Category Archives: National Housing Market

Rental Slowdown

Rental Slowdown Continues – A Trend Entering Its 5th Consecutive Month!

Renters, grappling with the burden of surging rental rates and an escalating cost of living, have been eagerly anticipating a rental slowdown in the market. The year 2023 was anticipated to be the turning point, offering relief after two years of unprecedented growth. The decline started around September 2022, fueled by lower demand, and continued until rents hit their lowest point in February 2023.

However, the tide seems to have shifted as rents started pacing up in the upward trajectory up until August 2023, with a slight dip. August 2023 marked the point of reversal of the growing upward trend yet again and has been on the decline since, continuing for the fifth consecutive month in December. The recent decline has left many weighing the future direction of the rental market in the US. Factors such as new multifamily apartment deliveries, vacancies, and the overall economy is influencing rental prices in the US. While this development is positive news for renters, it poses challenges for investors and landlords.

Rental Slowdown Continues

Key Takeaways
  • National Rental Market Overview: The rental slowdown, spanning five consecutive months, marks a significant shift from the previous upward trend. Amidst soaring home prices and seasonal patterns, the decline in rents is notable, with the median asking rent in the US dropping by 0.8% in December 2023. This downturn, attributed to a “building boom” and typical off-season trends, reflects a bottoming out of YOY rent growth at -1%, suggesting increased affordability.
  • Regional Disparities: Regional observations highlight varying impacts, with the Southern and Western regions experiencing notable rent reductions. Cities like Oakland, Huntsville, and Atlanta witnessed steep declines, while high-cost coastal metros like San Francisco and Portland faced a slowdown in rental demand. In contrast, the Northeast and Midwest, having built less compared to the West and South, see more resilient rents, exemplified by cities like Lexington, Norfolk, and Fresno experiencing growth.
  • Impact of Mortgage Rates: The ongoing rental slowdown is influenced by a persistent decrease in mortgage rates, offering potential advantages for renters looking to transition into homeownership. The anticipated surplus of unoccupied units in the upcoming year suggests a potential deceleration in rental demand, posing challenges for landlords contending with increased vacancies.
  • 2024 Outlook and Market Challenges: The rental market’s future trajectory in 2024 remains uncertain, with the introduction of over 670,000 new units, but construction starts slowing down. Challenges related to interest rates and expenses, including notable increases in labor, maintenance, and insurance costs, add complexity. While experts anticipate relief from some market pressures, the impact on short-term loans issued between 2020-2022, coupled with remaining high loan coupons, may lead to distress for multifamily property owners.

Exploring the Rental Slowdown Amidst Soaring Home Prices And Seasonal Patterns

While prices of homes in the US continue to climb, rents are experiencing a decline after a sustained upward trend for the past consecutive five months. In December, the median asking rent in the US dropped by 0.8%, settling at $1,379, as per recent reports. This shift may be attributed to an increased supply resulting from a considerable “building boom” that aligns with the prevailing demand. The recent decreases also align with the typical seasonal pattern in the rental market, as fewer renters tend to move during the winter and autumn months, with December positioned squarely in the off-season.

Examining the YOY rent growth reveals a bottoming out at -1%, indicating that, on average, apartments across the country are marginally more affordable today than they were one year ago. This trend could be attributed to the significant number of completed multi-family apartments in the US, nearing levels not seen in over three decades.

Exploring Rental Slowdown

This YOY decline in apartment rents stands starkly apart from the conditions of FY 2021 and FY 2022 when rent prices were sharply rising, reaching a peak YOY growth of 18% nationally. Despite the current cooldown, the national median rent still holds nearly $250 per month higher than it was just three years ago.

The onset of the off-season arrived a month earlier than typical, marked by a small 0.1% decrease in rent during August. Subsequently, the monthly downturns have shown a gradual decline – a 0.6% decline in September, followed by a further dip of 0.8% in October, and now culminating in a 0.9% reduction in November.

