-bedroom apartment rents average $3,100 (a 3% increase from last year).
• Four-bedroom apartment rents average $3,800 (a 6% 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 in July 2021 across 10 metro cities to show the most and least expensive cities and cities with the fastest-growing rents. The Washington one-bedroom median rent was $1,388 last month. Bellevue was the most expensive city with one-bedrooms priced at $2,110 while Bellingham was the most affordable city with one-bedrooms priced at $1,250.

Here are the best areas to invest in a rental property in the Seattle Metro Area in 2021. This does not include Seattle because rents are declining over there. 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 — its livability, vacancy rate, average rents,  quality of the local schools, and amenities such as parks, restaurants, gyms, movie theaters.

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

• Tacoma had the fastest-growing rent, up 23% since this time last year.
• Bellingham saw rent climb 10.6%, making it second.
• Kent was third with rent jumping 9.6%.

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

• Olympia had the largest monthly rental growth rate, up 5.1%.
• Bellevue rent increased 5% last month, making it the second-fastest-growing.
• Tacoma ranked third with rent climbing 4.9%.

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 literally 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 actually 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.

Where To Buy Seattle Investment Properties?

Are you looking for an investment property in the Seattle real estate market? 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 median home value in North Redmond is $866,702 and the median rent is $2,318.

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 median home value in North Delridge is $603,188. North Delridge home values have gone up 3.2% over the past year and Zillow predicts they will fall -1.7% within the next year. Therefore, it is probably the right time to start finding some good investment opportunities. 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.

According to Redfin.com, the Capitol Hill housing market is very competitive. As we write this, the median sale price of a home in Capitol Hill is $679,950, up 22.0% year-over-year. Homes in Capitol Hill receive 1 offer on average and sell in around 8 days. The average sale price of a home in Capitol Hill was $680K last month, up 22.0% since last year. The average sale price per square foot in Capitol Hill is $618, up 0.24% since last year.

On Apartmenthomeliving.com, the pricing for Studio Apartments in Capitol Hill currently ranges from $700 to $10,000 with an average price of $1,840. As we write this, the rental pricing for One Bedroom Apartments in Capitol Hill ranges from $655 to $9,585 with an average monthly rent of $2,488. The current average rental price for two bedrooms is $3,264.

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 $550,022. Highland Park home values have gone up 3.5% over the past year.

According to RentCafe, the average rent in Highland Park, Seattle, WA is $1,842. About 50% of the apartments can be found in the range of $1,501 – $2,000. The price range for a studio apartment in Highland Park, Seattle, WA is between $1,379 and $1,429. The price range for a 2-bedroom apartment in Highland Park, Seattle, WA is between $1,899 and $1,939.

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. The median home value in South Hollywood Hill is $817,547 and the median rent is $2,129.

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 median home value in South Hollywood Hill is $742,997.

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, as of November 2020, the average apartment rent in Sammamish, WA is $1,587 for a studio, $1,808 for a one-bedroom, $1,903 for two bedrooms, and $2,474 for three bedrooms. Apartment rent in Sammamish has decreased by -2.8% in the past year.

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

1. James St / Boren Ave
2. Antioch U-Seattle / 4th Ave
3. Cornish College of the Arts / Stewart St
4. Mars Hill Graduate School / Elliott Ave
5. 12Th Ave S / S King St
6. Boren Ave / Madison St
7. Seattle Community College-Central Campus / Broadway
8. Seattle U / 12Th Ave
9. E Jefferson St / 20th Ave
10. Delridge Way SW / Sylvan Way SW

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 of 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 actually 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 was 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.

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

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

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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

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

Foreclosure Statistics
https://www.realtytrac.com/statsandtrends/wa/king-county/seattle

Rental Market (Apartments) Statistics
https://www.rentjungle.com/average-rent-in-seattle-rent-trends/
https://www.rentcafe.com/average-rent-market-trends/us/wa/seattle/

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/

We will discuss the latest Columbus Ohio real estate market trends & news and find out how they can affect the investors and homebuyers in the latter half of 2021. Columbus is a slowly and steadily growing real estate market that will be thriving well into the foreseeable future. The real estate statistics in Columbus show us that while construction is increasing, inventory is still scarce because of increasing demand. This is leading to a steady year-over-year increase in the Columbus house prices.

Let’s continue to explore the Central Ohio housing market to understand the latest trends. According to the Columbus REALTORS® Multiple Listing Service, the Central Ohio market added 4,612 homes last month, a 21.0 percent increase over the previous year. However, home sales increased by only 2.7 percent to 3,630, a significant change from the double-digit increases seen in eight of the last ten months. This shift in the pace of housing activity, particularly the increase in inventory, provides buyers with more options and a little more time to consider their options.

High demand coupled with low inventory has driven up prices in many regions, including Central Ohio. According to the July 2021 Central Ohio Housing Report, median home prices are up nearly 12 percent year-over-year. The average price of a home sold in July was $313,737, up 12.8 percent from July of 2020. The median sale price was up 12.2 percent to $275,000.

More data from the realtors shows that about 5% of homes listed in 2021 have had their list prices increase before the sale. However, 12.6% of homes had to be marked down to be sold. Since the beginning of the year, these price adjustments have been on the decline. Price adjustments were made to just under 15% of homes last month, compared to 27.2% of homes in January.

Average days on market by price segments:

• Homes under $350,000 sold in an average of 9 days.
• Homes sold between $350,000 and $500,000 took about 12 days to sell.
• Homes in the $500,000 to $700,000 price range sold in an average of 15 days
• Homes over $700,000 were on the market for an average of 18 days.

