What will the real estate market be in 2023? If you’re planning to invest in real estate next year, it’s important to know what to expect.
Despite the ongoing pandemic, the US real estate market remains strong and resilient. Demand from both homebuyers and investors continues to rise, causing home prices to skyrocket as well. However, inventory is also getting scarce, which is one of the reasons why home values appreciate at a faster rate in some markets.
Table of Contents
- Real Estate Market Predictions 2023: Hot or Cold?
- Will the Real Estate Market Crash in 2023?
- Real Estate Trends and Forecasts to Help You Make the Right Decision
- Top 5 States People Are Moving To
- Bonus: Top 3 Cities to Invest in Rentals According to Experts
If you’re thinking of investing in real estate next year, you might be wondering what the real estate market conditions will be in 2023. Before you look for a property to buy, it’s important to know what home buyers, home sellers, real estate agents, and investors should expect from the 2023 real estate market update.
According to research conducted by major real estate bodies, including Mashvisor and some analysts, the housing market will continue to grow in 2023. While the demand in some areas is expected to ease down, there will be new demand from new buyers and investors alike. It is something that you need to know if you want to invest in real estate in 2023.
As always, the key factor to a successful real estate investment is choosing the right location. In addition, investors also need to pick the right investment strategy depending on the area they invest in. By doing proper research and analysis, there is always a good chance you will be a profitable real estate investor.
Real Estate Market Predictions 2023: Hot or Cold?
The past couple of years proved how difficult it is to predict the housing market. Amid the pandemic, when many people were expecting a housing recession, the US real estate market ironically prospered. Unexpected demands made the housing industry among the few that not only survived during the height of the global health crisis but exceedingly thrived.
Supplies couldn’t keep up with the rising demand, causing housing prices to skyrocket. What’s more, low interest rates encouraged many people to buy their own homes finally. It also convinced new investors to venture into real estate and invest in rental properties. All throughout 2021 and in the first several months of 2022, real estate remained a hot industry.
Now that we are in the last couple of months of 2022, many are wondering if the real estate market will remain hot next year. We interviewed real estate experts from across the US to share their insights on what will happen to the housing market in 2023.
Here’s our current update for our real estate market forecast for 2023:
1. Housing Demand Will Continue to Rise
According to several real estate analysts, there are several reasons why they foresee the demand for housing to continue to rise. The increase in housing demand will most likely come from millennial buyers, most of whom are now in their prime years. It means that most millennials nowadays are now prioritizing homeownership.
According to a report from the National Association of REALTORS, millennials ages between 23 to 41 years old make up 43% of homebuyers. One of the reasons young adults are now considering homeownership is that they’ve saved enough during the pandemic by cutting costs.
For instance, some of them moved in with family and paid down debts. In addition, lockdowns forced them to stay at home, so they could save money that they could have used for travel.
The 2023 real estate update predicts a surge of new millennials expected to mature into the homebuying age bracket. They are expected to continue to drive the housing market. In fact, millennial buyers are expected to increase next year and in the years to come. As a result, housing demand will continue to elevate, preventing home prices from dropping.
Other Factors That Could Drive Demand for Housing
Aside from an increase in millennial buyers, there are also other factors that can help drive the demand for housing. The factors include the local economy, interest rates, and population growth. Overall, the housing demand will vary depending on the location.
While the forecast is generally favorable, we should consider the following factors when choosing a real estate market to invest in.
“As with any market, various factors can influence the real estate industry. One major influence is the state of the economy, as a strong economy often means more jobs and an increase in disposable income, leading to higher demand for housing. Another consideration is interest rates, as lower interest rates make borrowing money for a mortgage more affordable.
Additionally, population growth can have an impact on real estate demand, both through migration to new areas and increased urbanization in already populated areas. Government policies and regulations can also play a role in shaping the real estate market, particularly policies regarding property taxes, affordable housing initiatives, and zoning restrictions.
In sum, a combination of economic stability, low-interest rates, population growth, and favorable government policies can all contribute to a healthy real estate market.”
