The real estate market has been up and down since the start of the pandemic, but analysts think that 2022 may be the year where we start to see some stability. When it comes to choosing the best markets for real estate investing, there are several questions that you have to ask yourself before deciding because what is best for one investor may not be what’s best for you.
Many investors know that location is one of the most important factors when it comes to real estate investing, but what does that mean? Does that mean that there are only specific locations worth investing in? No, if that were the case, investors would only invest in specific locations, which we know is not the reality of the situation.
Yes, location is important, but if you are looking to buy, sell, rent, or flip a property, there are several other factors to consider.
The Pandemic and The Housing Market
So how did the pandemic affect the real estate market? For starters, it affected both the supply and demand for housing. At the beginning of the pandemic, there was a significant drop in nationwide home sales, making it the lowest it had been since the housing and financial crisis in 2007. The drop was likely caused by uncertainty, job losses, and stay-at-home orders. After June 2020 (roughly four months into the beginning of the Covid-19 pandemic), the market improved, and housing sales began to show improvement.
Fast forward to today, and housing prices are rising quickly, but why? As we said, it all comes down to supply and demand. If there are fewer homes and properties for sale, prospective buyers will bid higher prices to get a home, and this is what we are seeing right now. Buyer demand recovered, but supply isn’t quite there yet.
The S&P CoreLogic Case-Shiller National Home Price NSA Index, which tracks housing price changes, illustrated housing prices had risen 9.5 percent in November 2020 compared to November 2019.
How Does This Affect Fix n’ Flip Properties?
As you may know, the housing market doesn’t simply affect buyers and sellers; it also impacts rental property investors and house-flippers. If you are an experienced flipper, you know that fix n’ flip properties can be a quick way to make a profit, if you know what you’re doing. As the market fluctuates, flippers should be aware of the increase in comp property value and how it may affect the project’s overall cost, including construction, building materials, and labor costs (especially if you are borrowing from a private lender or hard-money lender).
Best Markets For Real Estate Investing
So what are the best markets for real estate investing in 2022? Well, as we said, the answer may be different depending on whether you are looking for a distressed property, rental property, or single-family home. When it comes to finding the best markets or cities to invest in real estate, consider job growth, population growth, and affordability.
The top 5 markets, according to Emerging Trends in Real Estate, consider economic and financial factors but they also consider socioeconomic factors and overall real estate development. Here are the top 5 markets within each category to watch in 2022 :
Overall Real Estate Development:
- Raleigh/Durham, North Carolina
- Austin, Texas
- Nashville, Tennessee
- Dallas/ Fortworth, Texas
- Charlotte, North Carolina
Home Builders Development:
- Raleigh/Durham, North Carolina
- Austin, Texas
- Dallas/ Fort Worth, Texas
- Jacksonville, Florida
- Tampa/St. Petersburg, Florida
House Flipping Projects:
- Pittsburgh, Pennsylvania
- New Orleans, Louisiana
- Denver, Colorado
- Greensboro, North Carolina
- West Valley City, Utah
When it comes to the best markets to flip a home, there are several other factors to consider such as homeownership rate, median household income, monthly costs, average listing/sell price, the average time to sell, and home value. Despite the volatility of the real estate market and other rising costs due to inflation, house flippers are still seeing significant profits. Last year, U.S. house flippers earned an average gross profit of over $67,000 per property, according to Attom Data Solutions.
If you are looking for the best markets for real estate investing in 2022, be sure to do your research. There are pros and cons to each type of real estate investment, but if you have questions about hard money loans or fix n’ flip projects, contact HouseMax Funding today!