The Ongoing Rental Slowdown and Regional Observations in 2024

The persistent decrease in mortgage rates is a significant factor contributing to the ongoing decline. Dropping mortgage rates can prove advantageous for renters, as individuals who have been on the sidelines of the housing market might now find the opportunity to transition into homeownership. If the downward trend in mortgage rates continues swiftly throughout 2024, the deceleration in rental demand could emerge as a primary catalyst for rent reductions.

This is because a growing number of Americans may opt to leave the rental market, making landlords contend with an increased number of vacant properties. It is anticipated that the surplus of unoccupied units will persist in the upcoming year.

The most notable slowdowns in rent growth were observed in the Southern and Western regions. Rent reductions were witnessed in 60% of the nation’s largest hundred cities on an annual basis. According to the latest reports, the steepest declines occurred in Oakland, dropping by 9.3% YOY, Huntsville by 5.7%, and Atlanta by 5.6%.

Rent decreases were particularly evident in the Sun Belt, with cities like Jacksonville, Austin, Orlando, and Phoenix experiencing over 20% YOY rent growth in 2021, now facing the swiftest declines. The metro areas of San Francisco and Portland are also witnessing some of the nation’s slowest YOY growth, underscoring that high-cost coastal metros are encountering a slowdown in rental demand. These markets were among those that experienced rapid declines in 2020, and while the deceleration is less pronounced today, it is still noticeable.

Rent Trends In The Northeast And Midwest Amidst Growing Demand

On the flip side, rents are changing direction in quite a few cities across the Northeast and Midwest. The reason rents are holding up better in these areas is that they haven’t built as much as the West and South. This means some landlords in the Northeast and Midwest aren’t as eager to lower prices since they’re not dealing with as many vacant properties.

In Lexington, rent is growing the fastest, with a yearly rate of 6.4%. Following closely are Norfolk at 6.3% and Fresno at 5.5%. Interestingly, big cities like Boston, Chicago, and New York City are also experiencing an increase in rents.

What Could You Expect With The Rental Market Going Forward In 2024?

While the market is poised to introduce over 670,000 new units in 2024, construction starts are slowing down due to challenges related to interest rates and expenses. The anticipation is to start to remain weak, with the impact possibly not being evident on deliveries until 2026.

Expenses experienced a notable increase in 2022 and 2023, primarily attributed to labor, maintenance, and insurance costs. Some of these expenses may decrease as inflation subsides, but insurance premiums could persistently rise due to an uptick in severe weather events.

Rental Slowdown - The Best 2024 Market Observations

Interest rates saw a decline of 100 BP in December, and the market currently foresees no further rate hikes, with some expecting cuts through 2024. While any additional cuts would lessen the refinancing gap for all the multifamily owners, loan coupons remain significantly higher than they were in Q1 of 2022 when the Federal Reserve initiated all the rate increases. Many experts believe that this downward trend may relieve some pressures on the market, although not all. Short-term loans on the value-added properties issued between 2020-2022, with low rates, are likely to encounter the most distress.

Final Thoughts

The ongoing rental slowdown, now in its fifth consecutive month, marks a notable shift in the housing market. The trajectory, initially reversing in February 2023, continues to exhibit a decline after August 2023, impacting both renters and property investors, both in positive and negative ways. The decrease in rental rates, particularly in the Southern and Western regions, is influenced by factors such as a surplus of unoccupied units, dropping mortgage rates, and regional variations in building activities.

Noteworthy is the distinction between the Sun Belt cities that experienced rapid rent growth in 2021, now facing significant declines because of the record high multi-family apartments, and the Northeast and Midwest, where rents are holding up due to limited construction.

The market’s future trajectory in 2024 remains uncertain, with over 670,000 new units expected but at the same time, construction is expected to slow down. Experts anticipate relief from some market pressures, but challenges persist, particularly for short-term loans on value-added properties. Stakeholders must remain vigilant to the impact of interest rates, expenses, and regional dynamics, as the market adapts to the changing economic factors in the coming years.

