The COVID-19 pandemic has had a massive impact on a wide range of sectors. And while the housing market as a whole has managed to navigate the worst of it, various local markets have been impacted to varying degrees. One of the key metrics that reflect the effects of the pandemic is the homeownership rate. According to data from Realtor.com, homeownership rates have swung widely in a number of metropolitan areas over the last year.
Realtor.com chief economist Danielle Hale had this to say regarding these recent trends:
“The pandemic drove increased homebuying interest in the types of livable communities that offer homebuyers good value for their money and a decent number of homes to choose from,”
The Methodology used to Determine Homeownership Rates
In order to determine the homeownership rate across the US, Realtor.com’s analysts sifted through U.S. Census Bureau data for over 70 metropolitan areas. The data covers some of the largest and most densely populated cities, suburbs, towns, and even urban areas in the country. The analysts compared the data in the 4th quarter of 2020 and the 1st quarter of 2021 with the same time periods from the previous year.
Areas Where the Homeownership Rate Increased
- Albany, New York: The homeownership rate has increased by 9% in the capital of New York state. As a result of the pandemic, many out-of-town buyers have flocked to the city looking for more space, fewer restrictions, and more importantly, affordable housing prices. With a median metro list price of $354,300, the city has attracted a significant number of buyers from downstate as well as cities like Boston.
- Baton Rouge, Louisiana: The homeownership rate has increased by 8.45% in Baton Rouge, Louisiana. As a matter of fact, the Advocate has found that more homes were sold in the city last year than during the surge in demand that followed Hurricane Katrina back in 2005. Much like Albany, Baton Rouge’s median list price ($315,000) is below the national average, which contributed to attracting many first-time buyers to the local real estate market. The low mortgage rates are another factor that helped drive the homeownership rate in the city.
- Columbia, South Carolina: The homeownership rate has increased by 7.3% in Columbia, South Carolina. Affordability has long been the main feature of the Columbia real estate market. The median metro list price is below $300,000 and the city boasts a wide range of amenities that attract real estate investors and renters alike. The fact that the city is a buzzing college town has also helped maintain demand for rental properties in the city.
- North Port, Florida: The homeownership rate has increased by 7.3% in North Port, Florida. Florida is home to some of the most expensive real estate markets in the country. Having said that, the state does have some high potential areas that are still relatively affordable. With a median metro list price that is slightly above $420,000, North Port has emerged as a cheaper alternative to highly competitive markets such as Miami-Dade and Palm Beach.
Areas Where the Homeownership Rate Decreased
- Syracuse, New York: The homeownership rate has decreased by 8.6% in Syracuse, New York. Like many cities in the US, the dominant trend in the Syracuse housing market has been low inventory. The fact that there are more buyers than investment properties for sale has led to bidding wars between real estate investors. The low inventory aside, the rise in construction costs is another factor that affected the homeownership rate.
- Knoxville, Tennessee: The homeownership rate has decreased by 6.65% in Knoxville, Tennessee. Despite several positive trends such as low interest rates, increasing demand, and a growing population, homeownership has nonetheless decreased in the city. Realtor.com’s analysts believe that this decrease is in part due to the median household income in the area, which makes it difficult for local residents to buy property in such a hot housing market.
- Dayton, Ohio: The homeownership rate has decreased by 6.25% in Dayton, Ohio. The local market has witnessed a staggering rise in home prices as an increasing number of real estate investors have bought properties in the city. The decrease in homeownership can be chalked to the competition regular buyers face from sophisticated investors.
- Tulsa, Oklahoma: The homeownership rate has decreased by 6.05% in Tulsa, Oklahoma. The dynamics that shape the Tulsa real estate market are similar to those observed in Dayton. Price spikes and investor interest have made it difficult for the average buyer to acquire a property.
What Do These Trends Mean for Investors?
Naturally, housing markets with a high ownership rate are easier to navigate for investors. However, low inventory real estate markets can be extremely profitable if you manage to zero in on the right investment property and avoid costly bidding wars. Working with an experienced real estate agent and relying on advanced real estate investment tools is highly recommended when investing in these markets.