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18 Best Real Estate Investing Books For Beginners 2023

January 26, 2023 by Marco Santarelli

Best Real Estate Books on Investment

Best Real Estate Books

Real estate investments can provide excellent returns if the proper steps are taken, but many new investors lack the necessary skills and education. I wanted to discuss the significance of real estate education through books. This article will present the 18 best real estate investing books to get you started in 2023. If you read all of these books, you will gain a lot of knowledge and learn from the case studies of top investors who have had great success in real estate investing.

Are you a real estate investor? Are you planning to invest? Real estate investing is an ever-evolving industry. Real estate is regarded as one of the best investments that a person can make. But why do so many people struggle with it? The first step is to prepare your mind and habits for success. You will also require adequate real estate education to assist you along the way.

Why Should You Read the Best Real Estate Books as a Beginner in Investment?

Well, real estate investors disagree on many topics, but one that nearly all agree on is the necessity of investing in yourself. There are literally thousands of books out there that deal with real estate investing, and I've probably read a lot of them! These are my choices of good books on real estate investing for this year. What about you?

Reading books is one thing, but where do you start? To be successful as a new real estate investor, you need to learn but it can be hard to sift through all the books to choose from. Finding a good real estate book can be difficult, especially if you don't read a lot. So I've created this list and I felt I would give it to you in a way that breaks it down into several categories.

I want it to break it down into the following areas, mindset, finance, and investing real estate investing for beginners, which is really from beginners to intermediate level investors, and then real estate investing books to grow your business. So once you've gotten started just continue to grow and scale books on property management and books on taxes, or more specifically on how to save and minimize your taxes.

So that's essentially six categories. Now, keep in mind, this is not an exhaustive list. There are literally hundreds, if not thousands, but hundreds of books on real estate. In fact, if you don't believe me, just go to amazon.com and type in real estate investing or even just real estate. And you will see there are a lot of books and that's the problem. There are just too many books to choose from, and it's really hard to know which ones are good, great, or bad. And believe me, there are many bad books out there.

The other thing too, to keep in mind is that if you don't like reading, or if you're a slow reader, you can get the audiobook version of most, or probably all of these books that I have on the list today. So whether it's print or audio, there's something for you today. In fact, you could actually have both. You could read when you have the time to read and listen to the audiobook in the car, or when you're doing stuff around the house or going for a walk.

And last but not least, I will edit and continue to edit and add to this list from time to time. So it's a living, breathing dynamic list. It's not static, it's not a one size fits all list, but I wanted to pick what I felt were the best books for this list at this time. So with that, let's start with the first of the six categories and that is the mindset.

So I've tried to keep it to about anywhere from two to four books per category or section, it's probably an average of three books per section. And what I'm going to do is just tell you the book and give you a brief description of that book and what you can expect from it. And then you can just decide on your own, whether it's something you want to listen to or read. So the three books that I picked for mindset start with a classic, a perennial classic, and most people would think I'm going to say, Think and Grow Rich.

That is a great book. And I do recommend reading the classic, the original book, not the revised edition of it. If that's a book that you haven't read or it's been a long time and you probably should go back to reading it because Napoleon Hill's come out with a lot of great books and a lot of great content because he had access to some of the wealthiest people in the country back in the day.

18 Best Real Estate Investing Books For Beginners 2023

Below, you will find 18 of the best real estate investing books for beginners recommended by entrepreneurs and investors. Read these real estate books in 2023 to become successful in this business. These books are vital to get success in real estate. They will form the backbone of your success for years to come. These books are not just real estate specific, they will also help you develop a winning mindset.

1. The Richest Man in Babylon

Best Book To Read On Real Estate Investing

But my first pick is The Richest Man in Babylon. And again, this is the original edition that I'm referring to, not the edited or revised edition for the 21st century. Get the original text. The Richest Man in Babylon is based on Babylonian parables, and it has been hailed as the greatest of all inspirational works on the subject of thrift and financial planning, and personal wealth in simple language, these fascinating and informative stories in the book set you on a sure path to prosperity and it's accompanying joy.

So these are just great stories. It's not really a how-to book. It's more of a storybook than anything else, but it is a celebrated bestseller. And it often offers an understanding and a solution to most people's personal financial problems, whether they know it or not, it identifies what your problems are, but revealed inside of the book are the secrets to acquiring money, keeping the money, and making money, earn more money for you, which really parallels perfectly with what I talk about all the time.

And that is the three categories, buckets, or areas of creating wealth. And that makes money, grows your money and protects your money. So anyway, stick to the original edition. It is the original uncensored version of the book, the language of the content, and the message from the author. George S Clason, I believe that's how you pronounce his last name.

2. The Compound Effect: Jumpstart Your Income, Your Life, Your Success

Best Real Estate Investing Books to Read in 2021

And this book was actually written in 1926. So it's way back there. In fact, it's even before Napoleon Hill's Think and Grow Rich. Now, fast-forward to the recent past as in the 21st century, the next book I'm sure many of you are familiar with, but probably most of you are not a book by Darren Hardy called The Compound Effect: Jumpstart Your Income, Your Life, Your Success.

This book reveals the core principles that drive success and The Compound Effect book contains the essence of what every super achiever needs to know practice and master to obtain those extraordinary results, extraordinary success. So in this book, they talk about things like how to win almost every time, the number one strategy to achieve any goal and triumph over your competition.

It really is a book to help separate and differentiate yourself. It talks about eradicating bad habits and we all have bad habits. And often those derail your progress. It talks about the real lasting keys to motivation, kind of like what Tony Robbins talks about, but more so. And that is how to get yourself to do things you don't feel like doing.

And I know we're all there at various times of the day, the week, the month, how to capture that elusive awesome force of momentum. Because once you get going, you feel like you want to keep going. You don't want to stop because once you get going, it's almost hard to stop, and talks about many other things and something he refers to as the acceleration secrets of super achievers.

So The Compound Effect has a great title because small successes compounding on small successes lead to larger successes, which continue to compound on themselves. And so once you have that momentum, it continues to grow. But if you're serious about living an extraordinary life, then read this book. It will help to create the success that you desire.

3. High Performance Habits

Best Real Estate Investing Books to Read in 2021

My third book pick here is from Brendon Burchard, someone who I had on the show, not too long ago, I think it was about a year, year, and a half ago. Great guy. In fact, our interview went so long. I had to split that episode into two parts. So you could look for that episode. And I believe it was called High-Performance Habits, which happens to be about the book that he wrote.

One of his last books is called High Performance Habits. How extraordinary people become that way. So 20 years ago, or so Brendan became obsessed with answering three questions. He wanted to know why do some individuals and teams succeed quickly more quickly than others, and actually sustain that success over the long term. You wanted to find out of those people who actually pull it off, why are some miserable?

And then the other group are consistently happy on their journey. And thirdly, you wanted to know what motivates people to reach for higher levels of success in the first place. And then what practices help them improve the most. So after doing some extensive, original research that he does in his own company, and after a decade, as the world's leading high performance, coach Brandon found the answers to these three questions.

And it turns out that just six deliberate habits give you that edge. Now he says that anyone can practice these habits. And when they do extraordinary things happen in their lives, in their relationships, in their careers, it really is a good book. It is definitely well worth reading regardless of what you do in terms of your job or career, business, or practice. It really is a book on becoming a high performer. And to become a high performer, you must seek clarity.

