Declining Home Prices In These Cities
Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
Sharing the Freddie Mac Worst Cities in terms of declining values. Boom towns zoom towns going down.
Probably time to sell in Boise.
Declining Home Prices In These Cities
Most Popular Reply
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
2yI saw a video talking about 2022 California to Texas migration. It said 53,000 households had moved. I thought, that sounds kinda small and insignificant. Then they said those households had more than $7billion in income they brought with them, saving over $700 million/yr in state income tax.
That’s a household making $140k/yr. One well paid worker or 2 decently paid workers. That’s the real problem for California. People who can afford to leave will and with the top 1/2 of 1% of the population paying 50% of the taxes it’s a real top heavy load to bear.
And let me tell you, they don’t even talk about their influence on Vegas any more, but we have become California East. The same people talking about the great California exodus insist on tying the same policies here. I always hoped to live long enough to see the California collapse, but I may leave Vegas by then. What’s left? Tennessee?
64 Replies
- Member since 2019 · 7k+ posts · 4k+ votes2y
I think there're sizeable number. I have close friend that during 2020 he HELOC his Fremont,CA to buy SF in Austin with cash. In face value he lost $40k now. I also have ex manager that moved to Boise and he's facing layoffs. These are people that I know. I also have friend that lost his job in San francisco and he has to let go his condo in SF that he purchased during 2021 hype. Most LP investors that invested during 2020-2021 are losing money rn.
This is why I dont invest following stranger on Biggerpocket advice. These are so predictable outcomes.Luckily with tools like ZHI or Fannie Mae tools we can check if appreciation is sustainable or not.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @John Morgan:
So in a nutshell, all these cities are still up 30-50% in the last 3 years even after a 10% or so decline from about a year ago. That’s an insane gain even with prices correcting! But I do see a trend of migration from blue western states to red states like Texas and the south. So that’s where I’m investing due to high job growth, housing demand and low inventory. Lowering interest rates will stoke demand this spring time or sooner in business friendly states like Texas.
The first "spike" is usually following the first wave of migration pattern that occured in 2019.
I am closely watching too if there's second wave out of migration from CA this year as the number of layoffs are gigantic. We're closely following 2001 dotcom bust here, if we interviews most CEO I don't think they have optimistic view about the job market. So either the job move to Ohio/Austin/Arizona or India...we would see in three years period.
- 2yAxel MeierhoeferPro MemberRental Property Investor · Escondido, CA · Member since 2017 · 679 posts · 550 votes
@Caroline Gerardo Thanks for sharing. This si really helpful for investors who were or are looking for appreciation as their main goal.
I am investing for cash flow. Obviously I love the appreciation that might occur but the only use will be to get HELOC against the equity so I can add more properties to my portfolio.
For anybody who is considering that approach on properties in these locations should probably keep a bigger buffer in their HEKOC use than the 20%-25% the banks/lenders require anyway.
- 2yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
if we followed BP advice every single one of us would invest in, and only in, Columbus =)
- Flipper/Rehabber · CA · Member since 2023 · 1k+ posts · 1k+ votes2y
Quote from @Nicholas L.:
what @Mike Dymski said. these declines get a disproportionate amount of attention... i can't listen to a podcast without hearing about the decline in Boise, which is the... 94th largest city in the US.
not saying it's not interesting but i don't know what decisions it drives.
The size of the city is unimportant, flipping a million dollar house in the treasure valley or silicon valley share similarities. Leaving 5% to 10% "on the table has an effect on the bottom line.
- 2yJohn MorganPro MemberRental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votesIf we get a business friendly administration in next year, I see businesses having more confidence again as well. So that could change things up for the good. Lots to consider. But migration from western states is something to watch. Especially watching the business friendly states that lure them in. That’s where I would focus on RE.
Quote from @Carlos Ptriawan:
Quote from @John Morgan:
So in a nutshell, all these cities are still up 30-50% in the last 3 years even after a 10% or so decline from about a year ago. That’s an insane gain even with prices correcting! But I do see a trend of migration from blue western states to red states like Texas and the south. So that’s where I’m investing due to high job growth, housing demand and low inventory. Lowering interest rates will stoke demand this spring time or sooner in business friendly states like Texas.
The first "spike" is usually following the first wave of migration pattern that occured in 2019.
I am closely watching too if there's second wave out of migration from CA this year as the number of layoffs are gigantic. We're closely following 2001 dotcom bust here, if we interviews most CEO I don't think they have optimistic view about the job market. So either the job move to Ohio/Austin/Arizona or India...we would see in three years period.
- 2yAxel MeierhoeferPro MemberRental Property Investor · Escondido, CA · Member since 2017 · 679 posts · 550 votes
Quote from @Nicholas L.:
if we followed BP advice every single one of us would invest in, and only in, Columbus =)
That made me laugh. True, there are many many folks suggesting that city. While it would be silly, there are good locations in Ohio and some other states.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Axel Meierhoefer:
Quote from @Nicholas L.:
if we followed BP advice every single one of us would invest in, and only in, Columbus =)
That made me laugh. True, there are many many folks suggesting that city. While it would be silly, there are good locations in Ohio and some other states.
