For those buying an investment property, looking for real estate deals in a buyer’s market can be a good idea. If you’re selling an investment property, a seller’s market would help you get the best return on investment.
To help speed up your real estate market research, we’ve compiled a list of 10 cool buyer’s markets and 10 hot seller’s markets in 2020. Our go-to resource for finding this information is Zillow’s Market Temperature feature. This metric determines whether a location is a buyer’s or seller’s market based on the following factors:
- List to Sale Price Ratio
- Number of Price Cuts on Listings
- Days on Market
In addition to classifying each housing market as a seller’s or buyer’s market, we have also included return on investment data from Mashvisor. That way, if you plan on buying an investment property for sale in any of these major cities, you will know what to expect from a long-term rental property in terms of rental income, cash on cash return, and more.
10 Cool Buyer’s Markets in the US Housing Market in 2020
If you’re looking for the best places to invest in real estate, know that one characteristic is that the location is a buyer’s market. In this state, the market has a higher supply of homes for sale than buyers. This means that supply > demand. In this situation, real estate investors and homebuyers will typically find less competition on an investment property for sale. Sellers will usually not receive multiple offers and their properties stay on the market for longer periods of time. This means that buyers have the upper hand in negotiations as sellers may have to lower asking prices in order to make a sale in a timely manner.
So if you’re wondering where to invest in real estate, check out these 10 cool buyer’s markets. Just don’t forget to also pay close attention to Mashvisor’s real estate data. Just because a location is a buyer’s market, that doesn’t always make it the best place to buy rental property. Make sure that you’ll also get a good rate of return on a rental property in the city.
What about those looking to sell an investment property in a buyer’s market?
Well, if you have a desirable property, you may very well still get multiple offers and make a killing. For example, in 2020, many buyers are hunting for larger properties with more indoor and outdoor space and room for a home office and homeschooling thanks to the coronavirus pandemic. Such a property may still be hot even in a cool buyer’s market.
Whatever type of property you put up for sale in these locations, be sure to work with a skilled real estate agent who can help you price the property correctly and navigate negotiations.
If you are in no rush to sell, you could wait for a real estate market shift to a seller’s market. But note that it takes a lot of time for locations to shift in such a manner, if they ever do. So if you need to sell now, then it’s best to just follow some of the above tips to ensure you make a good return and a relatively quick sale.
#1. Atlanta, GA Real Estate Market
- Median Property Price: $453,950
- Price per Square Foot: $508
- Price to Rent Ratio: 19
- Traditional Rental Income: $2,011
- Traditional Cash on Cash Return: 1.5%
- Days on Market: 79
#2. Dallas, TX Real Estate Market
- Median Property Price: $437,017
- Price per Square Foot: $213
- Price to Rent Ratio: 19
- Traditional Rental Income: $1,884
- Traditional Cash on Cash Return: 0.5%
- Days on Market: 71
#3. Miami, FL Real Estate Market
- Median Property Price: $602,255
- Price per Square Foot: $380
- Price to Rent Ratio: 20
- Traditional Rental Income: $2,553
- Traditional Cash on Cash Return: 1.2%
- Days on Market: 199
#4. New York City, NY Real Estate Market
- Median Property Price: $1,146,948
- Price per Square Foot: $882
- Price to Rent Ratio: 35
- Traditional Rental Income: $2,741
- Traditional Cash on Cash Return: 0.5%
- Days on Market: 161
#5. Houston, TX Real Estate Market
- Median Property Price: $407,610
- Price per Square Foot: $175
- Price to Rent Ratio: 18
- Traditional Rental Income: $1,845
- Traditional Cash on Cash Return: 1.4%
- Days on Market: 80
Related: How to Find the Best Houston Income Properties
#6. Las Vegas, NV Real Estate Market
- Median Property Price: $427,671
- Price per Square Foot: $220
- Price to Rent Ratio: 26
- Traditional Rental Income: $1,349
- Traditional Cash on Cash Return: 1.2%
- Days on Market: 84
Related: The Best Way to Find High Cap Rate Las Vegas Real Estate for Sale
#7. Boston, MA Real Estate Market
- Median Property Price: $960,257
- Price per Square Foot: $734
- Price to Rent Ratio: 29
- Traditional Rental Income: $2,776
- Traditional Cash on Cash Return: 0.7%
- Days on Market: 56
#8. San Antonio, TX Real Estate Market
- Median Property Price: $301,867
- Price per Square Foot: $145
- Price to Rent Ratio: 16
- Traditional Rental Income: $1,593
- Traditional Cash on Cash Return: 0.9%
- Days on Market: 83
#9. Seattle, WA Real Estate Market
- Median Property Price: $787,942
- Price per Square Foot: $538
- Price to Rent Ratio: 27
- Traditional Rental Income: $2,399
- Traditional Cash on Cash Return: 1.0%
- Days on Market: 52
#10. Denver, CO Real Estate Market
- Median Property Price: $534,888
- Price per Square Foot: $343
- Price to Rent Ratio: 23
- Traditional Rental Income: $1,959
- Traditional Cash on Cash Return: 1.5%
- Days on Market: 46
10 Hot Seller’s Markets in the US Housing Market in 2020
Seller’s have the upper hand in a seller’s market. In these housing markets, there are fewer homes for sale than there are buyers. This means that supply < demand. Real estate bidding wars are more common as sellers can usually get multiple offers on their investment properties for sale. House prices are also high in a seller’s market because the demand for real estate leads to continuous appreciation. If a home is really hot, it could go for above listing price and won’t stay on the market for very long.