Clarity is so critically important. You have to know how to generate energy. You have to know how to raise necessities, increase your productivity, develop influence, and then lastly demonstrate courage. And this is what he talks about in the book. So it's really the art and the science of how to do it all. And that's what you're going to learn by reading this book or listening to the audio.

So those are my three picks and believe me in this category about mindset, literally, there are over a thousand books. I mean, there is so much out there from Brian, Tracy to Tony Robbins and you name it. But these three are, I think very, very fundamental. In fact, I would argue that they are cornerstone books, The Richest Man in Babylon, The Compound Effect, and High-Performance Habits will improve and change your life. Okay. That's the first category.

The second category is finance and investing. And again, this is one of those sections where there are literally hundreds of books. And again, it's hard to narrow it down, but it wasn't too hard for me to pick. What I feel are probably the three cornerstone books, regardless of how experienced you are how much, you know, how seasoned you are, or how wealthy you are.

Because the fundamentals and the principles found in these three next books are great as a refresher. I'm sure you're going to read it. And there are things that you never knew before, and it's just great additional knowledge.

4. Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!

Best Real Estate Books 2021

So the first one is probably no surprise to anybody. I'm sure most of you have read this at some point in the last 22 years, it's been that long, but many of you know of it. So it is Rich Dad, Poor Dad, what the rich teach their kids about money that the poor and middle class do not buy. Obviously, Robert Kiyosaki, this book has since become the number one personal finance book of all time.

It's been translated into dozens of languages and it's been sold all around the world. I'm not even sure how many millions of copies this book has sold, but it has become a modern-day classic finance classic. So Rich Dad, Poor Dad is Robert's story of growing up with two dads, his real father and the father of his best friend, his rich dad.

And it talks about how both of these men, his fathers shaped his thoughts about money and investing. So the book explodes the myth that you need to earn a high income, to be rich and explains the difference between working for money and having money work for you. And that's a key distinction.

And a lot of the book builds upon that concept, but the book is great because it challenges the belief that your house is an asset, which most people still believe to this day. It is not, it is a liability. And if you don't know why to read the book, it shows why parents rely on the school system to teach their kids about money and why that's a mistake in that.

Doesn't actually work. It defines once and for all, what an asset and a liability truly are. It makes simple definitions for this stuff. And it teaches you what to teach your kids about money for their future. So if you're a parent listening to this and you want to help your children become financially literate and increase their financial IQ, this is a foundational book. It's one of the starting books if you will.

5. Rich Dad's Cashflow Quadrant: Rich Dad's Guide to Financial Freedom

Real Estate Books

So the second book, no surprise is going to be the second book in what is essentially a three-part series of the Rich Dad series of books. These are the three foundational books, but the second book is Rich Dad's Cashflow Quadrant: Rich Dad's Guide to Financial Freedom. This was the second book. So rich dad's cash flow quadrant is a guide to financial freedom.

It picks up where the last book left off first book, rich dad, poor dad. So as the second book in the rich dad series, reveals how some people work less, earn more, pay less in taxes, and learn to become financially free. So cash flow quadrant was written for those people who are ready to move beyond what they feel is job security.

And I say that in air quotes and enter the world of financial freedom. It's for those people who want to make significant changes in their lives and take control of their financial future because this is more of the how-to Rich Dad, Poor Dad was more of the foundational book, kind of laid out the principles and the concepts and some of the definitions that you need to know such as a profit and loss statement, a balance sheet, how money flows and all that, this builds on top of that.

Robert believes that the reason most people struggle financially is that they've spent years in school, but we're never taught about money. And Robert's rich. Dad taught him that this lack of financial education is why so many people work so hard. All their lives it's to work for money, instead of learning how to make money work for them, they basically just work for money.

So this book will change the way you think about your job, your career, owning your own business. And hopefully, it will inspire you to learn these rules of money that the rich use all the time to build and grow their wealth.

6. Rich Dad's Guide to Investing: What the Rich Invest in, That the Poor and the Middle-Class Do Not

Best Real Estate Books

The third book again, no surprises. It's not going to be a shocker. It's really the third book in that rich dad series. And these books work well together. They're built to be stacked on top of each other. So the third book is Rich Dad's Guide to Investing: What the Rich Invest in, That the Poor and the Middle-Class Do Not. So investing obviously means some different things to different people.

And there is a huge between passive investing and becoming an actively engaged investor. And one is not better than the other. There's no right or wrong. We're both at different times in our lives. And it also depends on what we're actually doing. We're always going to be active or passive investors.

Usually, we're both, but you just need to understand the distinction there, becoming an active investor means you're an engaged investor. And so there's a lot of power in that. So rich dad's guide to investing is one of the three core titles in this series. And it covers the basic rules of investing, how to reduce your risk in investing, how to convert that earned income you get from your active job or career, and turn that into passive income.

And he talks about something he refers to as rich dad's 10 investor controls. And this is where he gets into the weeds gets deep into the concepts of investing. So the rich dad philosophy makes a key distinction between managing your money and growing it and understanding the key principles of investing is the first step towards creating and growing wealth.

So this book delivers guidance. You need to help begin that process of becoming an investor and stay on that road till you get to that point of financial freedom. It's really more of a guide. In fact, the title says it is all rich dad's guide to investing. All right, well, those are the three books in the finance and investing category, and it's really the trio, the three rich dad series books, the initial or the original books.

7. The Ultimate Guide to Passive Real Estate Investing

Best Book on Passive Real Estate Investing

Now let's talk about real estate investing for beginners. So this was a little bit challenging for me. In this category, I ultimately decided on four bucks instead of three for this now keep in mind, even though I'm calling it real estate investing for beginners, these books apply to almost everybody. Even if you are a seasoned or an experienced investor, there's a lot of stuff you can learn from these books.

If not every chapter, certainly some of the chapters in these books and the first one is really not a book at all. In fact, it is my ebook that has been a free download on our websites for the last probably 10 years, which has been downloaded literally tens of thousands of times. And I wrote this 40, 42-page ebook as a primer for people to understand the key concepts and key components of investing in real estate, leaning towards passive investing, meaning buy and hold, not flipping real estate, or to actively involved.

It's really about building a portfolio, creating wealth, creating passive income, and learning the fundamental key pieces. So it is really a great primer. So you read it, it's a great starting point, but then you build on top of it with these other books. So The Ultimate Guide to Passive Real Estate Investing the free download on our website is really about the most powerful way to accumulate wealth.

This guide that I wrote has been written to help educate all real estate investors, regardless of their experience level. And again, it's a primer. It talks about the advantages of income-generating real estate, how to analyze properties, key metrics, cash flow returns, what to look for in the quick test to see if a deal is worth even pursuing.

So it's kind of like the smell test, if you will, how to choose some of the best markets and neighborhoods. I try to pack it all in there. There's no fluff. It's just crammed with good information. So if you haven't downloaded a copy or read it, go ahead and do so. I'm going to be updating that soon to kind of a version 2.0, so I'll expand on it a little bit. And I'll just tighten up a few things in there based on today's economy and environment, but not much has changed because principles don't change. All right.

8. How to Invest in Real Estate: The Ultimate Beginner's Guide to Getting Started

Best Real Estate Investing Book

The second book in the real estate investing for beginners series here is How to Invest in Real Estate: The Ultimate Beginner's Guide to Getting Started. This book was written by Brandon Turner. He's got several books. I've picked a couple of his and this book is great if you're starting and good if you're a moderate level investor.

