As you consider another investment property in the market you know best (or in a new market) home-price growth is critical to making your ROI pencil. The last thing you want is to buy a property to fix and flip or buy and hold, only to discover that home-price growth is slowing, reducing your potential profit simply because you thought (or hoped) the future would be a reflection of the past.
What if you could pinpoint not just last year’s growth in home prices, but predict the next 12 months, too?
We recently investigated the factors most likely to impact home prices in 2018, zeroing in on the effect on each of the 382 metropolitan statistical areas (MSAs) in the country. We looked at affordability, home sales, home price growth, mortgage rates, taxes, and less predictable geopolitical events, to determine which markets will see accelerated home-price growth and which markets will slow down.
What we found is that many of the historically “hot” parts of the country are softening significantly — and the “less exciting” low-growth markets are seeing acceleration — all as buyers continue to look for affordability in 2018.
Across the board, the gains markets make in 2018 will be less dramatic than in 2017. Investors will want to pay close attention to MSAs that are part of the biggest gainers group and MSAs in the biggest losers group — in order to be aware of tailwinds or headwinds, respectively — in their favorite markets.
Do you have any predictions backed by statistics you’d like to share?
Let us know in the comments below!