Now I really want to invest in South Dakota and Iowa lol
- 2yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
agree, it definitely matters a lot to those it impacts and swings like that can kill a deal. my point was just that Boise gets a disproportionate amount of media coverage based on its size.
- Investor · Member since 2021 · 591 posts · 695 votes2y
@Caroline Gerardo interesting data...
Real estate values can be (and usually are) hyper local, which can make city-wide data difficult to interpret.
In my market, the entire metro area is down approx. 6% off the peak, but in some zip codes we're down 20%, and in other zip codes we're up 10%+ (and these zip codes are only a 5-10 minute drive from each other!).
The story gets more interesting when you start looking at that type of neighborhood-level data and trying to deduce why one neighborhood would be down 20% and another is up 10% in the same city...
In my city, there's some data suggesting that the most affluent zip codes are up 8-11% YOY, presumably because the buyers in those areas are cash buyers not affected by interest rates, and who probably did pretty well in '23, based on macroeconomic data... but that conclusion isn't foolproof, because we do have some very affluent areas that are down 11%, and there are also some very low SES areas that are up 5-10%....so, I don't know...
A conclusion is only as strong as the quality of the data, and the data is sending some mixed signals, at least in my market....
- 2yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votesThat seems similar to most major metros. The A++ areas are up 10%, then A+ & A areas are down and the A- are real down. The high Cs, low Bs are up too. It's basically a higher floor, and and even higher ceiling but the above average are suffering. The real crunch is in the people who use to do really well, two people making $100k ea is not like it was 5 years ago.
Quote from @Leo R.:
@Caroline Gerardo interesting data...
Real estate values can be (and usually are) hyper local, which can make city-wide data difficult to interpret.
In my market, the entire metro area is down approx. 6% off the peak, but in some zip codes we're down 20%, and in other zip codes we're up 10%+ (and these zip codes are only a 5-10 minute drive from each other!).
The story gets more interesting when you start looking at that type of neighborhood-level data and trying to deduce why one neighborhood would be down 20% and another is up 10% in the same city...
In my city, there's some data suggesting that the most affluent zip codes are up 8-11% YOY, presumably because the buyers in those areas are cash buyers not affected by interest rates, and who probably did pretty well in '23, based on macroeconomic data... but that conclusion isn't foolproof, because we do have some very affluent areas that are down 11%, and there are also some very low SES areas that are up 5-10%....so, I don't know...
A conclusion is only as strong as the quality of the data, and the data is sending some mixed signals, at least in my market....
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes2y
Quote from @Nicholas L.:
if we followed BP advice every single one of us would invest in, and only in, Columbus =)
Them Columbus Agents are hungry bro.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes2y
Quote from @Carlos Ptriawan:
Quote from @Caroline Gerardo:
some of these cities are appreciating because of the remote workers from California, now the same worker has to come back to CA LOL
Austin is in the list more or less because of "following the herd" mentality among the builder though lolHuh.......
Now wouldn't that be something if someone had predicted such a consolidation...... Lol.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @James Wise:
Quote from @Nicholas L.:
if we followed BP advice every single one of us would invest in, and only in, Columbus =)
Them Columbus Agents are hungry bro.
If all agents are like Columbus agent our homes prices are skyrocketing everywhere lol
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes2y
Quote from @V.G Jason:
That seems similar to most major metros. The A++ areas are up 10%, then A+ & A areas are down and the A- are real down. The high Cs, low Bs are up too. It's basically a higher floor, and and even higher ceiling but the above average are suffering. The real crunch is in the people who use to do really well, two people making $100k ea is not like it was 5 years ago.Quote from @Leo R.:
@Caroline Gerardo interesting data...
Real estate values can be (and usually are) hyper local, which can make city-wide data difficult to interpret.
In my market, the entire metro area is down approx. 6% off the peak, but in some zip codes we're down 20%, and in other zip codes we're up 10%+ (and these zip codes are only a 5-10 minute drive from each other!).
The story gets more interesting when you start looking at that type of neighborhood-level data and trying to deduce why one neighborhood would be down 20% and another is up 10% in the same city...
In my city, there's some data suggesting that the most affluent zip codes are up 8-11% YOY, presumably because the buyers in those areas are cash buyers not affected by interest rates, and who probably did pretty well in '23, based on macroeconomic data... but that conclusion isn't foolproof, because we do have some very affluent areas that are down 11%, and there are also some very low SES areas that are up 5-10%....so, I don't know...
A conclusion is only as strong as the quality of the data, and the data is sending some mixed signals, at least in my market....
My market's are performing exactly as predicted.... which honestly get's a feeling of unease at times because it's almost unexpected things to go so exactly as expected, lol.
This consolidation event will continue. Which I have written about over the year so i will save the deep dive. In short; market's who ran "red-hot" on inbound migration will settle, as will prices a bit, which some may take as "bad" but it's good as consolidation means new foundation which supports forward pricing actions.