Columbus Ohio Housing Market Prices & Forecast 2021-2022

We shall now discuss some of the most recent Columbus real estate trends and compare them with the past year. We shall mainly discuss median home prices, inventory, and growth, which will help you understand the way the local real estate market moves in this region. Columbus is also one of the hottest real estate markets in the nation. Columbus real estate has appreciated 65.05 percent in the last ten years, for an average annual home appreciation rate of 5.14 percent. This puts Columbus in the top 20% nationally for real estate appreciation.

According to Realtor.com, in August 2021, the median list price of homes in Columbus, OH was $229.9K, trending up 12.2% year-over-year. The median listing price per square foot was $149. The median sale price was $182K. Homes in Columbus sell faster than average compared to other cities in Franklin County. Ideally, a buyer would prefer a sale to asking price ratio that’s closer to 90%. The sellers in Columbus have managed to hold good leverage in these negotiations in the past month. On average, they could sell homes for 109.18% of the asking price. A seller would always prefer scenarios that can yield a ratio of 100% or higher.

• Italian Village has a median listing price of $550K, making it the most expensive neighborhood in Columbus.
• South Linden is the most affordable neighborhood in Columbus, with a median listing price of $115K.

Columbus 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 Columbus. Other types of housing that are prevalent in Columbus include large apartment complexes, duplexes, rowhouses, and homes converted to apartments. Single-family homes account for about 46% of Columbus' housing units.

About 1,616 single-family homes were sold in July 2021 in the Columbus City School District (Franklin County). From January to July this year, 8,984 single-family homes have been sold. As compared to 2020, it makes a year-to-date increase of 10% in the sale of single-family homes. The YTD average sales price has increased by 16% to $292,306.

Below is the latest monthly report of the Columbus Housing Market (Franklin County Area). The source of this report is – “Columbus REALTORS®.” The report compares key housing metrics of the Columbus City School District from July 2021 with July 2020.

• Home sales increased by 1.4% to 1,988 units.
• Pending sales dropped by 2% to 2,302 units.
• Median Sales Price rose by 15.8% to $271,000.
• The Average Sales Price rose by 16.7% to $312,956.
• The Average Price Per Square Foot rose by 11.8% to $143.48.
• Days on Market Until Sale dropped by 44.4% to 10 days.
• New Listings rose by 11.5% to 2,506 homes for sale.
• Total Inventory of Homes for Sale increased by 7.5% to 1,623 units.

The report shows it is still a strong seller's real estate market with just 0.9 months of inventory left on the market, which is only likely to keep driving prices higher in the near future. Historically, six months of supply is associated with moderate price appreciation, and a lower level of months’ supply tends to push prices up more rapidly. As we move forward the industry is adapting to the current environment by conducting business using technologies such as virtual showings and e-signing to help buyers and sellers with their housing needs in the face of these challenges.

Columbus Ohio Real Estate Market Forecast 2021 – 2022

What are the Columbus real estate market predictions for 2021 & 2022? We get to find that on Zillow, the typical home value in Columbus is $213,755. Let us look at the price trends recorded by Zillow over the past few years. Since Sep 2011, the typical home prices in Columbus have appreciated by nearly 98%. The prices rose by 8.4% over the last 12 months alone. Last year saw was the eighth consecutive year of home price gains.

Columbus 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 housing 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. According to NeighborhoodScout, the real estate appreciation rate in Columbus in the last quarter was around 1.95%, which amounts to an annual rate of 8.04%.

• The typical home value of homes in Columbus Metro is $261,324, up 16.2% over the past year.
• Zillow predicts they will rise 11.8% in the next twelve months.
• The Columbus metropolitan area consists of the counties of Franklin, Delaware, Licking, Madison, Pickaway, and Fairfield.
• The current population estimate is approximately 1.8 million people.
• Columbus home values have gone up 18.2% over the past year and will continue to rise in the next twelve months.
• Franklin County home values have gone up 17.3% over the past year and will continue to rise in the next twelve months.

Here is the Indianapolis real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 11.8% until August 2022.

Columbus has been one of the hottest real estate markets in the country for years. It is also one of the hottest real estate markets for investing in rental properties. This market is very much skewed to sellers due to a very low level of inventory that can't meet the demand of the rising population. If buyer demand eases, we could see a positive influence on Columbus' low inventory levels while at the same time seeing a negative impact on sales. Columbus and the entire metro area market is so hot that it cannot shift to a complete buyer’s real estate market, for the long term.

In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero. In terms of months of supply, Columbus can become a buyer’s real estate market if the supply increases to more than five months of inventory. And that’s not going to happen. Therefore, in the long term, the Columbus real estate market remains strong and skewed to sellers, due to persistent imbalance in supply and demand.

Whether you’re looking to buy or sell, timing your local market is an important part of real estate investment. Currently, the inventory is relatively increasing in Columbus, so buyers should take advantage of scooping up their favorite deals which otherwise are taken away by seasoned investors in the bidding wars.

Columbus Real Estate Investment Overview?

Should you consider Columbus's real estate investment? Many real estate investors have asked themselves if buying a property in Columbus is a good investment? You need to drill deeper into local trends if you want to know what the market holds for the real estate investors and buyers in 2021 & 2022. If you are looking to make a profit, you don’t want to buy the most expensive property on the Columbus real estate market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, an investment property in Columbus that you might move into or sell at retirement in the future. Either way, knowing your profit potential and purpose is the first thing to consider.

Is it a good time to buy a house or invest in Columbus? Let’s talk a bit about Columbus and the surrounding metro area before we discuss what lies ahead for investors and homebuyers. Columbus, Ohio is the 14th largest city in the U.S. It is home to almost nine hundred thousand people. Forbes reported in 2018 that Columbus is a rare Midwest success story, a “Rust Belt” city that has truly transformed itself and has begun growing again.