 

Emerging Real Estate Markets to Watch in 2023

After two years of constant growth in property prices, the residential housing market in the United States experienced a significant slowdown during the first half of 2022, which continued into the early months of 2023.

With property prices climbing up the chart by 40% during these two years, many investors and buyers are now facing difficulties to afford new properties. With little space for doubt in mind related to future growth prospects and rising inflation across sectors, combined with declines in the stock market, have made it more challenging for people to save enough money for investing in emerging real estate markets.

Median Sales Price of Houses Sold for the United States

Higher interest rates is another factor that has increased borrowing costs, making it harder for buyers and first-time purchasers who have limited down payment funds.

As a result of these factors combined, there has been a decrease in market activity. One area that has been significantly affected by these developments is home sale prices. The surge in housing prices was particularly prominent during COVID-19 when low-interest rates, increased household savings, and strong investment returns coincided with people spending time at home. The year-over-year growth rate reached a peak of 26.1% in May 2021. Remained at double-digit percentage growth until mid-2022. However, by the end of 2022, home prices had only risen modestly by 1.3% compared to the year prior.

Real Residential Property Prices for United States

However, some parts of the country have defied the norm and shown decent levels of real estate activity in the beginning of 2023. While prices have remained stable in specific areas states, some regions have experienced a trend of homes being sold at prices higher than their initial listing. Some markets have shown resilience despite the overall decline in housing demand.

USA house price index

Data: Statista

To identify the hottest real estate markets for 2023, we will discuss some key indicators and the overall market outlook. Here are some key indicators that can help you give a perspective on the market:

  1. One-year change in median sale price (with higher values ranking higher)
  2. The proportion of homes sold above the asking price (with higher values ranking higher)
  3. Number of days a property remains on the market (with lower values ranking higher)
  4. Sale-to-list percentage (with higher values ranking higher)
  5. Percentage of listings with price reductions (with lower values ranking higher)

In the next section, you will find the top six emerging markets with the most dynamic real estate and potential for growth.

50 Emerging Real Estate Markets to Lookout for in 2023

Let us understand the specifics of each of the 50 top emerging real estate markets in the US to look out for in 2023. First, let us understand the top 10.

Top 10 Emerging Real Estate Markets

#1 Charlotte (North Carolina)

 

House Price Index for Charlotte-Concord-Gastonia, NC-SC

MSP $390,537
One-Year % Change in Median Sale Price +6.8%
Homes Sold Above Asking 48.9%
Average Days on the Market 31.2
Sale-to-List Percentage 101.4%
Percentage of Listings with Price Reductions 24.0%

 

CharlotteSituated in the heart of North Carolina, Charlotte is a city known for its economy, vibrant culture, and abundance of outdoor activities. With a growing population and thriving job market, Charlotte’s real estate sector is expected to experience growth in the coming years. The projected market outlook for the year indicates an 8.2% increase, presenting an excellent opportunity for investors.

One compelling reason to consider investing in Charlotte’s real estate market is the city’s job market. With a range of industries and major companies like Bank of America and Duke Energy headquartered here, Charlotte maintains an unemployment rate and continues to attract more people. These factors contribute to the demand for properties within the city.

#2 Austin (Texas)

House Price Index for Austin-Round Rock-Georgetown, TX

MSP $604,344
One-Year % Change in Median Sale Price -3.9%
Homes Sold Above Asking 47.1%
Average Days on the Market 37.2
Sale-to-List Percentage 97.1%
Percentage of Listings with Price Reductions 42.5%

Austin Texas

The market has seen some disruptions due to all the commotion. Despite the nationwide inflation and rising interest rates, Austin will remain a popular place for sellers. The Austin Metropolitan Statistical Area (MSA) prices are still climbing because of an influx of new residents and a rapidly recovering local economy.