Those lagert satellite market's will be the focus of "explosive" appreciation as price leveling presses outward migration for "affordability".
And as market rent stabilization at new found levels solidifies more (generally a 3yr cycle for such), this will support additional future rental rate appreciation after a consolidation term, as well as again supporting satellite market appreciation "pop's".
'24' market's of note for "big profit's" will be on a micro scale vs previous years, and in micro volume given market sizes of scale. Also leading to more variety of exact locations, forcing a much higher level or professionalism in pegging exact such markets.
Real Estate Agent's as a whole will have an "apocalyptic" year, as many fail out in mass MOM. Which is a GOOD thing, because of the extreme glut of agent's grown since rise of the pandemic agent. And again, consolidation is a good thing, it get's things to a healthy point.
Unless.......
If politics decides to go "full-Monty" with insanity, throw off all sense, and get real crazy with things ushering in a NINJa 2.0, get ready for things to get full-out "Twilight Zone". A printing press of USD at this point, wow, it would do a lot more than the average bear probably knows. In that scenario I am going the only safe route; all in on asset's, all out on cash. All as in ALL.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @James Hamling:
Quote from @V.G Jason:
That seems similar to most major metros. The A++ areas are up 10%, then A+ & A areas are down and the A- are real down. The high Cs, low Bs are up too. It's basically a higher floor, and and even higher ceiling but the above average are suffering. The real crunch is in the people who use to do really well, two people making $100k ea is not like it was 5 years ago.Quote from @Leo R.:
@Caroline Gerardo interesting data...
Real estate values can be (and usually are) hyper local, which can make city-wide data difficult to interpret.
In my market, the entire metro area is down approx. 6% off the peak, but in some zip codes we're down 20%, and in other zip codes we're up 10%+ (and these zip codes are only a 5-10 minute drive from each other!).
The story gets more interesting when you start looking at that type of neighborhood-level data and trying to deduce why one neighborhood would be down 20% and another is up 10% in the same city...
In my city, there's some data suggesting that the most affluent zip codes are up 8-11% YOY, presumably because the buyers in those areas are cash buyers not affected by interest rates, and who probably did pretty well in '23, based on macroeconomic data... but that conclusion isn't foolproof, because we do have some very affluent areas that are down 11%, and there are also some very low SES areas that are up 5-10%....so, I don't know...
A conclusion is only as strong as the quality of the data, and the data is sending some mixed signals, at least in my market....
My market's are performing exactly as predicted.... which honestly get's a feeling of unease at times because it's almost unexpected things to go so exactly as expected, lol.
This consolidation event will continue. Which I have written about over the year so i will save the deep dive. In short; market's who ran "red-hot" on inbound migration will settle, as will prices a bit, which some may take as "bad" but it's good as consolidation means new foundation which supports forward pricing actions.
Those lagert satellite market's will be the focus of "explosive" appreciation as price leveling presses outward migration for "affordability".
And as market rent stabilization at new found levels solidifies more (generally a 3yr cycle for such), this will support additional future rental rate appreciation after a consolidation term, as well as again supporting satellite market appreciation "pop's".
'24' market's of note for "big profit's" will be on a micro scale vs previous years, and in micro volume given market sizes of scale. Also leading to more variety of exact locations, forcing a much higher level or professionalism in pegging exact such markets.
This thread really needs your utilization and commentary James before someone saying no that's not my market because they unable to digest the data LOL - Member since 2022 · 75 posts · 73 votes2y
Boise Realtor here! Thank for sharing this but I think it's funny when you say "time to sell in Boise" From what I am seeing we saw HUGE growth in 2020-2022 (and even before then we were making top 10 best place to live lists for a decade) Our market has held strong around $530-$550k average home price for the last two years even with rates doubling. I am currently seeing multiple offers, lower on market time and high confidence in our market. I personally think it's the best time to buy in Boise because I don't think our prices will ever be lower than they are now. We have HUGE companies in the tech sector investing billions here and Idaho being a red/landlord friendly state is still causing a lot of migration from west coast states.
If rates do go down this year I think we are prime for another explosion.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @Tracy Ross:
Boise Realtor here! Thank for sharing this but I think it's funny when you say "time to sell in Boise" From what I am seeing we saw HUGE growth in 2020-2022 (and even before then we were making top 10 best place to live lists for a decade) Our market has held strong around $530-$550k average home price for the last two years even with rates doubling. I am currently seeing multiple offers, lower on market time and high confidence in our market. I personally think it's the best time to buy in Boise because I don't think our prices will ever be lower than they are now. We have HUGE companies in the tech sector investing billions here and Idaho being a red/landlord friendly state is still causing a lot of migration from west coast states.
If rates do go down this year I think we are prime for another explosion.
See James now every realtor would defend their market :-) :-) this is why I no longer post something that our friendly realtor would not like to hear LOL nothing wrong though .... hahaha
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes2y
Quote from @Carlos Ptriawan:
Quote from @James Hamling:
Quote from @V.G Jason:
That seems similar to most major metros. The A++ areas are up 10%, then A+ & A areas are down and the A- are real down. The high Cs, low Bs are up too. It's basically a higher floor, and and even higher ceiling but the above average are suffering. The real crunch is in the people who use to do really well, two people making $100k ea is not like it was 5 years ago.Quote from @Leo R.:
@Caroline Gerardo interesting data...