It is the only large northern city to grow by more than 10% between 2010 and 2018. Compare this to many northern cities continuing to hemorrhage people, whether they are moving to the suburbs or the south. This makes the Columbus housing market much healthier than Cleveland, Detroit, and smaller Ohio cities from which it has drawn population. The Columbus Ohio real estate market is bigger than many think. Take the suburbs into account, and the Greater Columbus metro area encompasses around two million people. Around 2.4 million people live in the combined statistical area (CSA).

The home prices in Columbus are still relatively low, so if you want to invest in Columbus real estate, then now would be a great time to do so. It is the second-largest metro area in the state. The area is expected to grow by more than 50% over the next 20-25 years. The real estate appreciation rate in Columbus in the latest quarter was around 0.45% which equates to an annual appreciation rate of 1.81%. Even small changes in the appreciation rate can change the long-term value of buying considerably.

Let’s take a look at the number of positive things going on in the Columbus real estate market which can help investors who are keen to buy an investment property in this city. We’ll address the biggest factor pulling people to the Columbus housing market next.

Columbus Real Estate Is Appreciating for Many Reasons

A city that’s losing people is typically going to see property values decline, though desirable neighborhoods may see steady or slight increases in valuation. The Columbus Ohio housing market is seeing steady growth due to slow population growth. Between 2013 and 2020, property values have increased. Over the last year, prices increased by around 17%. This is partially due to the demand for older, renovated homes in established, walkable neighborhoods. The limited supply of family-friendly homes in these areas is driving up their prices.

One interesting factor driving property valuations in the Columbus Ohio real estate market is city tax abatements in downtown neighborhoods. The city is encouraging people to buy up properties and renovate them, whether to rent out or live in themselves. Another point in favor of Columbus is that they didn’t crackdown on private rentals like Airbnb. For example, they decided in 2018 not to limit the number of days people could rent their homes out on Airbnb and similar sites.

Columbus is Landlord Friendly

Ohio is rather landlord-friendly, in the same category as Idaho and North Carolina. That makes it much more landlord-friendly than neighboring Midwestern states and far better than Pennsylvania. There are no laws regarding pets, payment grace periods, or re-keying. Interest owed on deposits is modest. Rental agreements are recommended but not required for short leases. There is no statutory limit on late fees but they must be “reasonable.”

Columbus' Sizable Student Market Is a Boon to Investors

Columbus, Ohio is the state capital. This means there are several universities in the city. Franklin University hosts nearly five thousand students. Capital University has about three thousand students. Ohio Dominican University is home to nearly two thousand students. There are nearly 40 colleges within fifty miles of Columbus.

And the sheer variety of colleges in the area means that investors can rent to the large population of students in the Columbus Ohio real estate market without worrying about their property values rising and falling based on the popularity of a flagship school. Between kids attracted to the Columbus Ohio housing market for school and work and choosing to stay to start their own families, the Columbus market enjoys a median resident age of 32.3.

This is seven years less than the median age for the state of Ohio. We can expect the next generation to grow up here to stay, as well, fueling demand for the Columbus housing market. Columbus, Ohio has to compete with many other surrounding cities in the Midwest. However, one point in its favor is the lower cost of living. That attracts residents who earn just as much here as in Chicago but don’t have to pay as much for things. The annual salary is a little less than the national average, but rents and housing are even lower – and much lower than hotter markets like Chicago.

Rental Trend: The average rent for a 1-bedroom apartment in Columbus, OH is currently $985. This is a 9% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Columbus increased by 6% to $795. The average rent for a 1-bedroom apartment increased by 6% to $985, and the average rent for a 2-bedroom apartment remained flat.

• The average rent for a 2-bedroom apartment in Columbus, OH is currently $1,100. Compared to last year, the average rent price has remained flat.
• The average rent for a 3-bedroom apartment in Columbus, OH is currently $1,650. This is a 14% increase compared to the previous year.
• The average rent for a 4-bedroom apartment in Columbus, OH is currently $2,000. This is an 8% increase compared to the previous year.

Columbus' Economy Is Healthy

We’ve already mentioned that Columbus, Ohio is considered a “Rust Belt” city that’s unique for a rebound. It enjoys unemployment rates of around 5%, but this is phenomenal compared to the surrounding area. The US saw incomes grow 22% between 2010 and 2016. Columbus metro area incomes grew roughly 25%. The city’s economy is healthy enough to retain many young people and attract some coming here to work, but it isn’t so hot that the bubble may burst. Most of the Columbus housing market growth has been younger people moving there from Ohio. This includes but isn’t limited to those who came for school but decided to stay.

Update: The BLS reported that the unemployment rate for Columbus rose 0.1 percentage points in July 2021 to 5.2%. For the same month, the metro unemployment rate was 0.2 percentage points lower than the Ohio rate. The unemployment rate in Columbus peaked in April 2020 at 13.5% and is now 8.3 percentage points lower.

Columbus' Tax Climate Is Balmy

Ohio’s effective property tax rate is 1.6%. That’s higher than the national average. However, Ohio is better than its peers for real estate owners, since its property tax rates are lower than those in several surrounding Midwestern states. Property tax rates do vary between counties, so you may pay lower property taxes for investment property in the suburbs as in downtown Columbus.

Redevelopment in Columbus

There are at least ten major redevelopment projects planned around Columbus, Ohio. These projects total an estimated billion dollars. Each of these redevelopment projects will increase the demand for homes in the area. In neighborhoods with new luxury condos, shopping, and employers, everyone’s property will be worth more. This allows real estate investors to invest in the Columbus Ohio real estate market in one or multiple locations, depending on their budgets and preferences. Nor do you have to worry about the one multi-family housing unit you bought collapsing in value because the mega-project in downtown was delayed or fell through for lack of funding.

Columbus Investment Properties

Investing in Columbus real estate can be a worthy investment due to a steady rate of appreciation. It mixes smart redevelopment, quality of life, and growth to create a stable, slow-growing market that will be thriving well into the foreseeable future. If you're looking to buy Columbus investment properties, it makes sense to do so when inventory levels are relatively high, like in the current phase of the pandemic.