 

#3 Aurora (Colorado)

House Price Index for Denver-Aurora-Lakewood, CO

 

MSP $476,319
One-Year % Change in Median Sale Price -1.3%
Homes Sold Above Asking 54.5%
Average Days on the Market 10.7
Sale-to-List Percentage 102.4%
Percentage of Listings with Price Reductions 44.3%

Aurora city

The city encompasses industries including transportation, commercial centers, healthcare facilities, and government services. Job opportunities in Aurora are projected to grow by 42% over the next decade. These factors make it an appealing prospect for buyers. Investors can confidently regard Aurora as a long-term investment opportunity.

 

Aurora has exceptional public schools, low crime rates, family-friendly neighborhoods, and progressive values.

#4 Raleigh (North Carolina)

House Price Index for Raleigh-Cary, NC

 

MSP $410,064
One-Year % Change in Median Sale Price -1.3%
Homes Sold Above Asking 55.6%
Average Days on the Market 30.8
Sale-to-List Percentage 103.1%
Percentage of Listings with Price Reductions 23.9%

Raleigh, North Carolina

With a large community of students in Raleigh, it offers a good growth opportunity for real estate investors looking to invest in something and earn passive income. In addition to being the location of three known universities, job opportunities are on the horizon.

The presence of institutions and the promising job market have led to a community of renters with steady incomes. Raleigh is currently experiencing an increase in both housing prices and rental rates, which reflects its status as one of the best housing markets in the country.

 

#5 El Paso (Texas)

House Price Index for El Paso, TX

 

MSP $231,843
One-Year % Change in Median Sale Price +9.3%
Homes Sold Above Asking 48.3%
Average Days on the Market 19.9
Sale-to-List Percentage 101.0%
Percentage of Listings with Price Reductions 16.6%

el paso texas property

The real estate market in El Paso is receiving support from the economy, particularly regarding job opportunities. While the local unemployment rate is comparable­ to the national average, there has been a notable­ increase of 2.3 percent in job growth over the past year, surpassing the national average by nearly half a percentage point. These statistics suggest that El Paso’s job market is outperforming other regions.

El Paso’s real estate market may not be on par with other cities in Texas, but it has shown progress since the rece­ssion. The job sector is also strengthe­ning, which is expected to benefit those who are currently investing in real estate­ in El Paso.

 

#6 Oakland (California)

House Price Index for Oakland-Berkeley-Livermore, CA

 

MSP $906,959
One-Year % Change in Median Sale Price -0.9%
Homes Sold Above Asking 72.1%
Average Days on the Market 18.9
Sale-to-List Percentage 113.1%
Percentage of Listings with Price Reductions 22.6%

Oakland, California

Oakland seems to be a sought-after market for sellers at the moment. Many investors and individuals are searching for homes; surprisingly, there is a bit of a shortage from the seller’s side. This situation could be a chance for investors who know how to navigate the market.

Over the ten years, Oakland has experienced growth in its real estate sector. Currently, local home values are reaching all-time highs, causing many people to question whether it’s the time to take action.

 

#7 Dallas (Texas)

House Price Index for Dallas-Plano-Irving, TX

MSP $417,510
One-Year % Change in Median Sale Price -11.5%
Homes Sold Above Asking 46.7%
Average Days on the Market 21.8
Sale-to-List Percentage 101.4%
Percentage of Listings with Price Reductions 26.0%

Many investors have been questioning the viability of purchasing property in Dallas. To gain insight into the 2023 real estate market for both investors and regular buyers, it is essential to research trends. The housing market in Dallas presents a great opportunity if you are interested in expanding your real estate portfolio with deals with great potential.

Dallas (Texas)

Regarding real estate, the importance of location cannot be overstated, and Dallas excels in this aspect. In fact, Dallas leads the nation with 11,636 approved projects that include both single-family and joint-family units. This statistic highlights the potential of Dallas within the real estate industry.