Boyd Rudy, Associate Broker, Dwellings Michigan
2. Home Appreciation Rates Will Slow Down
While home prices will not substantially drop in 2023 due to a continuous increase in demand for housing, many real estate experts believe that home appreciation rates will slow down. For the past couple of years, we have been used to seeing appreciation rates rising at a fast pace. In fact, in some progressive locations, double-digit appreciation rates are fairly common.
However, while home values will not significantly drop, home prices are slowing down, and they will almost remain relatively constant. Appreciation rates are expected to be 1%, more or less, depending on the local market. Of course, the said value is not set in stone. It can be higher for some markets, while it can also go negative for others.
When Are Home Prices Expected to Drop?
If the interest rates continue to rise at their current pace, home prices will be significantly affected. It may not be good for sellers, but it will be good news for most buyers who have been waiting for the home values to ease down a bit.
“Homes priced in the bottom 65% of a market are unlikely to see price reductions. Instead, many of these homes will likely appreciate at a rate of 3% to 6%. Homes priced in the 65th to 80th or 85th percentile will likely stagnate or value losses of around 5%. Homes priced in the top 15% to 20% of a market will see value losses of as high as 15%.”
Chuck Vander Stelt, Real estate agent/broker/REALTOR®, Quadwalls.com
“The forecast for 2023 is diverse. The industry is showing signs of lower prices, reductions in buyer demand, and higher borrowing rates. Home prices may fall slightly but not drastically. As such, there is not much clarity.
However, Zillow, Fannie Mae, and Freddie Mac indicate that home prices may grow slightly. If inflation is persistent, the financial markets could consolidate. This could result in higher mortgage rates that may impact the entire country’s housing market.
In over two-thirds of the country’s prime housing markets, home values declined in the summer because of high mortgage rates. The shock of rising mortgage rates still continues to consume the economic market.
Despite a slow market and receding buyer enthusiasm, the anticipation is that home demand will continue to overtake the available inventory in 2023. The expected development must also factor in increasing rental costs.”
Jon Sanborn, Co-Founder, Brotherly Love Real Estate
3. Interest Rates Will Continue to Surge
As 2022 comes to a close, we’re seeing interest rates almost doubling from their record lows during the beginning of the year and are not slowing down. Industry experts surveyed by Bankrate recently believe that interest rates will continue to go up throughout 2023. It is due to continued inflation, a potential recession, overall higher interest rates, and geopolitical tensions.
It’s possible that the 15-year mortgage loans will command an interest rate that can go as high as 7.25% to 8.25%. Similarly, 30-year mortgage loans are also expected to cost higher starting next year, with interest rates that can reach as high as 8% to 8.75%.
Some optimistic forecasts predict the interest rates to gradually come down towards the end of 2023 at around 5.25% for a 15-year loan and 6% for a 30-year mortgage. However, it will only happen if inflation is kept under control. It will also depend on whether or not the Fed will ease up its aggressive rate increases.
Possible Outlook for Interest Rates in 2023
According to a real estate market update from Bankrate, there are three different possible scenarios for interest rates in 2023:
- The inflation rate remains high: If inflation remains at a constant high, the Federal Reserve will be forced to increase interest rates at a continuous pace. With this, mortgage rates will also continue to rise and can go as high as 8.5% or more.
- Inflation will gradually decrease: If the Consumer Price Index responds more to the interest rate hike, inflation is expected to decrease gradually. Mortgage rates are then expected to stabilize, ranging from 7% to 7.5%.
- There will be an economic recession: If the Fed continues to raise interest rates to ease inflation, the economy may fall into recession. Only then will the rates possibly drop to around 5%.
Can Buyers Find a Home to Buy With High Interest Rates?
If, for instance, the housing interest rates will not ease down in 2023, the best course of action for homebuyers is to find a good location where home values are relatively low. With low home prices, buyers will most likely be able to pay in cash. They can avoid the high cost of borrowing money to buy a home. After all, in times like this, cash is king.