The surplus of available opportunities can lead to softer negotiations with sellers. Columbus has a lower cost of living than the national average. Good cash flow from Columbus 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 a good Columbus real estate investment opportunity 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. There should be a natural and upcoming high demand for rental properties. Demand would raise the price of your Columbus investment property and you should be able to get a good return on your investment over the long term. The neighborhoods in Columbus 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 Columbus 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 such as duplex and triplex in Class A neighborhoods. The inventory is low, but opportunities are there.

Homes downtown tend to sell at higher prices than those on the city's south side. There are many neighborhoods to consider for buying properties in Columbus. Properties in Worthington and downtown Columbus have higher than average median home prices, and their relatively low crime rates add additional appeal. Places like Victorian Village, where home prices remain higher than many other places in the city, support a strong local market, and they can signify a lower level of risk. Some of the other popular neighborhoods in Columbus, Ohio are Upper Arlington, North Linden, and Grandview Heights.

Upper Arlington has a median listing price of $450K, making it the most expensive neighborhood. South Linden is the most affordable neighborhood in Columbus with a median listing price of $59K. Even as Columbus's home prices have reached new heights, they are still near to the national average, and the market remains attractive to residential real estate investors. As they continue to compete for potential investment properties at the lower end of the market, the challenges for first-time homebuyers will remain. Millennial homebuyers can't outbid real estate investors and hence end up renting.

As with any real estate purchase, act wisely. Evaluate the specifics of the Columbus housing market at the time you intend to purchase. 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 Columbus.

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

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

There are many other markets in the state of Ohio for real estate investing. Cincinnati is one of them. The Cincinnati real estate market is on the upswing and looking strong for the foreseeable future. It provides many opportunities for investors, regardless of the market you want to invest in. It is growing faster than the nation as a whole, though this is partially due to its recovery from a low point during the Great Recession. It is recovering home values and growth in cheap markets can yield the greatest ROI.

Cleveland is another good market to invest in real estate. 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.

Similarly, you can also consider Akron for real estate investing. It also presents a great opportunity for real estate investors. Akron has been known as the “Rubber Capital of the World” for more than a century. It is home to around 200,000 people. However, the Akron real estate market is much larger than this. Include the suburbs and small towns that surround it, and the Akron housing market contains roughly 700,000 people. The Akron area has hit its low and is starting to appreciate. This is a safer choice than buying in depressed areas that may not recover anytime soon.

Dayton is the sixth-largest city in Ohio. The city is home to roughly 140,000 people. The metro Dayton Ohio housing market includes around 800,000 people. Home values are predicted to go up steadily in the next five to six years making Dayton a great place for real estate investing. The Dayton Ohio real estate market is one of the best deals in the Midwest. It balances affordable properties with strong future growth, a large rental market and stable property values, low carrying costs, and decent ROI.

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

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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

Latest Market Data, Trends, and Statistics
https://www.columbusrealtors.com/housing-reports
https://www.zillow.com/Columbus-oh/home-values
https://www.neighborhoodscout.com/oh/columbus/real-estate
https://www.rentcafe.com/average-rent-market-trends/us/oh/columbus
https://www.realtor.com/realestateandhomes-search/Columbus_OH/overview

Overview/Demographics
https://en.wikipedia.org/wiki/Columbus,_Ohio
http://www.city-data.com/city/Columbus-Ohio.html

Hottest Housing Markets
https://www.realtor.com/research/october-2019-hottest-housing-markets
https://www.realtor.com/research/toughest-and-easiest-housing-markets-to-find-a-home

Low cost of living
https://realestate.usnews.com/places/ohio/columbus

Rebound
https://www.forbes.com/sites/adammillsap/2018/08/06/columbus-ohio-is-booming-but-will-it-last/#62a10ded25be

Real estate friendly policies
https://www.dispatch.com/business/20180713/columbus-wont-cap-rental-days-as-rules-for-airbnb-type-properties-near-finish-line

Landlord friendly
https://www.avail.co/education/laws/ohio-landlord-tenant-law
https://www.planetizen.com/news/2018/04/98435-which-states-are-most-renter-or-landlord-friendly

Student market
https://www.collegesimply.com/colleges-near/ohio/columbus

Taxes
https://smartasset.com/taxes/ohio-property-tax-calculator

Redevelopment
https://www.columbusunderground.com/the-top-10-columbus-urban-development-projects-of-2017
https://www.dispatch.com/news/20170810/downtown-development-boom-seems-endless-experts-say

This article has been updated to reflect recent changes in the Minneapolis real estate market due to the coronavirus pandemic. We'll be discussing the housing market trends for the Twin Cities Metro Area in 2021. Our focus for real estate investment would be the Minneapolis housing market—the entire twin city metro area—and we shall also share the top reasons to invest in this region.

Minneapolis–Saint Paul is a major metropolitan area and is commonly known as the Twin Cities after its two largest cities—Minneapolis and Saint Paul. They’re separated by the Mississippi River. The waterfront is home to many cultural landmarks and coveted waterfront real estate. The Twin Cities housing market remains strong, with the median price reaching $350K in July, up 11 percent from last year, according to a recent report from the Minneapolis Area Realtors.

New Listings in the Twin Cities region increased 0.7 percent to 8,139. Inventory levels fell 25.3 percent to 7,590 units. Buyers signed 6,202 purchase agreements in the Twin Cities metro area, down 11.3 percent. Sellers were encouraged as Months Supply of Homes for Sale was down 35.0 percent to 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. More details are given below.

Minnesota Housing Market Trends 2021 (Describes Entire State)

According to new data from local realtors, housing demand continues to outstrip supply in the entire state, and sales prices have reached all-time highs. Minnesota Realtors released July data, stating that the state's median sales price increased 12.5 percent to $315,000. Below is the latest report of the “Minnesota Housing Market” by Minnesota Realtors®.