So everyone knows that real estate investing can be a powerful way to build wealth and achieve true financial freedom. But because each person's journey is going to be a little different knowing the first steps to take is challenging for some people. So what this book does, it becomes a manual of sorts on getting started in real estate investing.

It gives you essentially an insider's look at the many different niches and strategies that exist. So it's not all about passive real estate investing. It's got a little bit of everything and it just kind of help to paint pictures. In other words, it shows you the landscape and then you can choose your path.

So what you can do is find which strategy and path work best for you, and then help you build the resources and the goals around that. Unlike most real estate books, this one won't tell you that there's any one secret path, okay. It is considered by many one of the best books on real estate investing.

9. The ABCs of Real Estate Investing: The Secrets of Finding Hidden Profits, Most Investors Miss

Best Real Estate Books

There's more than one path to success in real estate, but it has more than 40 real-life stories in the book from other investors on how they achieve success in real estate investing. And I'm sure you're going to be able to relate to many of those stories. There are a lot of similarities, but there are differences between every person and every story.

All right, the next book, the third book, if you will, is The ABCs of Real Estate Investing: The Secrets of Finding Hidden Profits, Most Investors Miss. And this is by one of the rich dad advisors, Ken McElroy. He is a sharp guy. You know, I've talked to him in the past. I've had him on the show at one point and you know, I like his content. Now he's really a big real estate guy.

He's focused primarily on big multi-family apartment complexes, but he did start with, you know, small real estate, single-family homes. And that doesn't mean that there's a migration path here. Some people will start with, you know, multi-units and apartments and work their way down to single families, duplexes, and fourplexes, and other people do the other way around.

And while other people just stick with one and stay with it. So you can create wealth and passive income with every size and type of real estate. But with his book on the ABCs of real estate investing, he kind of geared it more towards the people who are just getting started in the beginners and just real estate investing.

Think of it like real estate investing one Oh one, but he talks about things on achieving wealth and cash flow using real estate. You know, what a property is potential is how to unlock the myths that float around real estate for people who are seasoned, how to negotiate deals, evaluate properties and the purchase price, how to increase the income on a property, and ways to properly manage a property.

10. Long-Distance Real Estate Investing

Real Estate Investing Books

Now he doesn't get into property management in any depth in this book, it just touches upon it. He actually has another book on that topic, which I'll talk about here in a minute. And then the fourth, if you will, fourth and last book in this category is Long-Distance Real Estate Investing. Now I love that title. He doesn't get too deep into it, but it is a good book. It's by David Green.

It's one of the bigger pockets series books. But you know, what he talks about is living in a hot market or a market that's not suited for buying hold investing because it's just unaffordable too expensive. The numbers don't work, whatever the case is, but he poses the question. Well, how do I take advantage of building wealth in real estate? When I live in a market that I can't invest in, it's impossible, or how do I avoid, you know, market fluctuations or the next market crash.

So we know real estate investing is one of the greatest vehicles for creating wealth, but you need to understand how to choose markets and be able to be nimble and agnostic. And this is stuff I talk about on the podcast all the time, and this is what he talks about in the book. I just wish he would get more deep into the concept of done for you and rent, ready properties, and turnkey properties.

He touches upon it. But to be completely honest with you guys, I have always found since the beginning of bigger pockets in 2007, they've always had a bias towards turnkey, real estate investing, and passive real estate investing in general. They are certainly of the active, real estate investing flavor. They certainly believe in buying, fixing, and creating value on properties.

It seems that to me, that most, if not all of their content, either excludes conversations about turnkey investing, buying properties that are essentially rent-ready. So you don't have to do any fix-up or renovation work. They're all about putting in sweat equity to create value. That's fine, but that's not for everybody. And we all know that a lot of us are busy. We don't want to go down that road.

We just want to invest in real estate and build a portfolio and let it grow over time. So I'm not knocking the book. The book is good. I just wish he had more on the topic of passive real estate, investing, turnkey, real estate, investing, and done for you models instead of hiring a team outside of your local market to essentially do all the grunt work, swinging the hammers, and everything else, that's fine.

But I think he glosses over a little too much. In fact, all the “Bigger Pockets” books gloss over the turnkey space. So in this book, real estate investor and police officer David Green, shows you how he's built a multi-million dollar portfolio through buying, managing, and flipping out of state properties. So keep that in mind when you read it, but he does share tips, tricks, and systems that he's put in place over the years of his real estate investing experience and journey and what he's done to essentially succeed and avoid making mistakes along the way, but just realize that's the perspective.

Anyway, the bottom line with this book, and what I like to talk about all the time is to don't let your location dictate your financial freedom, learn how to succeed regardless of where you live and where you invest, choose the right markets, the right neighborhoods, the right properties, and have the right team around you. And that will be a secret if you will, or a formula to your success.

11. The Millionaire Real Estate Investor

Best Books For Real Estate Investors

All right, the next category is real estate investing to grow. So this is kind of the next level up. One of my favorite books that I read in real estate investing is The Millionaire Real Estate Investor by Gary Keller, Gary Keller well-known author. He is obviously the founder of Keller Williams, the real estate brokerage nationwide real estate brokerage. So he is a real estate investor and a very good one.

Anyone who seeks financial wealth first needs to learn the fundamental truths and models that drive it. And this is what he talks about in the book. So the millionaire real estate investor represents the collected wisdom and experience of over a hundred millionaire investors from all walks of life who have pursued financial wealth and achieved it through real estate.

And so what he did is he basically created this book in a straightforward, no-nonsense way that reveals the strategies that these hundred millionaire investors have used to create financial freedom, independence, and a lifestyle that works for them. So this book essentially is a handbook that has tried and true financial wealth-building principles and models built around real estate that reward your patience and perseverance, and he lays it out.

So some of the things he talks about are the myths about money and investing and especially the ones that hold people back and really how to develop a mindset of a millionaire investor, which goes back full circle to where we began about mindset. You know, even when he talks about this in the beginning part of the book, he talks about how to develop sound criteria for identifying great real estate investment opportunities, how to zero in on key terms and parts of transactions and achieve the best possible deals when you're putting a deal together or looking for a deal.

He also talks about how to develop your dream team, which is something I talk about often proven models and strategies that millionaire investors use to track their net worth understand finances. It's not a very complex or complicated book. It's not going to put you to sleep or cause your eyes to glaze over.

12. The Book on Rental Property Investing

Best Book on Rental Property Investing

I think it's extremely well-written. So again, it's one of my favorite books. It's a blue and white book. The next book in this category on real estate investing to grow is The Book on Rental Property Investing. Again, this one is the second one by Brandon Turner. So in this book, he discusses practical strategies that investors around the world use to build significant cash flow with their rental properties. So this is getting a little bit more into the weeds, a little bit more tactical if you will.

So in this book, you'll learn how to build an achievable plan, how to find good deals, how to analyze those properties and those deals build your team, finance, the rentals, and a whole bunch more, and basically everything you need to become successful at rental property investing. Again, it's a book there's only so much you can put in the book, but it does a good job of laying it out. This is one of the best books on real estate investing. This book will feed what you need to succeed in rental property investing.

13. Advanced Guide to Real Estate Investing: How to Identify the Hottest Markets and Secure the Best Deals 

Best Guide on Real Estate Investing 2021

Okay. So again, think of it like a, a, a practical guide. So there's a lot that he covers in this book, but you know, he starts with why real estate investors fail and how you ensure that you don't. And he talks about four easy-to-follow strategies that you can build your real estate portfolio on creative tips to find those deals, how to achieve success by avoiding property management, which, you know, we all love actionable ideas on financing.