“In 2023, the interest rate in secondary and tertiary markets is anticipated to increase. Many investors are shifting away from premier locations (such as Los Angeles and New York) to secondary and tertiary markets (such as Denver and Las Vegas).
Work-from-home regulations during the pandemic served as a catalyst for this shift, which will undoubtedly continue for the foreseeable future. Since people can work remotely, many are no longer tied to a specific location.
Today, many individuals have the choice to rent in smaller cities or towns for comfort and tranquility, away from the noise and congestion of the big metropolis.”
David Bitton, Co-founder & CMO, DoorLoop
4. Housing Inventory Is Expected to Increase
For the past couple of years, there have been unexpected bidding wars among homebuyers and investors in several real estate markets. Amid the pandemic, buyer demand grew at a faster rate, and whatever was left of the inventory from the pre-pandemic era couldn’t keep up. It has resulted in a consistent increase in home prices in various housing markets.
In 2023, a lot of investors are wondering if we will see an improvement in housing inventory. If inventory increases, sellers will have more competition in the market, which will force them to price their homes strategically to attract buyers. A rise in inventory is generally good news for homebuyers and investors alike, as prices will most likely fall.
It’s important to note, however, that some experts believe that while inventory is expected to rise, there won’t still be enough listings to cover the growing demand for housing. As many boomers prefer to hold on to their homes and millennials are expected to enter the market, housing inventory will remain limited despite the addition of new listings in the market.
Reasons Why Housing Inventory Is Expected to Rise
Next year, however, we can’t say for sure if housing inventory will remain low or if we will see the most anticipated increase. But the good news is that real estate experts find several reasons that housing inventory will most likely rise, such as the following:
- Inventory started to grow again in August 2022: According to an article from Fool.com, a report from Realtor.com shows that inventory was up by more than 26% this summer.
- There’s a possibility of economic recession: Many economic experts fear that recession is highly probable. With an imminent recession, sellers who are serious about listing their homes in the market will most likely sell their homes before the economy crashes. It will result in a sudden rise in inventory.
- New constructions from the previous years will be ready to sell: Since the pandemic started, new constructions have slowed down due to travel restrictions and fear of the unknown. However, a couple of years into the pandemic and with the easing of restrictions, we saw the demand for housing and how the lack of inventory affected the market. It encouraged investors to build new homes; the new constructions are expected to be ready for listing by next year.
“The housing inventory is increasing in the market as more homeowners are listing their homes for sale now, instead of waiting for the market to rebound. At the same time, more banks are interested in selling their REOs. Thus, inventory is rising, even though at a slow and steady rate.”
Sal Dimiceli, Sr., Owner, Lake Geneva Area Realty
5. Rent Prices Will Keep Soaring
Even though there was a slight decline in rent prices last August 2022, the long term outlook for the rental market in most states remains good for rental property owners. In fact, according to a forecast from the Federal Reserve Bank of Dallas, rental prices will continue to climb to as high as 8.4% in mid-2023.
The above figure is extremely high compared to the annual rent inflation rate during pre-pandemic times, which only ranged between 4% and 5%. However, during the second half of 2023, experts forecast rent prices to moderate if the interest rates will also decline. In general, renters should expect to pay more for their rent in the following months.
“Rents should continue to rise at a rapid pace, putting a sturdier floor under home values. In the last housing crisis, home prices fell, and housing rents decelerated sharply. Many people were leaving homeownership and landlords couldn’t squeeze them for more rent because there were simply too many homes available.
In the current environment, where higher mortgage rates are persuading some potential home buyers to remain renters, landlords are in a much stronger position. They can keep raising rents because the market isn’t oversupplied with homes. In turn, higher rents should keep home prices from falling like in the prior housing bust.
The more a home can generate in rent, the more valuable the home becomes.”
Chase Michels, Real Estate Consultant, The Michels Group – COMPASS
Should You Invest in Rental Properties in 2023?
Since rental rates are going up while home prices are anticipated to plunge, real estate experts believe investing in the rental market is a better option than in fix and flips. If you own a rental property, you’re one of the lucky few who will benefit from the said forecast. It’s best to utilize your investment property as a rental home if you intend to invest in real estate.