Real estate values can be (and usually are) hyper local, which can make city-wide data difficult to interpret.
In my market, the entire metro area is down approx. 6% off the peak, but in some zip codes we're down 20%, and in other zip codes we're up 10%+ (and these zip codes are only a 5-10 minute drive from each other!).
The story gets more interesting when you start looking at that type of neighborhood-level data and trying to deduce why one neighborhood would be down 20% and another is up 10% in the same city...
In my city, there's some data suggesting that the most affluent zip codes are up 8-11% YOY, presumably because the buyers in those areas are cash buyers not affected by interest rates, and who probably did pretty well in '23, based on macroeconomic data... but that conclusion isn't foolproof, because we do have some very affluent areas that are down 11%, and there are also some very low SES areas that are up 5-10%....so, I don't know...
A conclusion is only as strong as the quality of the data, and the data is sending some mixed signals, at least in my market....
My market's are performing exactly as predicted.... which honestly get's a feeling of unease at times because it's almost unexpected things to go so exactly as expected, lol.
This consolidation event will continue. Which I have written about over the year so i will save the deep dive. In short; market's who ran "red-hot" on inbound migration will settle, as will prices a bit, which some may take as "bad" but it's good as consolidation means new foundation which supports forward pricing actions.
Those lagert satellite market's will be the focus of "explosive" appreciation as price leveling presses outward migration for "affordability".
And as market rent stabilization at new found levels solidifies more (generally a 3yr cycle for such), this will support additional future rental rate appreciation after a consolidation term, as well as again supporting satellite market appreciation "pop's".
'24' market's of note for "big profit's" will be on a micro scale vs previous years, and in micro volume given market sizes of scale. Also leading to more variety of exact locations, forcing a much higher level or professionalism in pegging exact such markets.
This thread really needs your utilization and commentary James before someone saying no that's not my market because they unable to digest the data LOLRemember when I lent forecasting, MY forecasting, and how many said they FELT things would be xyz different various iterations? And I had to clarify what I thought was obvious that my forecasts are not my opinions, there the MATH of things. And responses of "nobody can predict what things will be" or "everywhere is different"....
So few choose to UNDERSTAND things happening, and as long as that stand's, that mindset, everything that happens will continue to be a surprise for those.
Consolidation should be common sense. But here it is "news". And only stoking people arguing pro or con for there market's of selection, like college football fan's fighting over who's mascot is coolest. Lol.
- 2yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Quote from @James Hamling:
Quote from @V.G Jason:
That seems similar to most major metros. The A++ areas are up 10%, then A+ & A areas are down and the A- are real down. The high Cs, low Bs are up too. It's basically a higher floor, and and even higher ceiling but the above average are suffering. The real crunch is in the people who use to do really well, two people making $100k ea is not like it was 5 years ago.Quote from @Leo R.:
@Caroline Gerardo interesting data...
Real estate values can be (and usually are) hyper local, which can make city-wide data difficult to interpret.
In my market, the entire metro area is down approx. 6% off the peak, but in some zip codes we're down 20%, and in other zip codes we're up 10%+ (and these zip codes are only a 5-10 minute drive from each other!).
The story gets more interesting when you start looking at that type of neighborhood-level data and trying to deduce why one neighborhood would be down 20% and another is up 10% in the same city...
In my city, there's some data suggesting that the most affluent zip codes are up 8-11% YOY, presumably because the buyers in those areas are cash buyers not affected by interest rates, and who probably did pretty well in '23, based on macroeconomic data... but that conclusion isn't foolproof, because we do have some very affluent areas that are down 11%, and there are also some very low SES areas that are up 5-10%....so, I don't know...
A conclusion is only as strong as the quality of the data, and the data is sending some mixed signals, at least in my market....
My market's are performing exactly as predicted.... which honestly get's a feeling of unease at times because it's almost unexpected things to go so exactly as expected, lol.
This consolidation event will continue. Which I have written about over the year so i will save the deep dive. In short; market's who ran "red-hot" on inbound migration will settle, as will prices a bit, which some may take as "bad" but it's good as consolidation means new foundation which supports forward pricing actions.
Those lagert satellite market's will be the focus of "explosive" appreciation as price leveling presses outward migration for "affordability".
And as market rent stabilization at new found levels solidifies more (generally a 3yr cycle for such), this will support additional future rental rate appreciation after a consolidation term, as well as again supporting satellite market appreciation "pop's".
'24' market's of note for "big profit's" will be on a micro scale vs previous years, and in micro volume given market sizes of scale. Also leading to more variety of exact locations, forcing a much higher level or professionalism in pegging exact such markets.
Real Estate Agent's as a whole will have an "apocalyptic" year, as many fail out in mass MOM. Which is a GOOD thing, because of the extreme glut of agent's grown since rise of the pandemic agent. And again, consolidation is a good thing, it get's things to a healthy point.