The report shows the residential real estate activity of the entire state of Minnesota, composed of single-family properties, townhomes, and condominiums combined. Percent changes are calculated using rounded figures. Affordability also continued to drive the residential real estate market throughout Minnesota. Fueled by lower interest rates for home mortgages, the Affordability Index, a national measure of housing affordability, declined by 12.3% in July.

Minnesota Housing metrics that increased year-over-year:

• Median Sales Price + 12.5%
• Avg. Sales Price + 12.9%
• Pct. of Orig. Price Received + 3.7%

Minnesota Housing metrics that decreased year-over-year:

• New Listings – 0.2%
• Pending Sales – 14.2%
• Closed Sales – 8.7%
• Days on Market – 43.2%
• Affordability Index – 12.3%
• Homes for Sale – 29.7%
• Months Supply – 34.8%

Minneapolis–Saint Paul Housing Market Trends 2021 (Describes Twin Cities)

We shall now discuss some of the most recent housing trends in Minneapolis–St. Paul–Bloomington MN-WI metropolitan area. The area is commonly known as the Twin Cities after its two largest cities, Minneapolis, the most populous city in the state, and its neighbor to the east, Saint Paul, the state capital. With a strong economy and low mortgage rates, buyer activity has been very strong in 2021. Supply and demand continued to favor sellers leading to a rise in prices.

In the 16-County metro area surrounding the Twin Cities, where the housing market has been particularly hot, the number of closed sales fell 5.2 percent to 6,695 in July from July 2020.

• In July 2021, the number of new listings in the Twin Cities increased by 0.7 percent to 8,139.
• The average number of days on the market decreased 53.7% to 19 days.
• Price Per Square Foot increased 14.1% to $194.
• The median sales price increased 11.9% to $350,000.
• The average sales price increased 12.5% to $404,225.

Additional findings for the “16-County Twin Cities Housing Market” include the following. The source of this report is the Minneapolis Area REALTORS® and the Saint Paul Area Association of REALTORS®. The report compares the key housing metrics from July 2021 with July 2020.

Minneapolis Housing Market Trends (Describes City's Housing Stats)

The median list price of homes in Minneapolis, MN was $325K in July 2021, trending down -1.5% year-over-year, according to Realtor.com The median listing price per square foot was $219. The median sale price was $329.9K. The Sale-to-List Price Ratio is 100.85%, which means that on average, homes in Minneapolis, MN sold for close to the asking price in July 2021. Minneapolis is a seller's market, which means that there are more buyers than available homes.

Below is the latest report of the “Minneapolis Housing Market.” The source of this report is the Minneapolis Area REALTORS®. The report compares the Minneapolis housing metrics from July 2021 with July 2020.

Saint Paul Housing Market Trends 2021 (Describes City's Housing Stats)

According to Redfin, a real estate company, the St. Paul housing market is very competitive. Homes in St. Paul receive 7 offers on average. In August 2021, home prices in St. Paul were up 14.3 percent year over year, with a median price of $280K. Homes in St. Paul sell on average after 17 days on the market, down from 18 days last year. In August, 451 homes were sold, up from 439 last year.

Below is the latest report of the “St. Paul Housing Market” released by the Minneapolis Area REALTORS®. The report compares the St. Paul housing metrics from July 2021 with July 2020.

Minneapolis Metro Area Real Estate Market Forecast 2021-2022

The Minneapolis housing market is shaping up to continue the trend of the last few years as one of the hottest markets in the United States. It is also one of the hottest real estate markets for investing in rental properties. What are the Minneapolis real estate market predictions for 2021 & 2022? Let us look at the price trends recorded by Zillow over the past few years. Since Sep 2011, the typical home value in the Minneapolis-St. Paul-Bloomington Metro has appreciated by about 88.9% (Zillow Home Value Index).

Minneapolis metro area home values have gone up by 14% over the past year alone. There exists a limited supply of homes in Minneapolis, and buyers are forced to compete often resulting in higher prices and/or quicker sales that tend to benefit sellers. In other words, based on the last month’s key housing market indicators, 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.

• The typical home value of homes in Minneapolis-St. Paul-Bloomington Metro is $347,512, up 14% over the past year.
• Zillow predicts they will rise 10.6% in the next twelve months.
• Minneapolis home values have gone up 9.3% over the past year and will continue to rise in the next twelve months.
• Saint Paul's home values have gone up 12.7% over the past year and will continue to rise in the next twelve months.

While the effects of COVID-19 in the broader economy continue, real estate activity is beginning to recover across much of the country as well as in the state of Minnesota. According to Freddie Mac, mortgage rates have been below 3 percent since last year and are hovering near all-time lows, spurring strong interest by buyers. The real estate activity continues to strengthen in the Twin Cities region in this peak home-buying season.

In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero. In terms of months of supply, Minneapolis, or the entire twin cities housing market can become a buyer’s real estate market if the supply increases to more than five months of inventory. In any case, that isn't going to happen, at least not in the next twelve months.

This region (and entire Minnesota) is very much skewed to sellers due to persistent imbalance in supply and demand. Thus, the housing inventory continues to be constrained during what is expected to be an active summer selling season. This will push the home prices up at a faster pace.

For buyers in Minneapolis and the entire twin cities metro area, mortgage rates are at their lowest. Therefore, this is a good time for them to enter the market and scoop up their favorite deals. If buyer demand eases, we could see a positive influence on the low inventory of the Twin Cities region while at the same time seeing a negative impact on sales. Also, if listings linger on the market for longer, buyers have a special edge in negotiating sales prices.

As a result, buyers who enter the market at this should have more options than usual when it comes to choosing a property. So they should take advantage of scooping up their favorite deals which otherwise are taken away by seasoned investors in the bidding wars. Whether you’re looking to buy or sell, timing your local market is an important part of real estate investment.