If, for instance, you are into fix and flip investing, it’s better to hold on to your property first after renovating it. Rent it out for a few months or years and wait until home prices stabilize in your favor before finally listing your home for sale. After all, according to experts, there are more opportunities in buy-and-hold next year.
“Rentals are a better investment in 2023 as rental rates should remain strong and the long-term opportunity of the rental property allows an investor to time the market. Buy and sell in 2023 will produce a lower return as many of the corporate investors, buyers, and others are dumping inventory which will soften prices. Buy and hold is the opportunity in 2023.”
Phil McDonald, Managing Broker, Realty Advisors Guaranteed Home Sale
“Rentals and buy-and-sell options can be good options, depending on your situation. If you want to invest in a property that will appreciate over time, then buying is the best option. However, renting may be a better choice if you’re just looking for short-term rental income or want to avoid riskier investments.”
Zackary Smigel, Real Estate License Wizard
Will the Real Estate Market Crash in 2023?
If you’re planning to invest in the real estate market, you might be asking: will the housing market crash in 2023? There are some predictions that the housing market will crash in 2023. However, while many experts believe that a recession may be inevitable in the coming months, no one really sees that a crash will actually happen.
While there are signs that the housing market may not be as strong in 2023 as it was in the past two years, a housing market crash is highly unlikely. Although based on the different predictions already mentioned above, a housing market downturn is possible. The good news is that it won’t be as bad as a total crash.
Here are a few predictions from the experts that will answer the question about the upcoming housing market crash in 2023:
6. Fannie Mae Forecasts a Slight Recession in 2023
Fannie Mae predicts that a mild recession is on the horizon, and it may occur in 2023. During the third quarter of 2022, Fannie Mae significantly raised its gross domestic product (GDP) forecast to 2.3% per-year growth. The figure is substantially higher than its previous economic growth forecast of 1.3%.
However, the economy is predicted to contract by 0.7% in the fourth quarter. It is in contrast with the previous forecast of 0.7% growth. According to Fannie Mae, GDP is anticipated to remain negative throughout the third quarter of 2023 as the economy plunges into a modest recession.
How Does a Recession Affect the Housing Market?
As the country enters a slight recession, the Fed is likely to ease with its interest rate hikes. It means that people will be able to access financing easily, allowing them to finance a home purchase. When it happens, demand will continue to rise, and so will the prices for housing. Consequently, the housing market will slowly recover, and a crash will not push through.
Homebuyers, homeowners, and investors concerned about a market crash need to stay on top of the unemployment rates in their localities. If employment rates remain good, people will still have the means and resources to pay their bills. So long as the recession remains mild and under control, and jobs are still available, there won’t be a housing market crash in 2023.
“The housing market will not crash in 2023 because of healthy fundamentals. The United States still has a national housing shortage where there are more people looking for housing than there is available housing.
The recent seller’s market drove housing prices up extremely high, so we will see price depression that will still keep properties in a good equity position where owners can sell for profits.”
Mark Severino, Real Estate Investor, Best Texas House Buyers LLC
“Even though the housing market is showing signs of slowing down, it is not likely to crash in 2023. The increasing mortgage rates and prices along with the inflation is hurting the affordability of buyers. But at the same time, inventory is growing a bit. All these forces together will cause the market to slow down a bit, but a market crash would be too much to expect.”
Wesley Willoughby, Real Estate Specialist, The Music City Group of Benchmark Realty
7. Plenty of Buyers Are Pulling Back
It’s not a surprise that the hot housing market is now starting to cool off. Unfortunately, some homebuilders forecast a steeper downturn for the housing market in 2023. Many homebuyers are being scared away by the rising interest rates. As a result, new orders start to dry up, which is not good news for homebuilders.
Currently, home builders in the US are benefiting more from the surging demand from homebuyers and investors. As the demand rose and the inventory fell for the past couple of years, home prices were rising at record highs. However, homebuilders couldn’t keep up with the soaring orders.