#8 Jacksonville (Florida)

Jacksonville (Florida) house price index

MSP $299,529
One-Year % Change in Median Sale Price -1.1%
Homes Sold Above Asking 34.4%
Average Days on the Market 28.0
Sale-to-List Percentage 99.2%
Percentage of Listings with Price Reductions 29.0%

Jacksonville (Florida)

As of July 31, 2023, the Jacksonville housing market is showing a great projection for the future. When inve­sting, it’s essential to balance both the value and the strategy. If your goal is solely to generate high monthly rental income, buying real estate in Jacksonville­ may not be the most suitable choice. However, if you’re a savvy inve­stor with a long-term vision, Jacksonville could be an excellent opportunity.

#9 Tampa (Florida)

Tampa (Florida) house price index

MSP $390,967
One-Year % Change in Median Sale Price +10.6%
Homes Sold Above Asking 40.4%
Average Days on the Market 14.5
Sale-to-List Percentage 99.9%
Percentage of Listings with Price Reductions 31.1%

Tampa (Florida)

Tampa, situated in Hillsborough County, is a city known for its walkability. It has a population of 335,749 residents. When we consider the area of Greater Tampa Bay, which includes both Tampa and Sarasota metro regions, the population expands to over 4 million. This region not only serves as an urban center but also holds significant appeal as a popular tourist destination.

Recently, Tampa has been gaining attention for its thriving housing market, attracting investors. The rental market in the Tampa Bay area displays strength, making it an excellent choice for those purchasing rental properties in Florida.

#10 Madison (Wisconsin)

Madison (Wisconsin) real estate market graph

MSP $365,389
One-Year % Change in Median Sale Price +6.4%
Homes Sold Above Asking 57.4%
Average Days on the Market 39.6
Sale-to-List Percentage 103.4%
Percentage of Listings with Price Reductions 12.4%

Madison (Wisconsin)

Currently, Madison, Wisconsin, is experiencing a seller’s market, indicating a demand for properties in the area. This increased demand can be attributed to Madison’s location, thriving economy, and exceptional quality of life.

Madison stands out as it is home to the University of Wisconsin Madison, creating a need for rental properties. Additionally, the city boasts a job market supported by known employers, like American Family Insurance and the University of Wisconsin Madison.

Other 40 Emerging Real Estate Markets To Watch For

#11 Salt Lake City (Utah)

 

MSP $553,421
One-Year % Change in Median Sale Price +1.6%
Homes Sold Above Asking 46.6%
Average Days on the Market 19.4
Sale-to-List Percentage 101.3%
Percentage of Listings with Price Reductions 36.4%

 

Salt Lake City in Utah often goes unnoticed by real estate investors. Often overlooked by investors, it is nearly half of the job opportunities in Utah, and 40% of its population can be found within Salt Lake.

Salt Lake City has emerged as a “number one” choice for long-term investments in properties across the US. Not only this, recent data shows that this understated city, since the last decade or so, has shown an appreciation rate of 161.55%, resulting in an average annual home appreciation rate of 10.09%. This accomplishment puts Salt Lake City among the 10% of cities nationwide regarding real estate value growth.

#12 Nashville-Davidson (Tennessee)

 

MSP $453,068
One-Year % Change in Median Sale Price +2.1%
Homes Sold Above Asking 44.4%
Average Days on the Market 29.3
Sale-to-List Percentage 101.1%
Percentage of Listings with Price Reductions 25.7%

Nashville, Tennessee, is famous for its known attractions, such as the Grand Ole Opry, a replica of the Parthenon, and its lively country music. As a tourist destination in the heart of America, Nashville has established itself as a city with its unique charm. Nashville, with a population of over 600,000 residents, is one of the most populous cities in the United States. When we take into account the areas within Davidson County, the Nashville real estate market e­ncompasses around 700,000 people.

Over the past years, the housing market in Nashville­ Davidson has been highly favorable for se­llers with rising property prices. It has garne­red a reputation as one of the­ most desirable housing markets in the United States. This positive trend in real estate started a decade ago, and expe­rts anticipate that it will continue well into 2023 and beyond.