Please do not make any real estate or financial decisions based solely on the information found within this article. Real estate market forecasts given in this article are just an educated guess and should not be considered financial advice. Many variables could potentially impact the value of a home in Minneapolis in 2021 (or any other market) and some of these variables are impossible to predict in advance. Real estate prices are deeply cyclical and much of it is dependent on factors you can’t control.

Minneapolis Real Estate Investment: Is It A Good Place For Investment?

Now that you know where Minneapolis is, you probably want to know why we’re recommending it to real estate investors. Is Minneapolis a Good Place Real Estate Investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead. We have already discussed the Minneapolis housing market forecast for answers on why to put resources into this market.

Let’s talk a bit about Minneapolis and the surrounding metro area before we discuss what lies ahead for investors and homebuyers. With a population of roughly 3.5 million, Minneapolis is the 16th largest metropolis in the United States. This city by the water is known for great cultural organizations that draw a diverse array of residents interested in the performing arts, theatre, music, and writing. Six Fortune 500 companies make their headquarters within the city limits of Minneapolis including Target and Pepsi Americas.

Minneapolis by itself is home to more than four hundred thousand people, making it the largest city in the state of Minnesota and the larger of the Twin Cities. The Twin Cities metro area includes more than three and a half million people, making it the sixteenth largest metro area in the U.S. and third largest in the Midwest. But unlike much of the Rust Belt, Minneapolis is going strong. This is but one reason to take another look at the Minneapolis housing market.

If you are a home buyer or an investor in the Twin Cities real estate market, you'd know that it has a track record of being one of the best long-term real estate investments in the U.S. through the last ten years or so. In fact, in the Midwest United States, the Minneapolis housing market ranks highest when it comes to a positive market outlook. Inventory is a significant problem throughout Minnesota. The twin city metro area is a strong seller's market due to a persistent shortage of housing supply.

Minneapolis has a mixture of owner-occupied and renter-occupied housing. One or two-bedroom single-family detached homes are the single most common housing type in Minneapolis, according to Neighborhoodscout.com. Other types of housing that are prevalent in Minneapolis include large apartment complexes or high-rise apartments ( 39.84%), duplexes, homes converted to apartments or other small apartment buildings ( 13.14%), and a few row houses and other attached homes ( 3.90%).

Single-family detached homes account for roughly 42.25% of Minneapolis's housing units. At the national level, single-family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single-family rental units. With 2020 being, theoretically, in the middle of a boom, there are still 4 years for residential construction to surge. Most likely, a housing shortage will remain in 2020, keeping home prices high.

In 2016 Minneapolis had moved into the top 20 emerging real estate markets in the country. It is one of the best places in the Midwest U.S. to invest in real estate. Minneapolis real estate has appreciated 31.09% over the last ten years, which is an average annual home appreciation rate of 2.74%, according to NeighborhoodScout.com. This puts Minneapolis in the top 20% nationally for real estate appreciation. Looking at just the latest twelve months, Minneapolis real estate appreciation rate has been at or slightly above the national average, at 5.03%.

The home prices in the Minneapolis housing market will be on an upswing all through 2021. So you should consider investing in Minneapolis rental properties sooner, to avoid higher home prices down the road. Let’s take a look at the number of positive things going on in the Minneapolis real estate market which can help investors who are keen to buy an investment property in this city.

Minneapolis' Strong Job Market

We touched on the strong Minneapolis job market. The Twin Cities job market has been revived by a wave of jobs in the life sciences, biotechnology, and medicine. This has helped to give workers in Minneapolis an average annual salary of six thousand dollars higher than the national average. The city even made a “The Ladders” list for cities with the most $100,000 plus jobs. That fuels the demand for the Minneapolis rental properties at the more expensive end of the market. Yet their location on the Mississippi River and other transit routes contribute to a diverse job ecosystem, where employers like 3G and General Mills maintain manufacturing and food processing hubs. People move here from across Minnesota in search of work, since their unemployment rate is consistently one full percentage point lower than the national average.

Minneapolis' Strong Demand for Housing

Housing markets can be large and declining – Detroit being a shining example, Minneapolis is notable for being a growing city, driving demand for properties in the Minneapolis real estate market. The population growth is driven by both migrations to the area by those seeking jobs and demographic momentum. This is why the Minneapolis housing market is expected to see home price appreciation this year despite the ongoing pandemic. The month's supply of housing inventory in Minneapolis, the twin cities region, and the entire state of Minnesota is very tight. This entire region is a strong seller's real estate market.

One of the defining features of older Rust Belt cities is that they’ve been heavily built up for decades. In the case of the Minneapolis housing market, geography and existing construction constrain the new housing supply. They can’t build on water or build-out in the direction of St. Paul. The city already has suburbs, but people don’t want to move too far out from the urban core where most jobs exist. This forces builders to tear down old buildings to bring new, denser development to the Minneapolis housing market. That is more expensive than building new homes on the farmland. All of this constrains new construction. It also explains why many houisng experts think home prices will rise in the next twelve months.

The Minneapolis Rental Market is Growing

The median sales price in Minneapolis is around $305,000 as of June 2020. It means you can buy several properties in the Minneapolis housing market for the cost of one home in a “hot” market like San Francisco or Los Angeles. The median rental price in Minneapolis is roughly $1,800. This is higher than the Minneapolis metro area rental rate of $1700. Given the appreciation seen in the Minneapolis real estate market, we can expect rental rates to increase faster than the rate of inflation because new construction isn’t going to meet demand.

The Minneapolis real estate market is affordable compared to several booming rental markets across the country. However, the fact remains that the rental market in Minneapolis is growing. Many would-be homebuyers cannot afford to buy their first home, so they have to rent. Students who stay to work compete with economic migrants and the children of locals.

