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It may be impossible to accurately predict market cycles—but it is possible to get a good snapshot of what investors are seeing throughout the country (and beyond) to help inform investment decisions. Here’s what investors had to say about their local markets.
Luke Glofcheskie, investment advisor at Echelon Wealth Partners:
“The real estate market I am discussing is the Greater Toronto Area (GTA) in Canada.
Demographics and interest rates are currently driving the prices in this market higher and higher. Demographics tell us that many Baby Boomers still own homes, while the Millennial generation is trying to enter the market. There is a limited supply for homes and huge demand. Low interest rates make it attractive for those looking to purchase to borrow funds. It doesn’t always make financial sense to own property. Consider interest costs, property taxes, maintenance costs. These rent costs (money that you will never get back) could end up costing more than renting an apartment. Reviewing your financial plan and investment with an advisor will help you make smart decisions.”
Sep Niakan, real estate broker and founder of CondoBlackBook.com:
“The luxury market is high-risk for quick returns, especially the luxury condo market. Luxury condos have 3 to 5 times the months of inventory that would be considered normal. There are always pockets of the luxury market that still have opportunity for higher short-term returns, but it takes someone with a very strong pulse of the market and low aversion to risk to take advantage of it.
Condos in general are suffering a similar fate in terms of high inventory, which will create some price pressure in the short-term; however, most are very bullish about the long-term prospects of the greater downtown Miami and the Miami Beaches, given the great weather and incredible development creating a great quality of life.
Single family homes under $400K and especially under $300K are a hot market and will be for a long time, as long as interest rates don’t go up too much. This is a strong play for both short- and long-term investors.
Multifamily is very hot here in Miami, although cash flow returns have been squeezed due to the attractiveness of the Miami market as a whole from both domestic and international buyers. Many are betting on long-term equity growth, which is why they are okay with the lower cash flow returns in the short-term.”
Richart Ruddie, ProfileDefenders.com:
“It pulled back over the last year with prices moving down just under 10%, but now they are heating back up. South Florida is a unique market that is exclusive of the rest of the country due to its influx of international buyers and retirees.”
Kyle Alfriend runs The Alfriend Real Estate Group and currently owns 48 single family rentals in central Ohio:
- “On Rentals: The market is the best I have seen in 20 years. I have increased rents 10% per year, for the past three years (in normal years, my increases average 3%). The number of renters in the market allows me to be very selective, raising the bar on the quality of tenants. I also have very few problems with existing tenants, presumably due to the shortage of properties and their ability to move elsewhere.
- On Selling: The market is also good for sellers. Inventory is very low, driving prices higher. I tend to hold my properties long-term, but the few I am selling are drawing great prices.
- On Buying: That is harder. Good buys are few and far between. I intend on purchasing five more properties before summer, but have not been able to find the right values. Even distressed bank sales are selling at top of market. I buy them when I can find them, but the price must be right. I personally believe in real estate, you actually make the money when you buy it—you learn that number when you sell it.
- On The Future: I believe, locally, this trend will continue. Demand far exceeds supply on both buying and renting. Prices and rents will continue to rise until this dynamic changes, and the growth of the job market and population show no signs of a foreseeable change.
- On My Business: The above information is accurate for the entire central Ohio market, which is very strong. However, my personal investments and primary experience is in single family homes, in good schools, good neighborhoods, 4 bedroom, 2 1/2 bath, approximately 2,000 square feet. Rents $1800-$2500.”
Michael Kelczewski, Realtor with Brandywine Fine Properties Sotheby’s International Realty:
“My local market is somewhat anomalous. That said, my home state of Delaware is experiencing sales volume on parity with the peak of 2008. Factors including low property taxes/cost of living are driving downsizes/interstate migration. Buy/hold and flips are becoming popular strategies.”
Evan Harris, Co-Founder of SD Equity Partners:
“We are seeing a lot of construction, remodeling, and new sales in the beach neighborhoods of San Diego. These properties are in high demand due to the influx of users on vacation rental websites such as AirBnb and HomeAway (click here to list your place for free on HomeAway—only pay when you get a booking). Trulia also estimates a 10% price increase in some neighborhoods year over year.
There is some push-back against the home-sharing trend in some areas, but unless concrete legal measures are passed, it will not directly impact property value or sales.
Medium home prices in San Diego County rose an estimated 6-8% year over year in Q3 of 2016. Multi-housing construction is also growing as more and more Millennials begin to look for housing in the region.”
Stephen Lane, licensed broker in Washington state and founder of smart real estate brokerage FlyHomes, a startup that offers rewards such as airline miles or Lyft credits to home buyers:
“The Seattle real estate market continues to be incredibly competitive with inventory remaining at record lows and demand from active hiring in the tech industry remaining strong. Neighborhoods such as Ravenna, Bothell, and Capitol Hill remain incredibly hot. In those areas, we’ve seen as many as 30 offers on properties, with buyers waiving financing, inspection, and appraisal contingencies regularly. There are a few pockets of lighter demand, such as condos in Belltown, but generally, the market continues to remain increasingly competitive.
The Trump administration has resulted in a number of buyers taking a wait and see approach due to the uncertainty related to their immigration status, specifically recent immigrants at the major tech firms in the area, but we do expect that hesitation to dissipate as we head into the spring and summer buying season. Additionally, China’s latest crackdown in real estate investments in the U.S. has made some potential Chinese investors slow down their investment plan. That said, barring any major macro-economic changes, we expect the inventory in Seattle to remain limited and do not see any strong headwinds that would slow the Seattle market in the next few years. Moreover, we believe the autonomous car transition opens up new investment opportunities in the greater Seattle area.”
Investors: What are you seeing in YOUR local area?
Share your experiences with a comment!