#13 Orlando (Florida)

 

MSP $353,400
One-Year % Change in Median Sale Price +2.9%
Homes Sold Above Asking 37.6%
Average Days on the Market 15.1
Sale-to-List Percentage 99.6%
Percentage of Listings with Price Reductions 26.8%

 

The real estate market in Orlando has a lot of potential for growth because of its expansion and the increasing number of people moving to the city. Since 2018, Orlando has maintained stability mostly due to its tourism industry. However, it’s not only tourism that plays a role in the city’s economy. Nashville­ has also emerged as a ce­nter for high-tech industries.

With the incre­ase in job opportunities, Orlando has become a popular choice for people from various parts of the­ country and even abroad to settle­ down. This growing trend has resulted in a higher demand for both residential and comme­rcial properties. For investors seeking profitable rental income, Orlando is worth considering as over 46% of households in the city are occupied by rente­rs.

#14 Boise (Idaho)

 

MSP $514,184
One-Year % Change in Median Sale Price -1.6%
Homes Sold Above Asking 26.2%
Average Days on the Market 20.0
Sale-to-List Percentage 99.3%
Percentage of Listings with Price Reductions 48.8%

 

Lately, the housing market in all over the US has seen a dip, and Idaho was not spared. But that’s not why it is on this list. Idaho is still attracting interest because it’s affordable and offers a quality of life. If there’s no supply, sellers might have chances to raise prices and wait for the buyer patiently.

#15 Charleston (South Carolina)

 

MSP $493,750
One-Year % Change in Median Sale Price +10.2%
Homes Sold Above Asking 35.2%
Average Days on the Market 43.8
Sale-to-List Percentage 100.1%
Percentage of Listings with Price Reductions 17.8%

Charleston’s real estate market often goes unnoticed compared to the other markets, like in Texas and Florida. However there are reasons why property investors find Charleston an attractive destination. This coastal city has consistently shown growth, making it an appealing option for those interested in real estate investment.

Charleston is known for being favorable to landlords. The city’s economic prospects indicate that housing demand and rental rates will continue to rise, making it a more encouraging buy for real estate investors.

#16 Knoxville (Tennessee)

 

MSP $293,612
One-Year % Change in Median Sale Price +7.3%
Homes Sold Above Asking 46.6%
Average Days on the Market 40.5
Sale-to-List Percentage 101.1%
Percentage of Listings with Price Reductions 22.9%

With mortgage rates at their highest levels in ten years and concerns about inflation, the housing frenzy caused by the pandemic is naturally calming down. However, the real estate market in Knoxville is handling it really well, and even the MSP has changed substantially in favor of Knoxville, where other investors are facing substantial losses.

Investing in the Knoxville real estate market might be a good choice for those looking for the right entry points and potential solid growth of their portfolio.

#17 Des Moines (Iowa)

 

MSP $189,597
One-Year % Change in Median Sale Price +2.9%
Homes Sold Above Asking 36.8%
Average Days on the Market 12.7
Sale-to-List Percentage 99.4%
Percentage of Listings with Price Reductions 38.5%

Des Moines has a foundation for growth. Des Moine­s boasts an impressively low unemployme­nt rate of just 3.9 percent, we­ll below the national average­ of around 5.6 percent. However, the city could work towards increasing its job growth rate, which currently stands at 1.1 percent, nearly half the national average of 1.9 percent. If Des Moines can continue to produce positive economic indicators like this in the future, inve­stors may see substantial returns, particularly in the­ thriving housing market. 

#18 Miami (Florida)

 

MSP $533,410
One-Year % Change in Median Sale Price +9.6%
Homes Sold Above Asking 22.2%
Average Days on the Market 55.1
Sale-to-List Percentage 97.5%
Percentage of Listings with Price Reductions 12.4%

In the ten years, real estate market in Miami has experienced growth with an overall appreciation of 188.09%. This impressive figure translates to an annual appreciation rate of 11.16%, placing Miami in the top 10% nationwide.