Unless.......
If politics decides to go "full-Monty" with insanity, throw off all sense, and get real crazy with things ushering in a NINJa 2.0, get ready for things to get full-out "Twilight Zone". A printing press of USD at this point, wow, it would do a lot more than the average bear probably knows. In that scenario I am going the only safe route; all in on asset's, all out on cash. All as in ALL.
If we go ninja 2.0 its to combat keeping rates where they are ish or even higher, yet provide pricing help to buyers. That would be devastating long term(not for me) overall, and fit the mold of fast solutions have slow problems.
In regards to pricing in these large markets, think rent creeps up and home prices creep down creating a tighter RTP in the Austins, Raleighs, Nashvilles, etc. But we will see. I'm seeing that in Dallas; all my rents are up solid but the house prices are definitely coming down in some areas or more DOM.
Satellite markets are hard to research and find. I'm still trying to anticipate where airports and other infrastructure, plus job growth goes. But really when we look back at these posts in 3, 5, 7, 10 years there's going to be some cities we did not even mention that are going to be on the radar. This year I'm taking risks on cities that I think can grow, plus Austin. My floor though is pretty high I feel at the investment level, so I am not terribly concerned about the risk of these never taking off.
- 2yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Quote from @Tracy Ross:
Boise Realtor here! Thank for sharing this but I think it's funny when you say "time to sell in Boise" From what I am seeing we saw HUGE growth in 2020-2022 (and even before then we were making top 10 best place to live lists for a decade) Our market has held strong around $530-$550k average home price for the last two years even with rates doubling. I am currently seeing multiple offers, lower on market time and high confidence in our market. I personally think it's the best time to buy in Boise because I don't think our prices will ever be lower than they are now. We have HUGE companies in the tech sector investing billions here and Idaho being a red/landlord friendly state is still causing a lot of migration from west coast states.
If rates do go down this year I think we are prime for another explosion.
Let these Californians deal with this winter coming up in Boise. Boise had a meteoric rise, just fundamentally there's no way it sustains it. Tech companies--you mean just micron?
Arizona, Northern Nevada, Triangle area and Tennessee have far more projects in tech. Boise will correct, weather will likely be the fundamental reason why. As it usually is for where people want to live. I am betting on Boise & Montana folks to move to AZ & No Nevada, maybe some more pick up in Austin but there's more blood for Austin first. Likewise with re-migrating to California.
Median income in Boise is high, almost $100k, so it can sufficiently keep a $500k + median house price. I just am not betting on another massive explosion. I'd say more correction, think median home prices come down a bit as median incomes come up. There is nothing about Boise that is telling you it's going to price extrinsically. Staying in the 4-6x median income range is about where it'll go.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes2y
Quote from @V.G Jason:
Quote from @James Hamling:
Quote from @V.G Jason:
That seems similar to most major metros. The A++ areas are up 10%, then A+ & A areas are down and the A- are real down. The high Cs, low Bs are up too. It's basically a higher floor, and and even higher ceiling but the above average are suffering. The real crunch is in the people who use to do really well, two people making $100k ea is not like it was 5 years ago.Quote from @Leo R.:
@Caroline Gerardo interesting data...
Real estate values can be (and usually are) hyper local, which can make city-wide data difficult to interpret.
In my market, the entire metro area is down approx. 6% off the peak, but in some zip codes we're down 20%, and in other zip codes we're up 10%+ (and these zip codes are only a 5-10 minute drive from each other!).
The story gets more interesting when you start looking at that type of neighborhood-level data and trying to deduce why one neighborhood would be down 20% and another is up 10% in the same city...
In my city, there's some data suggesting that the most affluent zip codes are up 8-11% YOY, presumably because the buyers in those areas are cash buyers not affected by interest rates, and who probably did pretty well in '23, based on macroeconomic data... but that conclusion isn't foolproof, because we do have some very affluent areas that are down 11%, and there are also some very low SES areas that are up 5-10%....so, I don't know...
A conclusion is only as strong as the quality of the data, and the data is sending some mixed signals, at least in my market....
My market's are performing exactly as predicted.... which honestly get's a feeling of unease at times because it's almost unexpected things to go so exactly as expected, lol.
This consolidation event will continue. Which I have written about over the year so i will save the deep dive. In short; market's who ran "red-hot" on inbound migration will settle, as will prices a bit, which some may take as "bad" but it's good as consolidation means new foundation which supports forward pricing actions.
Those lagert satellite market's will be the focus of "explosive" appreciation as price leveling presses outward migration for "affordability".
And as market rent stabilization at new found levels solidifies more (generally a 3yr cycle for such), this will support additional future rental rate appreciation after a consolidation term, as well as again supporting satellite market appreciation "pop's".
'24' market's of note for "big profit's" will be on a micro scale vs previous years, and in micro volume given market sizes of scale. Also leading to more variety of exact locations, forcing a much higher level or professionalism in pegging exact such markets.