Compounding the matter are the Millennials who watched parents lose homes in the 2007 housing bust and choose to rent though they could afford a home. This explains why the city’s share of the population that rents are growing. 55% of the households in Minneapolis, MN are renter-occupied while 44% are owner-occupied. And this trend will fuel demand for Minneapolis rental properties for years to come. More than 50% of the apartments can be rented for $1,500 or less.

Current Rental Statistics: As of September 9, 2021, the average rent for a 1-bedroom apartment in Minneapolis, MN is currently $1,180. This is a 9% decrease compared to the previous year. Over the past month, the average rent for a studio apartment in Minneapolis increased by 3% to $1,070. The average rent for a 1-bedroom apartment increased by 3% to $1,180, and the average rent for a 2-bedroom apartment increased by 8% to $1,670.

• The average rent for a 2-bedroom apartment in Minneapolis, MN is currently $1,670, an 14% decrease compared to the previous year.
• The average rent for a 3-bedroom apartment in Minneapolis, MN is currently $1,875, a 6% decrease compared to the previous year.
• The average rent for a 4-bedroom apartment in Minneapolis, MN is currently $2,200, flat compared to the previous year.

According to RENTCafé,  the average size for a Minneapolis, MN apartment is 786 square feet, but this number varies greatly depending on unit type, with cheap and luxury alternatives for houses and apartments alike. Studio apartments are the smallest and most affordable, 1-bedroom apartments are closer to the average, while 2-bedroom apartments and 3-bedroom apartments offer more generous square footage.

The most affordable neighborhoods for renting in Minneapolis are:

• Como, where the average rent goes for $595/month.
• Folwell, where renters pay $795/mo on average.
• Webber – Camden, where the average rent goes for $830/mo.
• University, where the average monthly rent is $468.

The Zumper Minneapolis Metro Area Report analyzed active listings in July 2021 across 8 metro cities to show the most and least expensive cities and cities with the fastest-growing rents. The Minnesota one-bedroom median rent was $1,122 last month. Maple Grove was the most expensive city with one-bedrooms priced at $1,360 while St. Paul & Roseville were tied as the most affordable city with one-bedrooms both priced at $1,100.

The best place to buy rental property is about finding growing markets. Cities like Maplewood & St. Paul are good for investors looking to get started with rental property ownership at an affordable price. These cities look good for rental property investment this year as rents are growing over there. These trends provide a macro look at the growing rental demand.

Each real estate market has its own unique supply-demand dynamics with unique neighborhoods that present their own opportunities for investors. Here are the best areas to invest in a rental property in the Minneapolis Metro Area in 2021. Most of these places have the same things in common, including rising rents and increasing property values.

The Fastest Growing Cities For Rents in Minneapolis Metro Area (Y/Y%)

• Bloomington had the fastest-growing rent, up 8.5% since this time last year.
• Maplewood was second with rent climbing 2.7%.
• Roseville saw rent increase 1.9%, making it third.

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

• Bloomington rent jumped 5% last month, making it the fastest-growing.
• St. Paul was second with rent increasing 3.8%.
• Roseville ranked third with rent growing 1.9%

The Massive Student Market

Any university creates an excellent opportunity for real estate investors. Every college brings in a large number of students who will need to rent a property close to the university. The rent students pay is based on demand for the school, not the state of the local economy. For investors targeting this niche, Minneapolis rental properties are a great addition to your investment portfolio because of the diverse opportunities this market provides. Because of the university, there are lots of students and activities and venues that specifically cater to the student population.

There are many colleges in Minneapolis itself. The University of Minnesota campuses in the area are some of the largest public university campuses in the US. Augsburg College hosts more than three thousand students. Smaller arts and technical colleges dot the town. Because so many colleges are in the middle of the city, downtown Minneapolis rental properties could be advertised to students at several schools. Then, if the local college of arts and design closes, you don’t have to worry about who else may rent the units.

The University area is very popular with young people and provides not only great nightlife and entertainment but plenty of parks and recreational facilities to enjoy during the day. Housing, from houses for rent to apartments and condos are affordable and near inexpensive restaurants, bars, cafes, and bookstores.

The Landlord-Friendliness of Minneapolis

Many states in the Midwest are more tenant-friendly than landlord-friendly. The Minneapolis housing market, though, is more landlord-friendly. There are limits on late fees, and interest is required on deposits. However, no rental license is required by the state, and there isn’t a grace period set in stone for late rental payments. You can protect your income from Minneapolis rental properties by evicting tenants not only for nonpayment of rent but committing illegal acts on the premises, staying after the lease has ended, and breach the lease. Just make sure the lease agreement says what actions constitute a breach of lease for which they could be evicted.

The (Relatively) Low Taxes in Minnesota

Houses in Minnesota face an average 1.19% property tax rate. This is very close to the national average of 1.21%. Wisconsin’s tax rate is in this same range, but their higher average property values mean they pay far more in property taxes than those in the cheaper Minneapolis real estate market. Minnesota’s reputation as a high tax state is driven by its higher sin taxes on alcohol and cigarettes and higher than the average sales tax rate. Neither of these affects most real estate investors. Its income taxes are thirteenth highs in the U.S., but it is a bargain compared to states like Illinois. Then again, Illinois has the second-highest property taxes in the country.

The Upward Long-Term Trajectory

Both Wisconsin and Minnesota are seeing growth while much of the Rust Belt deteriorates. However, Minnesota’s policies have led to faster job growth, wage growth, and population growth than Wisconsin. Yet the state has continued to rank well in rankings for quality of life. That makes the Minneapolis real estate market a better deal than the property is theoretically more business-friendly Wisconsin.