Those rentals. Now, obviously, there are limitations there, but for the most part, it's going to be cheap financings like conventional loans and a little bit of advice on keeping your wealth by deferring and eliminating your taxes, which you know, is really not an extensive part of the book, but essentially something we'll talk about here in a minute last but not least. I included another book by Ken McElroy, and this is the Advanced Guide to Real Estate Investing: How to Identify the Hottest Markets and Secure the Best Deals.

So if you're interested in the real estate investing space, you may have noticed that this part of real estate doesn't get covered much. And when it does the mainstream media focuses mostly on, you know, stocks, bonds, mutual funds, and that kind of stuff. And they don't really talk about real estate as an investment, all that much. It's really about homeownership.

And even when they do talk about it, it's like, Oh, it's like this one, nebulous bob, they refer to as the housing market, but they don't really talk about specific markets unless you're listening to your local news channel, but that's because financial publications, TV, radio, um, they make the bulk of their money from advertising paid by the very companies who provide the mainstream media and those channels with financial services, the advertising, the marketing, all that stuff.

But real estate investment is something that you can do on your own without a large amount of money upfront, as we all know if you just learn how to do it and pick the right markets to do that. So what Ken did with this book is he picked up where he left off in the first book, the best-selling book, ABCs of real estate investing.  And he reveals the next essential lessons and the information that you need as an investor to succeed and continue to scale and grow your business.

So he built on the foundation of the first book, which is kind of like real estate investing one-on-one and he talks more about how to think and operate like a real estate mogul. How do identify and close expert deals, you know, differences between single multi-family property surrounding yourself with the right team to maximize your money, avoid paying thousands in taxes, by structuring property sales wisely? This is a kind of asset protection and tax strategy combined, and last but not least important projections about the future of real estate investing. Now, this book is a few years old, so, you know, I'm sure some things have changed.

14. TheABCs of Property Management: What You Need to Know to Maximize Your Money Now

Best Real Estate Book on Property Management

I don't think Ken was expecting the amount of appreciation that we would have seen over the last two, three years and the lack of inventory. So it kind of compounds what he talks about. The next section is about property management. And so again, Ken wrote a third book on this subject because this is where he actually started his real estate career as a property manager.

And so his book is The ABCs of Property Management: What You Need to Know to Maximize Your Money Now. So as you start to invest and you build your portfolio, the question comes up, you know, how are you going to make it as profitable as possible? And how will you maximize its potential and make it grow in value? And the one word he has for this is management.

Now that doesn't mean you managing the property, although you could, if you want it to, there's nothing wrong with that. And it's probably good to understand how to manage your property, but if you're managing your managers, this is good information. So this book can reveal the key to his success, and that is exceptional property management.

So he teaches you the most important principles and the keys to achieving success, where other people fail, which is often in the management of their properties. So he talks about things like how to decide, you know when to manage your property and went to hire someone, to do it, how to implement the right systems.

If you're doing it yourself structures for your investment, how to manage and maximize cash flow, you know what to expect, essentially it's the life of an owner-manager and how to find the right property manager and avoid the wrong ones. So I think this is a good book as a frame of reference, whether you manage or you don't.

15. The Book on Managing Rental Properties

Best Real Estate Book on Managing Rental Properties in 2021

The second book is if you choose to manage your own properties, it's another book by Brandon Turner called The Book on Managing Rental Properties,  a proven system for finding, screening, and managing tenants with fewer headaches and maximum profits. This is definitely a book for a do-it-yourself. So if you want to manage your own properties, even if it's just one or you already manage your properties, this might be a good supplement to that.

So no matter how great, you know, you are at finding real estate deals, if you, I don't want to manage your properties well or correctly, you're obviously leaving money on the table, or you're not maximizing your returns. Brandon likes to say that being a landlord can be fun, but only if you do it right. So learning to effectively manage your tenants means that you end up with more freedom, less drama, higher profits from your real estate business.

And it just ends up looking good, feeling good. So Brandon's a, you know, an experienced property manager, he's been managing his own properties for a long time. And what he does in this book is essential takes you on an insightful tour of their management business there as in, you know, him and his wife. So you can learn how they've been able to maximize profit, minimize their stress.

He says that he has a blast doing it. So I guess you can learn how to do that too. But he talks a lot about his personal stories of the mistakes that they've had, and that you can learn from. And he talks about the different tools and tricks and systems that they've put in place over the years. And the book probably will change the way you think about property management altogether.

So there's a lot of stuff he covers in the book. I think it's more than a beginner's book. It's certainly a primer, but it has some advanced content. So overall I think it's great. And last but not least taxes, you know, the thing we want to defer or eliminate as much as possible. So I have three book picks here. There are many books out there on taxes, but I think these are great fundamental books.

And really what I've tried to do again, is boil it down to the best two, three, or four books in each section that will give you everything. You need, the nuts bolts strategies, tactical plans, and not leave you hanging. So the three books I chose for the area of taxes is first and foremost, the book by Tom Wheelwright, another one of Robert Kiyosaki's rich dad advisors, great guy, super smart. I've had him on the show several times. Always have great episodes talking to Tom, but his book, which he just revised recently.

16. Tax-Free Wealth: How to Build Massive Wealth by Permanently Lowering Your Taxes

Best Real Estate Books on Taxes

So it's the newly revised version, but it's called Tax-Free Wealth: How to Build Massive Wealth by Permanently Lowering Your Taxes, what a great title. So I will say that this book is slanted a little bit more toward business owners and entrepreneurs, but it applies to anybody and everybody because if you pay taxes in any way, shape, or form, you're going to learn something or you can learn something from this book.

So tax-free wealth is about tax planning, concepts, and how to use the tax laws to your benefit. So Tom explains how the tax laws work and how they are designed to actually reduce your taxes, not increase them. The key here is to understand how taxes and tax law works. So the book explains how to use the tax laws to your advantage, and in ways that will support your vision and growth plans, not only for your company or your business, but you know, for your investing empire as well, however, that is structured and you know, more specifically real estate.

17. The Book on Tax Strategies for the Savvy Real Estate Investor

Best Real Estate Book on Tax Strategies for the Savvy Real Estate Investor

So once you understand the basic principles of tax reduction, then you can immediately reduce your taxes to the point where eventually you may be able to legally eliminate and contactless and drastically reduce your taxes overall. And he talks about this in the book. So it's about minimizing, eliminating, and deferring your taxes.

Those are the three things he talks about in the book. Now, once you get through that, there are two books specifically on real estate investing, as it relates to taxes. And the first one is The Book on Tax Strategies for the Savvy Real Estate Investor. The subtitle to this book is powerful techniques.

Anyone can use it to deduct more, invest martyrs, and pay far less to the IRS. The book was written by Amanda Hahn. She actually lives in Orange County here, not too far from Ireland. And what she talks about is ways to maximize your deductions for your real estate business.

18. The Book on Advanced Tax Strategies: Cracking the Code for Savvy Real Estate Investors

Best Real Estate Book on Cracking the Code for Savvy Real Estate Investors

And they also talk about practicals on how to minimize your taxes, not only for this year but in future years, as well as ongoing strategies that will make your next tax season that much easier. So what they want to do is basically help you save thousands of dollars by having great tax strategies in place.