Real Estate Agent's as a whole will have an "apocalyptic" year, as many fail out in mass MOM. Which is a GOOD thing, because of the extreme glut of agent's grown since rise of the pandemic agent. And again, consolidation is a good thing, it get's things to a healthy point.
Unless.......
If politics decides to go "full-Monty" with insanity, throw off all sense, and get real crazy with things ushering in a NINJa 2.0, get ready for things to get full-out "Twilight Zone". A printing press of USD at this point, wow, it would do a lot more than the average bear probably knows. In that scenario I am going the only safe route; all in on asset's, all out on cash. All as in ALL.
If we go ninja 2.0 its to combat keeping rates where they are ish or even higher, yet provide pricing help to buyers. That would be devastating long term(not for me) overall, and fit the mold of fast solutions have slow problems.
In regards to pricing in these large markets, think rent creeps up and home prices creep down creating a tighter RTP in the Austins, Raleighs, Nashvilles, etc. But we will see. I'm seeing that in Dallas; all my rents are up solid but the house prices are definitely coming down in some areas or more DOM.
Satellite markets are hard to research and find. I'm still trying to anticipate where airports and other infrastructure, plus job growth goes. But really when we look back at these posts in 3, 5, 7, 10 years there's going to be some cities we did not even mention that are going to be on the radar. This year I'm taking risks on cities that I think can grow, plus Austin. My floor though is pretty high I feel at the investment level, so I am not terribly concerned about the risk of these never taking off.
A "true" satellite market has certain factor's to it that are unique, and one can use to identify it's viability as such, and with it predict it's direction.
First, think of a place that is disjointed from the main market, but yet fully connected. I know, duality, and that's the point, maybe better said to call them Duality Satellite Markets.
So picture a main market. And within a commute away is a "rural" market fully stand alone. But we find a big %, say 20%+ who live in this "rural market" commute to the main market for employment. Because cost of living is significantly lower in the rural market. So it's a quazi parasitic relationship.
Now the satellite market is it's own thing, has own commerce, everything BUT as said, feed's of the primary market.
Now as prices jump 20%+ concescutive years in primary market, the satelite market has muted appreciation. But, then start's later kicking in. This is a common theme in these market's, that they trail primary by ~24mnths.
Now, key point is the market's are so close that cost of tangible goods, lumber, roofing, etc. is in parity. So it's really the market labor pricing that lag's.
And there close enough that relocation for affordability is possible, but not so readily done that all in main market immediately transfer over to satellite.
Because as replacement costs of homes goes up, you will find some of these satellite market's have lag in appreciation that put's buy price at or below replacement costs. THAT is a no-brainer entry point, because the market can not sustain below replacement cost.
Again, many specific details on how to identify these satellite "duality" market's, but there is many of them out there.
No, I WON'T list them by name. Why? Because I and my investors are buying there NOW, today, and sorry but I don't want to invite mass competition. Lol.
The opportunity is REAL. It's about understanding the economics of it all, how it all moves, where $ is going, and the gap it holds today. It's equity investing at it's finest, by very definition.
This 1 metric alone will help guide many in finding potentials, look at reproduction cost's than market price properties are trading at. When an electrician can drive 45min to earn at $85hr or stay 5min to home and earn $35, it's simply economics that his local price WILL keep elevating until close enough to the $85 to keep enough electricians in local market to serve. THIS is your market to jump into NOW.
- 2yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Quote from @James Hamling:
Quote from @V.G Jason:
Quote from @James Hamling:
Quote from @V.G Jason:
That seems similar to most major metros. The A++ areas are up 10%, then A+ & A areas are down and the A- are real down. The high Cs, low Bs are up too. It's basically a higher floor, and and even higher ceiling but the above average are suffering. The real crunch is in the people who use to do really well, two people making $100k ea is not like it was 5 years ago.Quote from @Leo R.:
@Caroline Gerardo interesting data...
Real estate values can be (and usually are) hyper local, which can make city-wide data difficult to interpret.
In my market, the entire metro area is down approx. 6% off the peak, but in some zip codes we're down 20%, and in other zip codes we're up 10%+ (and these zip codes are only a 5-10 minute drive from each other!).
The story gets more interesting when you start looking at that type of neighborhood-level data and trying to deduce why one neighborhood would be down 20% and another is up 10% in the same city...
In my city, there's some data suggesting that the most affluent zip codes are up 8-11% YOY, presumably because the buyers in those areas are cash buyers not affected by interest rates, and who probably did pretty well in '23, based on macroeconomic data... but that conclusion isn't foolproof, because we do have some very affluent areas that are down 11%, and there are also some very low SES areas that are up 5-10%....so, I don't know...
A conclusion is only as strong as the quality of the data, and the data is sending some mixed signals, at least in my market....
My market's are performing exactly as predicted.... which honestly get's a feeling of unease at times because it's almost unexpected things to go so exactly as expected, lol.
This consolidation event will continue. Which I have written about over the year so i will save the deep dive. In short; market's who ran "red-hot" on inbound migration will settle, as will prices a bit, which some may take as "bad" but it's good as consolidation means new foundation which supports forward pricing actions.