Actually, the COVID era was the golden years for homebuilders. However, it lasted only a short time. In fact, according to the US Census Bureau, housing starts for single-family homes significantly dropped by nearly 19% year-over-year in September. Building permits fell by 17%, and cancellation rates rose to as high as 24% during the third quarter of 2022.
Does This Mean There Will Be a Housing Market Crash in 2023?
Based on the above figures, some experts forecast that the housing market is in for a downward spiral next year. The reason why many buyers are backing out is because of the rising mortgage rates. However, if Fannie Mae’s prediction about a slight recession in 2023 will happen, then a big housing crash is highly unlikely to happen.
Real estate investors should better keep an eye out for possible red flags before making a move, especially if they are not so sure about how to proceed. As of the moment, nothing is set in stone and we can only hope for the best.
Investors who are really serious about buying an investment property should strategize carefully and choose where to invest based on thorough research and analysis. When the real estate market is uncertain, it’s essential to invest in locations that are proven to stay abreast of all possible industry changes.
“Home prices will fall in about half the markets in the US next year, with forecasted 0% home-price growth. Single-family home sales last month are down a whopping 23.0% from September 2021 which predicts the likelihood of a market crash in the coming year.”
Theresa Raymond, Principal Broker/Owner, TN Smoky Mtn Realty
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8. Real Estate Market Will Likely Shift to a Buyers’ Market
Many investors are interested in whether the 2023 real estate market will remain a sellers’ market. The short answer is no. Real estate experts believe that due to the possible downturn, the market will most likely shift to a buyers’ market by the summer or fall of 2023.
However, keep in mind that with the anticipated challenges in the real estate market in 2023, it won’t be easy for either buyers or sellers. Homesellers should review the best tactics for pricing and marketing strategies to ensure that they can still sell for a profit.
On the other hand, while buyers find the above forecast favorable, the high interest rates may not work in everyone’s favor. In general, cash buyers are those who will benefit the most from this forecast. If you’re an investor planning to invest in rentals, it’s important to have a strong game plan to ensure that you can charge your expenses and mortgage cost to your rent.
Generally, thorough market research and analysis are necessary to ensure that you’re buying in the right market that will likely help you generate strong cash flow.
Other Factors That May Affect the Market Shift
Keep in mind that, just like any other prediction, nothing is final. No one can make a certain forecast, for sure. Other factors may adversely affect this possible shift, which may ultimately not happen at all.
For instance, there’s a possibility that the demand for housing from new buyers would continue to increase as predicted while the rising inventory could still not keep up. If it happens, the market will likely remain a sellers’ market.
“Considering the current market trends and characteristics, it can be said that the 2023 housing market will come with plenty of positive trends and outcomes. As the mortgage rates and home prices are on the rise, the number of available buyers on the market is diminishing. Eventually, the competition is getting cooled down.
Even though this is leading to a switch towards a buyer’s market, the inventory is not just enriched yet to come to a conclusion. Considering the overall situation, it is safe to say that the market will shift a bit towards the buyers’ side, but will still be in the sellers’ dominance.”
Sal Dimiceli, Sr., Owner, Lake Geneva Area Realty
“Although housing prices dropped a bit more than earlier this year, the US market is still a seller’s market. Moreover, the amount of available inventory of houses does not meet the current buyer demand.”
Martin Carreon, Broker/Owner, Soco Wine Country Properties
Real Estate Market Trends and Forecasts to Help You Make the Right Decision
The fate of the real estate market in 2023 remains uncertain. We are now experiencing the beginning of a cooling off since the US housing market began expanding during the pandemic. While it may seem problematic for some investors and home sellers, the general outlook of the real estate market is still positive in 2023.
The key to a successful real estate investing is knowing what you are doing. It’s critical to come up with a proper game plan to ensure that you are investing in the right market and buying the right income property. It takes proper research and comprehensive analysis to be able to make the right decision.