Maybe, you have done a bit of real estate investing in Minneapolis or the twin cities region 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. Should you consider Minneapolis real estate investment? Minneapolis offers an ideal mix of a strong job market, affordable real estate, a large rental market, and a limited housing supply. These factors will drive up property values and rental rates growing at a healthy clip for years. The entire twin cities region is a great place to invest in real estate.

Good cash flow from Minneapolis rental 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 Minneapolis in a growing neighborhood would be key to your success. When looking for real estate investment opportunities in Minneapolis or anywhere in the country, the generally accepted standard is to purchase a property that will give you a modest but minimum of 1% profit on your investment. An example would be: at $120,000 mortgage or investment cost, $1200 per month rental. That would be the ideal equation for example. Even with rent increases, buying a $500,000 investment property in Minneapolis is not going to get you $5000 per month on rent.

When looking for the best real estate investments in Minneapolis, you should focus on neighborhoods with relatively high population density and employment growth. Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable. The neighborhoods should be close to basic amenities, public services, schools, and shopping malls. A cheaper neighborhood in Minneapolis 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.

There are about 699 schools in Minneapolis—231 elementary schools, 176 middle schools, 202 high schools, and 90 private & charter schools. The Minneapolis school system offers a wide range of school choices, from charter schools to great public schools, to those specializing in STEM education. There are 264 neighborhoods in Minneapolis. Linden Hills has a median listing price of $613,500, making it the most expensive neighborhood. Jordan is the most affordable neighborhood in Minneapolis, with a median listing price of $177,000.

Some of the best or popular neighborhoods in Minneapolis are Calhoun-Isles, Camden, Northeast Park, Powderhorn, and Downtown East. Camden is located in the north corner of the city, on the east bank of the Mississippi, is composed of several small neighborhoods. It is one of Minneapolis' most diverse neighborhoods. There's a great mix of middle and working-class families and housing is rated as affordable.   Northeast Park is becoming popular with young people, provides affordable housing options for every budget. The area has a variety of residential areas, industrial areas and old mills, historic churches, established and new retail areas.

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

1. City Center
2. E Franklin Ave / Hiawatha Ave
3. S 8th St / 11Th Ave S
4. Central Ave SE / 1st Ave NE
5. E Lake St / 3rd Ave S
6. Jefferson St NE / 15th Ave NE
7. W 28th St / Lyndale Ave S
8. Hennepin Ave / Lyndale Ave S
9. University Ave NE / 17th Ave NE
10. Portland Ave / E 35th St

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 Minneapolis and the Twin Cities region.

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

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

The state shares a Lake Superior water border with Michigan and Wisconsin on the northeast. You can also invest in the Milwaukee, Wisconsin real estate market. Milwaukee is often written off as a rust belt city in decline. While it is an urban Midwest town that started to decline in the 1970s, it is seeing a kind of renaissance. Milwaukee metropolitan area is home to around 600,000 people. It hit its high of around 750,000 people in the 1960s before the population declined, but it is now a slow-growing city. The Milwaukee housing market is only going to see demand for homes grow as many Millenials continue to find work and try to start their own families. The area is attracting young adults, too, with 80% of those moving to the area saying it is because they came for a job.

Madison, Wisconsin is also good for real estate investment. Madison is often overlooked in favor of the largest city in Wisconsin, Milwaukee. Yet the city is both the state capitol and the second largest in the state. Madison, Wisconsin is home to roughly a quarter of a million people. However, the Madison housing market is much larger than this. Take suburbs into account, and the metro area is home to roughly 650,000 people. This metropolitan region is so large that it extends into parts of Iowa. There are many reasons to consider investing in Madison real estate.

To the south of Minnesota lies the neighboring state of Iowa. Davenport is a mid-sized real estate market in Iowa, home to around a hundred thousand people. However, Davenport is part of a larger ‘Quad Cities Metropolitan Area' that includes Davenport and Bettendorf in Iowa, and Rock Island, Moline, and East Moline in Illinois. Davenport is the third-most-populous city in Iowa. The Quad Cities region has a robust housing market, depending on which side of the river you land. There are several good reasons to invest in the Davenport Iowa real estate market.

Let us know other than the Twin Cities region which housing markets you consider best for real estate investing!

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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:

Market Reports & Forecasts
https://www.mplsrealtor.com/
http://maar.stats.10kresearch.com/reports/lmu
https://www.mnrealtor.com/buyers-sellers/marketreports
https://www.zillow.com/Minneapolis-mn/home-values
https://www.littlebighomes.com/real-estate-minneapolis.html
https://www.realtor.com/realestateandhomes-search/Minneapolis_MN/overview
https://www.neighborhoodscout.com/mn/minneapolis/real-estate

Foreclosures
http://maar.stats.10kresearch.com/docs/fss/2020-06/x/report?src=page
https://www.realtytrac.com/statsandtrends/mn/hennepin-county/minneapolis

Job Growth
https://realestate.usnews.com/places/minnesota/minneapolis-st-paul/jobs
https://www.theladders.com/career-advice/these-are-the-15-cities-with-the-most-100k-jobs-in-december-2018
https://www.jsonline.com/story/news/politics/2018/05/08/its-liberal-minnesota-vs-gop-wisconsin-study-economic-growth/590813002

Rental market | Landlord friendly
https://www.collegesimply.com/colleges-near/minnesota/minneapolis
https://www.avail.co/education/laws/minnesota-landlord-tenant-law
https://www.landlordology.com/10-cities-to-buy-rental-property
https://www.minnpost.com/economy/2018/02/why-it-s-extremely-difficult-buy-first-home-minnesota-right-now
https://www.minnpost.com/metro/2019/03/a-majority-of-minneapolis-households-now-rent-their-homes

Low Taxes
https://smartasset.com/taxes/minnesota-property-tax-calculator
https://www.usatoday.com/story/money/taxes/2018/04/06/states-highest-and-lowest-taxes-3-6/48294400