So they talk about creative methods to maximize your deductions, clever ways to write off your kids' strategies, to write off every penny on your travel tips and tricks to cut down on bookkeeping time, and simple procedures that will protect you from IRS audits. So that's their first book, the foundational book, there's a lot in that book, but then they wrote a sequel to it, which is my third book in this category of taxes again by Amanda Hahn.

And this is The Book on Advanced Tax Strategies: Cracking the Code for Savvy Real Estate Investors. And you know, what they say is that when it comes to taxes, it's not about how much money you make, but how much money you actually keep. So if you're tired of working hard all year, just to lose, you know, the largest chunk of that money that you earned to the IRS, then, you know, obviously you want to learn as much as you can about taxes, you know, believe it or not.

The US tax system is filled with loopholes designed specifically to benefit real estate investors. And this actually got better in 2017 with the new tax act that was put into play under the Trump administration. So what was great as far as tax benefits for investors and real estate investors actually got even better with that tax act. So this book is a comprehensive follow-up to the book on tax strategies, which was a best-selling book by Han and Matthew McFarland.

And this just brings you more strategies to slash your taxes and turn your real estate investments into a tax-saving machine. And, you know, again, this book just goes deeper into a lot of the stuff from 10 31 exchanges to taking advantage of opportunity zone, tax benefits, how to supercharge your nest egg with self-directed investment strategies, steps to use your rental properties to legally wipe out your taxable income.

What else did they talk about in their ways to take advantage of the tax reform benefits that came about with all your real estate deals, accelerating your depreciation, and even common retirement and investment tax traps, and really how to avoid those? So, you know, people sometimes make the mistake of investing in their retirement account and then only find out that, you know, they've made a mistake. They don't have any tax benefits or maybe are not liable for tax penalties because they did it wrong.

Here's another blog that you can read – 12 Books to Read if You Want to Get Rich.

Filed Under: General Real Estate, Getting Started, Real Estate Investing, Selling Real Estate Tagged With: Best Real Estate Books, Best Real Estate Investing Books, Real Estate Books, Real Estate Investing Books For Beginners

When is the Best Time to Buy a House?

December 22, 2022 by Marco Santarelli

Best Time to Buy a House

The best time to buy a house this year has probably passed. It was a week in the early fall which represents a balanced view of market conditions favorable for buyers. Nationally, the best time to buy in 2022 was the week of September 25 to October 1. It can still be a good time to buy a home only if you can afford it. Many families are having affordability issues due to rising mortgage rates, and the problem is only likely to worsen if the Federal Reserve continues to raise rates – something that many analysts say is likely to occur again.

The Fed has now hiked rates at six straight meetings, something it hasn’t done since 2005. According to an analysis by the real estate listings website Realtor.com, the best time to buy a house was in the last week of September. This was the result of an optimal mix of housing market variables that give buyers the upper hand, such as lower pricing, greater inventory, less competition, and more time to make decisions.

As summer came to an end, inventory increased, price rise slowed, time on the market began to level off, and price reductions increased, indicating that this year's homebuying will follow a more regular pattern, which may be greater than usual given the cyclical rebalancing that is also taking place. Buyers, on the other hand, continue to experience the effects of uncertain economic conditions.

Affordability issues confront potential purchasers, paving the stage for the latest real estate makeover. Regardless, the regular seasonal tendency, along with an already cooling market, will favor persistent, knowledgeable buyers who are ready to buy. Realtor.com had anticipated that the final week of September in 2022 might see roughly 50 percent more active listings than the average for the remainder of the year.

In addition, buyers could save more than $20,000 on a median-priced home compared to those who purchased during the housing market's peak in the summer, when a median-priced home cost $450,000. During that period, the demand is normally 8.5% lower than a regular week, and homes remain on the market for approximately one week longer than usual.

Additionally, there are more price reductions than usual. Realtor.com’s experts attribute these changes in the market to seasonal factors. Not only do kids return to school in the fall, but the weather also cools off, making showings and inspections harder to conduct. (Plus, the cold reduces curb appeal.) As a result, demand drops.

According to Redfin's analysis, during the four weeks ending September 4, home-viewing activity plummeted, while the proportion of sellers lowering their prices remained at record levels. As a result of declining demand, fewer homes were sold for more than the asking price since February 2021, and the average sale-to-list price ratio reached its lowest point since March 2021. Hence, that was probably the best time to buy a house this year as the housing market always cools down.

Following a year and a half in which the average property sold for more than its list price, the average home sold for 0.3% less than its list price during the four weeks ending September 4. The winter of 2022 is expected to be colder than usual, with mortgage rates near or even above 7% as of November 17, 2022.

It's no secret that rising mortgage rates have made buying a home more difficult, even as price growth has slowed. The Fed is likely to continue the tightening cycle of raising interest rates, keeping mortgage rates higher. If low home prices are your top priority, consider delaying your purchase until later in the winter, as prices tend to decrease as the holiday season approaches.

Observe mortgage rates to ensure that your patience pays off and that rising mortgage rates do not derail your plan for a lower monthly payment. Whatever your priority, get to know your local market by spending time looking at homes in your desired area and setting up price alerts so you are notified when a home that meets your criteria hits the market.

Why the End of September Was the Best Time to Buy a House?

This week historically favors buyers the most. High inventory, below-peak prices, decreasing demand, and a more controlled market tempo. School and weather schedules contribute to this seasonal slowdown. Families looking to move while kids are out of school look to close on a home before the back-to-school rush.

Families centering house search decisions around school districts and the school calendar, plus warmer weather that makes home showings and inspections simpler and foliage that boosts curb appeal, contributes to an expected rise in activity. As fall approaches and more families bow out due to school, demand wanes and prices drop as leftover inventory stays on the market. Early fall is a good time to buy a house since they have more alternatives at a lower price.

Some of the largest housing markets in the country have their local best time to buy a house. The week of September 11-17 was the best time to buy for New York, Los Angeles, Chicago, Seattle, and Minneapolis metropolitan areas, among others. Each of these strikes a different balance of market factors during this week as it relates to buyers.

In New York and Los Angeles, homes on the market during this time take 30.3% longer to sell, on average, compared to their respective seasonal peaks when homes sell fastest. Buyers who feel intimidated or frustrated by the blistering pace of sales earlier this year may find the market more approachable as autumn approaches.

More Homes for Sale Were Listed

Inventory rises early fall. This year, inventory remained high through the best buying week. In the last week of September, the listings were expected to be 9.5% more than average and 12.9% more than at the start of the year. 2022 is an outlier compared to previous years since higher mortgage rates dampened buyer desire. Adjusting for this trend, the last week in September was expected to see 46% more active listings than this year's average. Around 780,000 listings during that period, which is around 400,000 more than in late February.

Less Competition From Other Buyers

During the best time to buy a house, homebuyers will have less competition. Pre-pandemic, July had peak homebuyer demand, as indicated by Realtor.com views. As buyers rushed to beat rising prices and borrowing rates, the 2021 housing market peaked in the spring. Spring and summer have the most home buyers, which means more competition for buyers.

Historically, demand is 26.9% lower during the Best Week to Buy and 8.5% lower than the average week. The advantage for home buyers during that time was likely to be at least as good this year as high prices and mortgage rates continue to reduce buyer purchasing power. The best week to buy a house also helps people who need extra time to decide.

The year's best week slowed by 21.1% from its peak. With a peak market pace of just 31 days in May, based on seasonal trends and a cooling market, the end of September was added about a week to the time a typical home spent on the market this year, and more than two weeks more than the peak this May.