While the 2023 real estate market anticipates several challenges ahead, it’s still a good year to buy an investment property. Here are a few of the trends and predictions that will help you make the right investment decision:
9. Short Term Rentals Will Remain Strong in 2023
If there’s one thing that real estate investors should look forward to in 2023, short term rentals will remain strong. After more than two years of restrictions, the short term rental market has begun to show signs of recovery. Based on the current Airbnb rental data, short term rental owners have re-established their investments and are now generating high returns.
It is due to the influx of eager travelers excited to travel once again after staying home for almost a couple of years. In fact, according to a report from the US Travel Association, the monthly travel expenses in April 2022 increased by 3% compared to the same time the previous year.
Short Term Rentals Will Be the More Lucrative Rental Strategy
By 2023, the short term rental market is expected to be the more profitable investment strategy than long term rentals. It’s worth noting that not all markets in the US can be a lucrative short term rental investment. Just like investing in long term rentals, it’s crucial to study the market first and choose your location carefully to ensure that you’re buying into a profitable market.
“Airbnb growth will flourish in 2023 since people may continue to work remotely, and some will choose to travel to new locations for extended periods. Moreover, because this rental strategy provides higher rental income than long term rental properties and more predictability and stability in terms of occupancy, Airbnb’s growth will rise in 2023.”
Theresa Raymond, Principal Broker/Owner, TN Smoky Mtn Realty
“Airbnb continues to gain popularity year after year. It is safe to say that short term rentals will be even more popular in 2023. Airbnb has already succeeded in markets such as San Francisco and New York City, with high demand for rental properties.
Additionally, its business model allows users to earn money through short-term rentals and by renting out extra space, such as whole apartments or houses on the site.”
Zackary Smigel, Real Estate License Wizard
10. Demand Will Rise in Secondary and Tertiary Real Estate Markets
Experts believe that rental investment opportunities will become more abundant in the secondary and tertiary markets. Small, rural markets offer continued growth in rental property investing, making them great places to consider if you plan to invest in rentals.
Due to the pandemic, there is a rising migration from highly saturated cities to more remote areas. We’ve witnessed a massive move from primary real estate markets, such as New York, Boston, Chicago, and Los Angeles, to secondary and tertiary markets. This move is made possible because of work-from-home setups adopted by many companies.
Since work-from-home policies have become the new normal, we expect that the small markets will continue to grow until 2023 and beyond. The current trend is driven by the desire of many individuals who prefer to stay away from bustling cities and highly urbanized settings.
The comfort, security, and peaceful ambiance of small towns and rural areas are more desirable to a lot of people. With the current market uncertainties, however, many will decide to rent rather than buy a home. It means that rental property investors will see more investment opportunities in these areas.
“Real estate investors should be focused on smaller cities and large towns with low crime rates and lower home prices but near areas with robust job markets. A key part of this would be looking at rural suburbs of a larger city. Think of a town of 5,000 people within 10 miles of a city of 50,000 or several cities within 10 miles that have 25,000 to 35,000 people.”
Chuck Vander Stelt, Real estate agent/broker/REALTOR®, Quadwalls.com
Top 5 States People Are Moving To
One of the most common reasons why people are moving to other parts of the US is work-related. As mentioned, the current work-from-home arrangement allows Americans to stay in places where they feel they will achieve a better quality of life.
Other reasons people move from one state to another include retirement, lifestyle changes, more favorable cost of living, and relocating closer to family. Now the question is, where do people migrate to?
Data shows that most people move to southern states because of the warmer climate and more favorable taxes. In 2023, people are still expected to favor the said states should they decide to migrate.
Here are five of the top states that have seen a significant increase in population over the past couple of years due to migration:
Most Florida housing market predictions forecast a strong real estate in the Sunshine State. It is because aside from being one of the most favorite states to move to, Florida is also a popular tourist destination. Investors looking to buy income property for either long term or short term rental investment will have various opportunities to generate good returns.
Florida is also famous for having low taxes compared to other large states. Plus, affordable housing is also available, providing more opportunities for investors and residents alike. Additionally, the influx of residents to the Sunshine State is due to the warmer climate and sandy beaches, which offer an endless summer feel.