So if you own an investment property in one of the following 10 real estate markets, now may be a great time to sell in order to secure the best return on investment for yourself.
What about those looking to buy investment property in a seller’s market?
Sometimes, investing in real estate in a seller’s market is a good idea. Although you will face competition and prices are higher, you may get a good return on a rental property in a hot market.
Again, hiring a real estate agent in this situation will help. A real estate agent will ensure you offer the right price so as to not immediately be rejected. Conducting your own real estate market analysis will also help you put together your offer (Find comps using Mashvisor’s real estate investment software). Your agent will also help you know when to walk away from a real estate deal if a bidding war is driving up the price far beyond the actual value of the property.
Be sure to also go into the market with your investment property financing ready. If you’re not a cash buyer in a seller’s market, you will need a pre-approval and a down payment ready to go to compete.
Most importantly, use online real estate investment tools to quickly find and analyze deals. Tools like:
- A real estate heatmap for neighborhood analysis
- A rental property finder for quick investment property search
- A rental property calculator for investment property analysis
are invaluable to real estate investors searching for properties in a seller’s market. They allow you to quickly find good neighborhoods and high return investment properties for sale – faster than investors and buyers using traditional search methods. That way, you can put in an offer before anyone else. Sign up for Mashvisor to get access to these tools.
#1. Nashville, TN Real Estate Market
- Median Property Price: $481,135
- Price to Rent Ratio: 25
- Traditional Rental Income: $1,614
- Traditional Cash on Cash Return: 1.3%
- Days on Market: 49
Related: Top Nashville Neighborhoods with High Cap Rates
#2. Orlando, FL Real Estate Market
- Median Property Price: $327,860
- Price per Square Foot: $179
- Price to Rent Ratio: 17
- Traditional Rental Income: $1,610
- Traditional Cash on Cash Return: 1.4%
- Days on Market: 94
#3. Austin, TX Real Estate Market
- Median Property Price: $667,671
- Price per Square Foot: $324
- Price to Rent Ratio: 26
- Traditional Rental Income: $2,131
- Traditional Cash on Cash Return: 0.3%
- Days on Market: 78
#4. Chicago, IL Real Estate Market
- Median Property Price: $478,060
- Price per Square Foot: $280
- Price to Rent Ratio: 19
- Traditional Rental Income: $2,087
- Traditional Cash on Cash Return: 0.4%
- Days on Market: 63
#5. Phoenix, AZ Real Estate Market
- Median Property Price: $438,153
- Price per Square Foot: $219
- Price to Rent Ratio: 26
- Traditional Rental Income: $1,421
- Traditional Cash on Cash Return: 0.8%
- Days on Market: 63
#6. Philadelphia, PA Real Estate Market
- Median Property Price: $371,920
- Price per Square Foot: $344
- Price to Rent Ratio: 20
- Traditional Rental Income: $1,550
- Traditional Cash on Cash Return: 1.9%
- Days on Market: 89
Related: 7 Philadelphia Neighborhoods with High Cap Rates
#7. San Diego, CA Real Estate Market
- Median Property Price: $835,689
- Price per Square Foot: $526
- Price to Rent Ratio: 26
- Traditional Rental Income: $2,685
- Traditional Cash on Cash Return: 1.1%
- Days on Market: 53
#8. Memphis, TN Real Estate Market
- Median Property Price: $284,838
- Price per Square Foot: $85
- Price to Rent Ratio: 23
- Traditional Rental Income: $1,028
- Traditional Cash on Cash Return: 0.8%
- Days on Market: 58
#9. Sacramento, CA Real Estate Market
- Median Property Price: $418,662
- Price per Square Foot: $274
- Price to Rent Ratio: 23
- Traditional Rental Income: $1,548
- Traditional Cash on Cash Return: 1.0%
- Days on Market: 53
#10. Scottsdale, AZ Real Estate Market
- Median Property Price: $941,930
- Price per Square Foot: $329
- Price to Rent Ratio: 25
- Traditional Rental Income: $3,199
- Traditional Cash on Cash Return: 2.0%
- Days on Market: 118
A Few Final Words
Just remember, when you’re choosing a real estate market to invest in or trying to decide if it’s a good time to sell, looking at whether the location is a buyer’s or seller’s market is just a part of the picture. Be sure to get all the facts before making a decision.