Hot market or soft market: where are you buying right now?

Question

Rochester, NY is down to about one month of inventory right now. Homes are going under contract in about three weeks, and it's one of the hottest markets in the country.

Meanwhile, many other markets are sitting on months of inventory, and sellers are cutting prices just to get a showing.

So which one do you go after?

I’ll go first. I prefer colder markets, as long as they hit the metrics I care about. Less competition means I have more options on the table and room for a backup plan if a deal falls apart. My starting filter is pretty simple: about an hour outside a major metro, with at least one nearby city of 25,000+ people so I can actually find contractors, cleaners, and maintenance help.

What about you? Are you chasing the hot markets or hunting in the cold ones, and what’s on your checklist?

I’ll feature some of the best answers in Thursday’s Investor Brief newsletter from BiggerPockets.

Hossein Sharifi · Answer

Same bias as you: soft markets with jobs and rents that clear today's debt service. Hot inventory is fine if you're buying below replacement and can still hit DSCR after real taxes and insurance; soft is only "cheap" if demand isn't leaving. My filter: employment diversity, a rent-to-price ratio that clears 1.2x+ DSCR at current rates, an insurance trend that isn't exploding year over year, and enough local vendors that a water heater isn't a weekend crisis. I'd rather lose a Rochester bidding war than win in a soft market where the vacancy assumptions are fiction.

James Jones · Answer

Neither — I'm buying steady. Memphis isn't hot or soft right now, it's flat and honest, which is exactly what I want. I don't chase momentum.

I buy single-family under $100K in ZIPs like 38109, 38114, 38116, and 38118 where the 1% rule still works and my 3BR+ Section 8 rents run $1,395–$1,950. Buy at the right number, line-item a $40K rehab budget before I close — roof $6.5K, HVAC $5K, LVP $5.5K — refi on DSCR at 70–80% LTV, repeat.

The cycle matters way less than deal flow. My bottleneck is finding enough deals at the right numbers, not timing the market. If a walkthrough can't be rehabbed for the number my offer assumed, I renegotiate or walk.

Cold markets get you cheap. Hot markets get you competition. I buy where the ratio works and the work is boring.

Matthew Morrow · Answer

@Garrett Brown For me it's less about hot versus soft and more about whether the deal works on today's rent and rate. Rochester is a good example. Inventory is tight, so buyers who win there usually have their numbers and financing ready before a listing hits. Our team has investor-focused agents up there, and I'm happy to connect you if you want local specifics. What size city are you targeting?

Denise Supplee · Answer

hi @Garrett Brown, I like having room to negotiate, but I’d want to know why a market is cold. A wave of new supply is a different story from jobs and residents leaving. My checklist starts with employment, rental demand, and cash flow using realistic vacancy and expense assumptions. We’re actually having an educational session on this Tuesday, how to look past market headlines and evaluate what matters for investors.

Hot market or soft market: where are you buying right now?

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