Those lagert satellite market's will be the focus of "explosive" appreciation as price leveling presses outward migration for "affordability".
And as market rent stabilization at new found levels solidifies more (generally a 3yr cycle for such), this will support additional future rental rate appreciation after a consolidation term, as well as again supporting satellite market appreciation "pop's".
'24' market's of note for "big profit's" will be on a micro scale vs previous years, and in micro volume given market sizes of scale. Also leading to more variety of exact locations, forcing a much higher level or professionalism in pegging exact such markets.
Real Estate Agent's as a whole will have an "apocalyptic" year, as many fail out in mass MOM. Which is a GOOD thing, because of the extreme glut of agent's grown since rise of the pandemic agent. And again, consolidation is a good thing, it get's things to a healthy point.
Unless.......
If politics decides to go "full-Monty" with insanity, throw off all sense, and get real crazy with things ushering in a NINJa 2.0, get ready for things to get full-out "Twilight Zone". A printing press of USD at this point, wow, it would do a lot more than the average bear probably knows. In that scenario I am going the only safe route; all in on asset's, all out on cash. All as in ALL.
If we go ninja 2.0 its to combat keeping rates where they are ish or even higher, yet provide pricing help to buyers. That would be devastating long term(not for me) overall, and fit the mold of fast solutions have slow problems.
In regards to pricing in these large markets, think rent creeps up and home prices creep down creating a tighter RTP in the Austins, Raleighs, Nashvilles, etc. But we will see. I'm seeing that in Dallas; all my rents are up solid but the house prices are definitely coming down in some areas or more DOM.
Satellite markets are hard to research and find. I'm still trying to anticipate where airports and other infrastructure, plus job growth goes. But really when we look back at these posts in 3, 5, 7, 10 years there's going to be some cities we did not even mention that are going to be on the radar. This year I'm taking risks on cities that I think can grow, plus Austin. My floor though is pretty high I feel at the investment level, so I am not terribly concerned about the risk of these never taking off.
A "true" satellite market has certain factor's to it that are unique, and one can use to identify it's viability as such, and with it predict it's direction.
First, think of a place that is disjointed from the main market, but yet fully connected. I know, duality, and that's the point, maybe better said to call them Duality Satellite Markets.
So picture a main market. And within a commute away is a "rural" market fully stand alone. But we find a big %, say 20%+ who live in this "rural market" commute to the main market for employment. Because cost of living is significantly lower in the rural market. So it's a quazi parasitic relationship.
Now the satellite market is it's own thing, has own commerce, everything BUT as said, feed's of the primary market.
Now as prices jump 20%+ concescutive years in primary market, the satelite market has muted appreciation. But, then start's later kicking in. This is a common theme in these market's, that they trail primary by ~24mnths.
Now, key point is the market's are so close that cost of tangible goods, lumber, roofing, etc. is in parity. So it's really the market labor pricing that lag's.
And there close enough that relocation for affordability is possible, but not so readily done that all in main market immediately transfer over to satellite.
Because as replacement costs of homes goes up, you will find some of these satellite market's have lag in appreciation that put's buy price at or below replacement costs. THAT is a no-brainer entry point, because the market can not sustain below replacement cost.
Again, many specific details on how to identify these satellite "duality" market's, but there is many of them out there.
No, I WON'T list them by name. Why? Because I and my investors are buying there NOW, today, and sorry but I don't want to invite mass competition. Lol.
The opportunity is REAL. It's about understanding the economics of it all, how it all moves, where $ is going, and the gap it holds today. It's equity investing at it's finest, by very definition.
This 1 metric alone will help guide many in finding potentials, look at reproduction cost's than market price properties are trading at. When an electrician can drive 45min to earn at $85hr or stay 5min to home and earn $35, it's simply economics that his local price WILL keep elevating until close enough to the $85 to keep enough electricians in local market to serve. THIS is your market to jump into NOW.
Oh yes, I am in some of these too but I just call them the major city as a reference. I'd say about 20-30% of my buys are in these areas. More will be in 2024 though, I needed to line up primo on my plate first before I bought the sides.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes2y
Quote from @V.G Jason:
Quote from @Tracy Ross:
Boise Realtor here! Thank for sharing this but I think it's funny when you say "time to sell in Boise" From what I am seeing we saw HUGE growth in 2020-2022 (and even before then we were making top 10 best place to live lists for a decade) Our market has held strong around $530-$550k average home price for the last two years even with rates doubling. I am currently seeing multiple offers, lower on market time and high confidence in our market. I personally think it's the best time to buy in Boise because I don't think our prices will ever be lower than they are now. We have HUGE companies in the tech sector investing billions here and Idaho being a red/landlord friendly state is still causing a lot of migration from west coast states.
If rates do go down this year I think we are prime for another explosion.
Let these Californians deal with this winter coming up in Boise. Boise had a meteoric rise, just fundamentally there's no way it sustains it. Tech companies--you mean just micron?
