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Ask, “How’s the housing market?” to anyone braving the open-house trenches these days, and you may hear two wildly different reactions depending on where they are looking.
In the Northeast and Midwest, shoppers are hurting. Median home prices in the Northeast rose by 4.2% annually to $543,300, and in the Midwest they gained 3.4% to hit $337,600, according to June data from the National Association of Realtors (NAR).
In the South, however, prices remain more or less flat at $374,500—or are even falling in certain areas like Florida.
This tale of two markets doesn’t just apply to where buyers are shopping, but what they want to buy. The NAR also found that the median price of existing homes reached a record high of $435,300—however, newly-built home prices declined annually in June by 2.9% to $401,800, per the US Census Bureau.
What weird, upside-down world are we in when you can buy a brand-spanking new home for a lot less than one that’s already been lived in?
How real estate investors are dealing
Much of the housing market’s mixed messages boil down to differences in the local supply of homes for sale, including what’s being built.
New construction has been booming in the South, where more than half of all US building permits were issued last year. But as housing supply ballooned, prices softened. Although home sellers down South are hurting, many buyers aren’t all too eager to dig into these deals, since they’re hobbled by high interest rates.
Still, if there’s one group of buyers who’s feeling cautiously bullish right now, it’s real estate investors, who have surveyed the landscape and see opportunities.
“As an investor focused on buying houses from motivated sellers in Florida, I’ve been shifting my attention toward Cape Coral, Tampa, and parts of the Panhandle, where I’ve been able to find discounted properties that wouldn’t have penciled out a year ago,” Ron Myers of RonBuysFloridaHomes.com told Brew Markets. “I’ve doubled down, and am adjusting my strategy to stay ahead of it.”
Meanwhile, New Orleans—recently dubbed the “toughest housing market in America,” where prices have plummeted since 2000—may have bottomed out and could be turning a corner.
“We’ve been through our downturn already, since the local market softened earlier than most of the country,” explained Steve Keighery at Home Buyer Louisiana. As a result, “New Orleans may be past the worst and now presents a contrarian buying opportunity. There’s less competition, more motivated sellers, and frankly, better deals.”
As for the Northeast? Lancaster, PA-based investor Austin Glanzer at 717HomeBuyers told Brew Markets that, “The Northeast has low inventory, so buyers are still showing up if the product is right” despite the high price. “I used to flip nearly everything, but now I’m holding more properties long-term,” he said, adding that he now owns around 20 rental units.
Let these plucky pearls of optimism serve as a reminder that no matter where you are, every market, even if it’s down, has its upsides.—JD
Want more great insights into the wild world of real estate investing? Take a look at The Playbook, Morning Brew’s source for expert real estate advice.