More Price Reductions Were Expected

The best time to buy a house is also one of the busiest weeks for price reductions throughout the year, with an average of 5.2% of houses experiencing price reductions that week in the past. However, due to the recent market change, 2022's Best Week was expected to see more than 6.0% of properties with lowered prices. Based on inventory projections, it was expected to result in approximately 48,000 price decreases this week across the country.

It translates to a monthly price reduction share of approximately 24.8% caused by a combination of buyers exiting the market, which reduces demand, as well as a buildup of inventory over the year. This year, the number of purchasers exiting the market is significantly more than in previous years, which means that even more sellers lowered their house prices to attract buyer attention.

Housing Markets Where the Best Time to Buy was Sept 11-17

Metro Active Listings vs Avg Views Per Property vs Peak Days on Market vs Peak Median Listing Price vs Peak New Listings vs Avg Price Reductions vs Avg
New York-Newark-Jersey City, NY-NJ-PA 8.2% -25.6% +15 days -4.3% 12.8% 0.4%
Los Angeles-Long Beach-Anaheim, CA 14.4% -31.4% +10 days -6.2% -3.0% 0.9%
Chicago-Naperville-Elgin, IL-IN-WI 16.6% -32.3% +9 days -6.5% 1.1% 1.2%
Seattle-Tacoma-Bellevue, WA 32.0% -47.6% +21 days -7.0% 12.5% 1.9%
Minneapolis-S. Paul-Bloomington, MN-WI 27.2% -34.2% +7 days -9.9% 12.4% 2.2%
St. Louis, MO-IL 12.2% -24.6% +10 days -5.1% 5.4% 1.5%
Charlotte-Concord-Gastonia, NC-SC 9.5% -29.3% +8 days -4.2% 0.2% 1.2%
San Antonio-New Braunfels, TX 14.0% -35.1% +13 days -3.3% -5.9% 1.2%
Memphis, TN-MS-AR 7.6% -25.6% +10 days -3.8% -4.9% 0.4%

How to Finding the Best Time to Buy: Realtor.com

To determine the best time to buy, Realtor.com examines multiple housing market metrics. These include: 1) listing prices, 2) inventory levels, 3) new “fresh” listings, 4) time on market, 5) homebuyer demand (realtor.com listing views), and 6) price reductions. They score each week of the year from 0-100 based on the number of active listings.

A given week will score highly if it has more listings compared to other weeks of the year. They score the other metrics, in the same way, so each week has six different scores for active listings, new listings, listing prices, days on market, price reductions, and views per property. (In the case of prices, lower prices score higher. Same with views per property). They then rank each week by the average of those scores. The week with the highest overall score is the best time to buy. The best week to buy a house represents a balanced view of market conditions favorable for buyers.


Source:

  • https://www.realtor.com/research/best-time-to-buy-2022/
  • https://www.redfin.com/news/housing-market-update-surging-rates-slow-buying-and-selling/

Filed Under: Housing Market, Selling Real Estate Tagged With: Best Time to Buy a House, When is the Best Time to Buy a House

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

December 8, 2022 by Marco Santarelli

Seattle Real Estate Investment

Is Seattle a Good Place to Invest in Real Estate?

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

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

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

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

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

Last Year's Housing Trends for Seattle  

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

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

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

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

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

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

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

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

Seattle Housing Demand is Strong

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

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

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

Seattle Housing Market Predictions

Seattle Real Estate Investment

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

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

The current typical home value of homes in Seattle is $927,525 (Data through October 31, 2022). 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 $927,525 and 50 percent is worth less (adjusting for seasonal fluctuations). Seattle home values have gone up 7.1% since last October.

Similar growth has been recorded by NeighborhoodScout.com. Their data also shows that Seattle's real estate appreciated 137.11% over the last ten years, which is an average annual home appreciation rate of 9.02%, 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 peak-breaking records month over month. During the latest twelve months (2021 Q2 – 2022 Q2) tracked by NeighborhoodScout, the Seattle appreciation rate has been 12.16%. From 2022 Q1 – 2022 Q2, the quarterly appreciation rate has been at 4.35%, which annualizes to a rate of 18.58%.

However, it's becoming harder for buyers to afford housing with steep mortgage rates and ultra-high prices. Therefore, high prices and mortgage rates are pushing a lot of buyers out of the market which is decreasing the demand. So, the home prices in this region are expected to increase by single digits in the next twelve months. It means that there is a situation in which demand exceeds supply, giving sellers a slight advantage over buyers in price negotiations.

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 10% over the past year to $756,606.
  • The Seattle metro housing market forecast ending with October 2033 is positive.
  • Zillow predicts that Seattle metro home values may grow by 0.5% by October 2023.
  • If this forecast is correct, Seattle metro home prices will be higher in the 3rd Quarter of 2023 than they were in the 3rd Quarter of 2022.
Seattle Housing Market Forecast
Source: Zillow

Seattle Real Estate Investment Generates Excellent ROI In The Long Term

Seattle's housing market has been one of the hottest in the country for years. In the past ten years, the annual real estate appreciation rate has amounted to nearly 9%. 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 investments.

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

Seattle Has Friendly Business Climate

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

Seattle's Tech Landscape Is Rapidly Evolving

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

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

Seattle Rental Market Is Very Strong

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

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

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

Seattle Rent Prices Are Rising in 2022

Rental prices are rising in Seattle due to an increase in demand. As of December 0, 2022, the average rent for a 1-bedroom apartment in Seattle, WA is currently $1,999. This is an 11% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Seattle increased by 3% to $1,442. The average rent for a 1-bedroom apartment increased by 5% to $1,999, and the average rent for a 2-bedroom apartment increased by 10% to $2,849.

  • Two-bedroom apartments in Seattle rent for $2,849 a month on average which is a 14% increase from last year.
  • Three-bedroom apartment rents average $3,495 which is an 11% increase from last year.
  • Four-bedroom apartment rents average $3,800 which is a 2% increase from last year.

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

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

  • Innis Arden
  • Richmond Beach
  • The Highlands
  • Broadway

The Zumper Seattle Metro Area Report analyzed active listings last month across the metro cities to show the most and least expensive cities and cities with the fastest growing rents. The Washington one-bedroom median rent was $1,536 last month. Bellevue was the most expensive city with one-bedrooms priced at $2,220 while Oak Harbor 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 2023. Investors should consider the suburbs of major metropolitan areas for residential rental opportunities, as they're an ideal investment and have seen an increase in buyer demand in this pandemic.

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

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

  • Everett had the fastest growing rent, up 23.1% since this time last year.
  • Bremerton saw rent climb 17.1%, making it second.
  • Federal Way was third with rent jumping 16.9%.

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

  • Bellingham had the largest monthly rental growth rate, up 6.2%.
  • Everett was second with rent climbing 3.9%.
  • Renton ranked as third with rent increasing 3.5%.
Seattle Rental Market
Source: Zumper

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

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

Seattle Is Friendly To Foreign Real Estate Buyers

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

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

The Seattle Housing Market Is Landlord Friendly

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

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

Is Buying a House in Seattle a Good Investment?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Is Seattle a Good Place to Invest in Real Estate?