Arizona, Northern Nevada, Triangle area and Tennessee have far more projects in tech. Boise will correct, weather will likely be the fundamental reason why. As it usually is for where people want to live. I am betting on Boise & Montana folks to move to AZ & No Nevada, maybe some more pick up in Austin but there's more blood for Austin first. Likewise with re-migrating to California.
Median income in Boise is high, almost $100k, so it can sufficiently keep a $500k + median house price. I just am not betting on another massive explosion. I'd say more correction, think median home prices come down a bit as median incomes come up. There is nothing about Boise that is telling you it's going to price extrinsically. Staying in the 4-6x median income range is about where it'll go.
I find great humor on the CA argument on "Tech": "CA has always been Tech, and will always be Tech, because it always was Tech"......
It's the argument of Dinosaurs, there so great so they'll always be so great, just because of there innate greatness....
If your 20-something, looking to launch you great tech solution, asking where do I locate, do ya choose where tax's are sky high, or next to free? And saying one "NEEDS" to be in CA to attract talent.... how that apply in todays world where your staffing pool is world wide via our connected-verse? What start-up performs better, that recruiting from a 25mile radius of some building, or that restricted to planet Earth via remote functions?
Or your a great programmer, tech engineer, do you want to wake up to inhale the smog, traverse a gauntlet of hobos and feces to buy the morning coffee? Or wake up to the Smokies, the Montana Big Sky, Appalachians, Gulf Cost, Indian Ocean etc etc and live in leisurely peace while logging in to the office?
The meteor already hit, just taking time for some to realize there own extinction.
I wouldn't be surprised to see headline in 10yrs naming Tennessee the new "Tech Capital". It's a NY/CA exodus, only item left is awareness and acknowledgement of such fact. So CA has a coastline, maybe of CA's got out of CA a bit more they'd realize a whole lot of other places also have a coastline too.
- Member since 2019 · 7k+ posts · 4k+ votes2y
Quote from @James Hamling:
Quote from @V.G Jason:
Quote from @Tracy Ross:
Boise Realtor here! Thank for sharing this but I think it's funny when you say "time to sell in Boise" From what I am seeing we saw HUGE growth in 2020-2022 (and even before then we were making top 10 best place to live lists for a decade) Our market has held strong around $530-$550k average home price for the last two years even with rates doubling. I am currently seeing multiple offers, lower on market time and high confidence in our market. I personally think it's the best time to buy in Boise because I don't think our prices will ever be lower than they are now. We have HUGE companies in the tech sector investing billions here and Idaho being a red/landlord friendly state is still causing a lot of migration from west coast states.
If rates do go down this year I think we are prime for another explosion.
Let these Californians deal with this winter coming up in Boise. Boise had a meteoric rise, just fundamentally there's no way it sustains it. Tech companies--you mean just micron?
Arizona, Northern Nevada, Triangle area and Tennessee have far more projects in tech. Boise will correct, weather will likely be the fundamental reason why. As it usually is for where people want to live. I am betting on Boise & Montana folks to move to AZ & No Nevada, maybe some more pick up in Austin but there's more blood for Austin first. Likewise with re-migrating to California.
Median income in Boise is high, almost $100k, so it can sufficiently keep a $500k + median house price. I just am not betting on another massive explosion. I'd say more correction, think median home prices come down a bit as median incomes come up. There is nothing about Boise that is telling you it's going to price extrinsically. Staying in the 4-6x median income range is about where it'll go.
I find great humor on the CA argument on "Tech": "CA has always been Tech, and will always be Tech, because it always was Tech"......
It's the argument of Dinosaurs, there so great so they'll always be so great, just because of there innate greatness....
If your 20-something, looking to launch you great tech solution, asking where do I locate, do ya choose where tax's are sky high, or next to free? And saying one "NEEDS" to be in CA to attract talent.... how that apply in todays world where your staffing pool is world wide via our connected-verse? What start-up performs better, that recruiting from a 25mile radius of some building, or that restricted to planet Earth via remote functions?
Or your a great programmer, tech engineer, do you want to wake up to inhale the smog, traverse a gauntlet of hobos and feces to buy the morning coffee? Or wake up to the Smokies, the Montana Big Sky, Appalachians, Gulf Cost, Indian Ocean etc etc and live in leisurely peace while logging in to the office?
The meteor already hit, just taking time for some to realize there own extinction.
I wouldn't be surprised to see headline in 10yrs naming Tennessee the new "Tech Capital". It's a NY/CA exodus, only item left is awareness and acknowledgement of such fact. So CA has a coastline, maybe of CA's got out of CA a bit more they'd realize a whole lot of other places also have a coastline too.
hahaha i live next to google office but i never bragging to promote this market as i can say this and that fabulous tech market haha lol
if boise going to have lot more tech company i may run away from them because that would be the first indication that there would be affordability issue.
i am also okay if my market is being critized a lot hahaha, it's not my market literally WTH LOL
but seriously this CA market is on pivot right now, we're on edge, most tech company can't sustain living and paying CA salary that's why under the surface we started offshoring all the jobs to india, austin or ohio LOL LOL LOL
under the surface there're huge crack in CA and USA economy mannnn
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