Texas is also one of the top states that have seen an increase in population over the past couple of years. The state’s conservative political environment is one of the reasons why people are moving to the Lone Star State. Further, it also offers low taxes, a low cost of living, excellent weather, and a strong economy, making it a popular migration destination.
Tennessee is one of the most desirable states for tourists and residents alike. If you want to invest in a place that offers a vacation feel, the state is the perfect place for you. It is famous for its low cost of living, growing job opportunities, beautiful sceneries, favorable taxes, and close-to-nature ambiance, making it a perfect home for young families and retirees.
4. North Carolina
The most common drivers of North Carolina’s population increase are related to work, weather, and family. The state is the best location for outdoor enthusiasts because it offers several options for outdoor activities. It is great for young professionals and young families looking for a more adventurous place to live in.
Just like North Carolina, Georgia is also an excellent place for those who are looking for outdoor activity opportunities. The state is also known for its favorable weather and picturesque views.
Georgia experiences mild winters and tropical summers and is home to beautiful beaches and scenic mountain terrains. Plus, it boasts low housing costs and a robust job market.
Bonus: Top 3 Cities to Invest in Rentals According to Experts
We’ve spoken to real estate experts who shared the top three cities to invest in rentals. Coincidentally, the top three cities mentioned belong to three of the top five states where people are migrating to. The cities include Austin, Nashville, and Charlotte.
“The top cities for rentals include Austin, TX, Nashville, TN, and Charlotte, NC. These areas have strong job growth and good migration to the cities.”
Omer Reiner, Licensed Real Estate Consultant, FL Cash Home Buyers
Here are the reasons why investing in Austin, Nashville, and Charlotte rental markets is a good idea, according to Gunner Davis, Realtor and team leader of Team Davis – Coldwell Banker Realty:
1. Austin, TX
Austin is a great place to invest, because of several favorable conditions. There is no income tax here, and the land is abundant. Many professionals are escaping from major cities like Los Angeles and New York, and Austin is their top preference.
Austin has a high median home value of $442,188 and a sound employment rate of 4.7%. Though the median home value is high, it is worth it considering the high-income potential—an average rental yields around $1,225 per month in Austin.
2. Nashville, TN
Nashville is strategically located at the center of Tennessee, which makes it a favorite location for businesses and investors. It is a major tourism hub that is supported by the government, healthcare, education, and other sectors.
Housing prices in Nashville have continued to increase over the past five years. However, the cost of living is still quite low. With an annual employment rate of +3.9% and a median home value of $320,617, Nashville is a sensible place to invest in.
3. Charlotte, NC
Charlotte enjoys a bustling economy, and it is rated as one of the best real estate markets in the US. It is home to several Fortune 500 companies, including Lowe’s and Bank of America. The city is a major banking and tech hub, and it’s also one of the fastest-growing cities in the US.
Despite the pandemic, property value is increasing in Charlotte. It boasts a high standard of living, a sound economy, and a low cost of living. All the said reasons make it a solid bet for purchasing a rental property that will appreciate over time. Plus, the employment rate in Charlotte is +5.1%, and the median home value is $271,805.
Is 2023 a Good Time to Invest in the Real Estate Market?
Timing the market is one of the most important strategies that can help investors become successful in real estate. However, even though a housing market forecast is available, the predictions are not final and irreversible. The best way to time the market is to be constantly updated and to conduct a consistent market analysis.
However, studying and analyzing the real estate market on a regular basis can be arduous and time-consuming. Fortunately, you can get updates about the market with the use of an online real estate analytics platform like Mashvisor. With Mashvisor, you can easily find the best investment property in the most profitable real estate market.
Mashvisor’s analysis is based on accurate and up-to-date real estate data that can help you gauge an investment property’s profitability. You’ll get access to necessary figures, including cash on cash return, cap rate, expected expenses, monthly rental income, and cash flow. You can also use the investment property calculator to compute how much you can earn.
To learn more about how Mashvisor can help you find profitable investment properties, schedule a demo.