  • Seattle is home to over 700,000 people.
  • This makes the Seattle housing market the largest in both the state of Washington and the Pacific Northwest.
  • However, the region's housing market is bigger than that.
  • It extends to nearly four million people in the Seattle metropolitan area.
  • Since, 2010, Seattle's population growth has increased by 18.7%.
  • This is the fastest among the 50 largest cities in the U.S. (Census.gov).
  • Seattle's real estate market has always been strong.
  • Tech companies bring so many people into the city, and construction hasn't been able to keep up with that.
  • The Seattle-area job market continues to add new qualified buyers.
  • It is coupled with declining inventories & falling interest rates which leads to multiple offers and bidding wars among buyers.
  • This is the single driving factor of Seattle home prices.
  • A positive forecast for home values in the next twelve months: 1-5% appreciation is expected despite high mortgage rates.

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


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

REFERENCES

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

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

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

Filed Under: Real Estate Investing, Selling Real Estate Tagged With: Real Estate Investing, Seattle investment properties, Seattle Real Estate Investing, Seattle Real Estate Investment

5 Worst Real Estate Markets in 2022

December 6, 2022 by Marco Santarelli

worst housing markets

Smart Asset released its list of the worst housing markets for growth and stability.  Topping the list was Flint, Michigan where the glut of inventory continues to linger leading to the chance of home price decline. Smart Asset analyzed house value data from 400 metropolitan regions across the United States. They examined data from every quarter from the first quarter of 1997 until the fourth quarter of 2021.

Of the markets analyzed, not one market showed any sign of a positive price appreciation forecast.  With slow sales and dropping prices, the aggressive investor may be able to pick off some very good deals in these markets. Research, patience, and a sharpened sense of value can land you a great real estate investment.

Click to read about -> The Hottest Real Estate Markets of 2022

Here Are the 5 Worst Housing Markets of 2022

Michigan has three of the five worst housing markets in terms of growth and stability. Flint, Monroe, and Detroit-Dearborn-Livonia are among them. Over the last 25 years, the house price index has averaged an annualized growth of 2.62 percent or less in all three locations.

1. Flint, MI

Like last year, the Flint metro area ranks as the worst housing market of 2022 for growth and stability. Using historical data, they found that the chance a home price dropped more than 5% in value within 10 years of purchase is 45% – the second-worst rate for this metric. Additionally, over the past 25 years, the average home price has increased less than 83% – the 25th-worst in their study.

2. Monroe, MI

About 40 miles south of Detroit, the Monroe metro area ranks as the second-worst housing market for growth and stability. There is a 44% chance of a significant price decline for home buyers and from 1997 through 2021, the average home price index increased by only 83.77% or an annualized rate of return of less than 3%.

3. East Stroudsburg, PA

Part of the Poconos, East Stroudsburg’s housing market ranks the worst for stability in their study and 62nd-worst for growth. The probability of an East Stroudsburg homeowner experiencing a significant price decline is 46% and the overall home price index increased by less than 103% over the past 25 years.

4. Detroit-Dearborn-Livonia, MI

Over the past 25 years, the average home price in Detroit-Dearborn-Livonia, Michigan rose by only 2.62% annually on average. This is significantly lower than the annualized increase for the top housing market in our study (Austin-Round Rock-Georgetown, Texas, at 6.37%). Additionally, Detroit-Dearborn-Livonia ties with Monroe for the third-worst housing market stability score.

5. Rockford, IL

Located in northern Illinois, Rockford ranks as the fifth-worst housing market for growth and stability across all 400 metro areas they considered. If you bought a home in the Rockford metro area between 1997 and 2021, there was a 39% chance the home would have lost at least 5% of its value within 10 years of its purchase. Home prices, meanwhile, rose just 67.25% in that timespan, 398th of the 400 metro areas studied.

The complete list of the worst housing markets in 2022 is represented in the following infographic.

worst housing markets 2022
Source: SmartAsset

Methodology For Worst Housing Markets of 2022

To determine the best and worst housing markets for growth and stability, SmartAsset examined data from 400 metro regions and compared them using the following two metrics:

Stability: This is the probability that homeowners experienced a significant price decline (5% or more) at any point in the 10 years after they purchased the home.

Overall home price growth: The total growth in home prices during tperiodiod we analyzed.

All data comes from the Federal Housing Administration (FHA) and covethe 25 yearsiod from the first quarter of 1997 through the fourth quarter of 2021. They used these two metrics to create our final rankings. Areas received a score of 100 on the stability metric if there was a 0% chance of a significant price decline. The metro area with the highest chance of a significant price decline (46%) received a score of 0. Similarly, the metro area with the highest overall home price growth received a growth index score of 100 and the metro area with the lowest growth received a 0. They then averaged each metro area’s scores over the two metrics, ranging from the highest average score to the lowest.

Top 5 Coolest Housing Markets of 2022 in the United States

In June, Bankrate also released a report on which real estate markets are doing the worst during the pandemic-led housing boom. As a nationwide housing boom rages, every state saw property values increase during the 12 months that ended in September. However, some state economies are struggling with weak job growth and other challenges.

These housing markets were in the bottom five on their index:

  • 47. Connecticut. This state posted poor showings across the board.
  • 48. Washington, D.C. The district’s score was brought down by weak appreciation, high unemployment, and a hefty tax burden.
  • 49. Alaska. Tepid job growth and high unemployment weighed down the northernmost state.
  • 50. Maryland. The state posted a comparatively weak appreciation of 11 percent, along with a high level of past-due loans and a sputtering job market.
  • 51. Louisiana. It ranks worst in past-due loans, with 6.8 percent of homeowners behind on their mortgage payments. Louisiana also fares poorly on price appreciation, job growth, and tax burden.

Housing Markets That Could See a Price Decline

According to data released by the Federal Housing Finance Agency (FHFA) on Tuesday, home prices are now 34% higher than they were two years ago, and they have continued to rise from March to April. But even though the housing market is bad for buyers all over the country, home prices have gone up more in some places than in others. This has led some people to worry about a possible crash in the housing market.

At the top 3 positions, we have Boise, Colorado Springs, & Las Vegas which are expected to see some significant price declines. Prices in these markets have increased by 30% in the last year. According to Mark Zandi, chief economist at Moody's Analytics, “the most overvalued markets are in the South and Southwest,” in those areas where home prices got “juiced up by remote work” during the COVID pandemic. “Carolinas, Atlanta, down into Florida, parts of Texas, and then the Mountain West.

You could draw a line from Boise down to Phoenix and Tucson —and all the major metropolitan areas on either side of that line are meaningfully overvalued,” Zandi tells Newsweek. According to Thomas LaSalvia, the senior economist at Moody's Analytics, things are becoming worse in many Sun Belt cities where there has been any movement in the previous few years, and especially in those where there has been steady migration in the last few decades.

Many of the out-of-state people who migrated to these cities came with “large savings accounts from selling their home in a higher-priced area or large remote work incomes” to areas where the local population had a substantially lower income. With this money, they pushed local buyers out of the market in bidding wars for purchasing homes.

These are the cities with the most overvalued homes in the nation:

  1. Boise City, ID
  2. Colorado Springs, CO
  3. Las Vegas, NV
  4. Phoenix, AZ
  5. Coeur d'Alene, ID
  6. Tampa, FL
  7. Atlanta, GA
  8. Fort Collins, CO
  9. Sherman, TX
  10. Jacksonville, FL
  11. Idaho Falls, ID
  12. Lakeland, FL
  13. Greeley, CO
  14. Longview, WA
  15. Charleston, SC
  16. Albany, OR
  17. Denver, CO
  18. Clarksville, TN
  19. Greensboro, NC
  20. Charlotte, NC

Sources

  • https://www.bankrate.com/mortgages/housing-heat-index/
  • https://smartasset.com/data-studies/best-and-worst-housing-markets-for-growth-and-stability-2022
  • https://www.newsweek.com/housing-market-crash-could-hit-these-20-cities-hardest-1720201

Filed Under: Getting Started, Growth Markets, Housing Market, Selling Real Estate

Is It a Good Time to Sell a House or Should I Wait Until 2023?

November 29, 2022 by Marco Santarelli

should i sell my house now

Should I Sell My House Now?

Is now a good time to sell a home? It's a topic that many potential house sellers are pondering, especially following last year's rapid increase in home values. It might be tempting to delay the sale for an additional year or two but the majority of real estate experts think yes, this is a good time to sell your house. There are several causes for this, including persistent buyer demand and a lack of available homes. The mortgage rates are increasing in 2022 and show no indication of slowing in the near future.

Some first-time buyers may be compelled to leave the market as mortgage interest rates continue to rise. In other words, if you are considering whether to sell a house now or wait until 2023, it may be prudent to do so before interest rates close. The intense competition for housing results in fewer options, higher prices, and faster sales. In a seller's housing market, there are more interested buyers than available homes and that makes it a difficult time to buy a house, especially for first-time buyers.

According to the NAR, the national median price for existing homes sold in October was $379,100, up 6.6% from the same month in 2021. This is the longest streak of year-over-year growth ever recorded, spanning 128 months. “Inventory levels are still tight, which is why some homes for sale are still receiving multiple offers,” Yun added. “In October, 24% of homes received over the asking price. Conversely, homes sitting on the market for more than 120 days saw prices reduced by an average of 15.8%.”

Is it a Good Time to Sell a House in 2022?

Fannie Mae released a nationwide housing survey for October that revealed that 51 percent of respondents believe it is a good time to sell a house in 2022.

The percentage of respondents who say it is a good time to sell a home decreased from 59% to 51%, while the percentage who say it's a bad time to sell increased from 33% to 42%. As a result, the net share of those who say it is a good time to sell decreased 17 percentage points month over month.

is it a good time to sell a house
Source: Fannie Mae

Realtor.com’s stats for the week ending November 24 showed home price growth continued to ease, albeit more modestly than in recent weeks, while fewer homeowners put homes up for sale. Despite the pullback in new sellers, the number of homes on the market rose again and time on the market increased as fewer shoppers could contend with 7% mortgage rates. New listings, a measure of sellers placing homes on the market, decreased by 17% from one year ago.

This is the twentieth consecutive week of year-over-year declines in the number of homeowners putting their property for sale, an indication of the continuing decline in seller confidence. As the housing market rebalances to a degree of equilibrium, the price rise is moderating moderately due to the considerable withdrawal of potential sellers and the reduction in production by home builders. In other words, supply is decreasing in tandem with diminishing buyer demand, preventing an imbalanced surplus that could accelerate a price correction.

Active inventory continued to grow, increasing 49% above one year ago. Inventory accelerated again, notching a sixth straight week of growth in the yearly trend roughly at or above 2%–in this case nearly double. The median listing price grew by 11.0% over last year. Growth in the typical asking price of for-sale homes was little changed from last week and continues to exceed last year’s level by double-digits, marking a 47th straight week at a double-digit pace. However, this week is also the 6th consecutive week of slowing price growth, a trend that has been present in fits and starts since June.

Should I Sell My House Now or Wait Until 2023?

Despite record levels of equity, sellers are less eager to participate in today's market because nearly three out of every four potential sellers would also need to purchase a home, and rising mortgage rates, which have more than doubled in the past year, have reduced sellers' ability to trade up without increasing their monthly housing costs.

Active inventory grew 49% year-over-year. More homes for sale than a year ago are shifting the housing market's seller-buyer equilibrium. The market's inventory is still below pre-pandemic levels. According to Realtor.com’s October Housing Trends Report, the inventory of homes actively for sale on a typical day in October increased by 33.5% over the past year.

This amounted to 189,000 more homes actively for sale on a typical day in October compared to the previous year. The growth rate of inventory increased compared to last month’s growth rate of 26.9% and has just surpassed 2020 levels. Despite this improvement in the number of homes actively for sale, active listings still lag behind their pre-pandemic levels. The number of homes actively for sale in October was 40.4% lower than the pre-pandemic 2017-2019 average.

The total number of unsold homes nationwide—a metric that includes both active listings and listings in various stages of the selling process that are not yet sold—increased by only 0.5% year-over-year. Growth decelerated from last month’s 0.7% positive growth rate as the count of pending listings and newly listed homes fell further on a year-over-year basis.

Home listings are spending more time on the market which is a bad sign for the sellers. The typical home spent 51 days on the market this October which is 6 days more than last year. Slower inventory turnover is primarily fueling the growth in actively listed homes but homes still spent 20 fewer days on the market this October than typical 2017 to 2019 timing. The share of homes having their price reduced grew from 10.6% last October to 20.9% this year.

The share is now well above 2017 (18.1%) and 2019 (17.0%) levels but is just below the share of price reductions in October 2018 (21.2%). It indicates that the housing correction has already begun, and sellers appear to have gotten the message. If sellers hesitate to enter the market due to a diminishing perception that now is a good time to sell, the housing market might be slowed, and it could take longer for equilibrium to recover. With home equity at a historic high, homeowners on the fence about selling should realize that they are likely in a good position.

Before beginning to look at properties, purchasers should have their finances in order and be pre-approved for a mortgage in order to be able to act swiftly on the market. However, while the most desirable properties will continue to sell rapidly, buyers will have a bit more time to decide on other properties.

Bottom Line: Don't Wait Until 2023 to Sell Your House

With persistent supply constraints and moderate buyer demand, now is a good time to sell your house. And with borrowing rates on the rise, it may be preferable to sell sooner rather than later; if rates go substantially more, prospective buyers may abandon their property search. But carefully evaluate your motives for selling. The typical asking price of for-sale homes continues to exceed last year’s.

If you're merely attempting to time the market and don't have a concrete plan for after you sell your house, it may be prudent to wait. Typically, rising mortgage rates result in fewer purchasers and a narrower pool of buyers able to give the price you desire. It costs money to sell a home, so if you cannot optimize your price, you may prefer to wait until 2023.

Find a good broker to sell your house now. A skilled real estate agent's assistance may be vital, especially in a hot housing market. Take the time to explore many possibilities and ask friends and family members to recommend agents with whom they have had positive experiences. Getting solid real estate agent referrals from individuals you know is another excellent alternative, provided you know people who have recently purchased or sold a house in your neighborhood.

According to NAR’s most recent Profile of Home Buyers and Sellers, 90 percent of sellers worked with an agent, and it’s easy to see why. NAR data shows that the typical home sold with the help of a real estate agent in 2021 went for $318,000, while homes without an agent on board went for $260,000. Agents have access to the multiple listing service (MLS), which organizes listings for real estate professionals and web portals like Zillow. An agent can assist distinguish between serious buyers and those who are just looking. You can buy your next house without a real estate agent no matter how you sell your present one.


Sources:

  • https://www.fanniemae.com/
  • https://www.realtor.com/research/reports/
  • https://www.bankrate.com/real-estate/should-i-sell-my-house-now-or-wait/
  • https://www.realtor.com/research/october-2022-data/

Filed Under: General Real Estate, Housing Market, Selling Real Estate Tagged With: is it a good time to sell a house, should i sell my house now

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