However, whether purchasing a house in Miami is advisable depends on circumstances and objectives. Considering the potential for increases in home value so far, it may present a favorable opportunity for buyers with long-term investment goals or those capable of making quick decisions in this fast-paced market.

#19 Omaha (Nebraska)

 

MSP $254,817
One-Year % Change in Median Sale Price +8.9%
Homes Sold Above Asking 51.8%
Average Days on the Market 7.8
Sale-to-List Percentage 102.1%
Percentage of Listings with Price Reductions 29.5%

The real estate market in Omaha is poised for long-term growth largely due to its demographics. The average age of residents is 35, which is younger than the state average. The presence of colleges in the housing market further influences the young population in Omaha. Moreover, many college graduates choose to stay in this job market. This contributes to increased demand for property value in Omaha, which is remarkable considering it’s a region known for its declining small towns.

The market’s resilience can be attributed to factors such as a supply of affordable starter homes and a strong economy that attracts individuals from across the region seeking employment opportunities here.

#20 Tallahassee (Florida)

 

MSP $231,369
One-Year % Change in Median Sale Price +15.9%
Homes Sold Above Asking 38.7%
Average Days on the Market 42.7
Sale-to-List Percentage 99.8%
Percentage of Listings with Price Reductions 12.4%

Since August 2023, there has been a rise, in home prices in Tallahassee. In fact, they have increased by 15.9% compared to the last year. This price surge can be attributed to a combination of factors that have come together to shape the housing market in the city.

One major factor contributing to this price increase is the availability of constructed homes. Previous years have faced a decrease in housing projects that created a shortage – which in turn led to this growth.

#21 Denver (Colorado)

 

MSP $589,325
One-Year % Change in Median Sale Price -3.6%
Homes Sold Above Asking 49.8%
Average Days on the Market 10.4
Sale-to-List Percentage 102.5%
Percentage of Listings with Price Reductions 38.5%

Denver has consistently proven itself to be one of the best long-term real estate investments in the United States. The city’s strong economy is a factor in its reputation as it allows buyers to allocate financial resources towards housing, which drives up real estate prices.

Looking ahead to the year 2023, the market forecast predicts a growth rate of 3.5%. This forecast suggests an outlook for the Denver housing market, indicating a potential recovery from the recent decline in real estate values. It’s news for both homeowners and prospective buyers. A noteworthy indicator of market stability is the number of days it takes for a property to sell, which is 10.4 days as of the recent data of 2023. This short period emphasizes that properties are quickly transitioning due to the demand for homes in the Denver area. This strong demand solidifies Denver’s position as an attractive long-term investment opportunity.

#22 San Jose (California)

 

MSP $1,330,942
One-Year % Change in Median Sale Price -8.9%
Homes Sold Above Asking 65.9%
Average Days on the Market 16.6
Sale-to-List Percentage 106.9%
Percentage of Listings with Price Reductions 26.1%

San Jose’s real estate market has been a top choice for long-term inve­stments across the country for the past de­cade. The housing landscape in San Jose­ consists of a mix of owner-occupied and rental properties.

Despite some decreases in home­ prices, the market remains highly competitive. In fact, an impressive­ 65.9% of properties sell above their listed prices, with a proje­cted growth rate of 1.7%. It is worth noting that the de­cline in prices may be a necessary adjustment within the marke­t rather than an indication of a slowing market overall.

#23 Columbus (Ohio)

 

MSP $259,695
One-Year % Change in Median Sale Price +6.4%
Homes Sold Above Asking 52.6%
Average Days on the Market 36.2
Sale-to-List Percentage 102.3%
Percentage of Listings with Price Reductions 20.9%

Investing in Columbus presents a range of opportunities, from single-family residences to apartment complexes with multiple units. The city has an economy, an unemployment rate, and a steadily growing population, making it an attractive market for rental properties.

However, it’s important to choose the right location. For example, Italian Village has a home value of $397,113, whereas in Milo Grogan, it’s $114,460. Therefore it is highly recommended to conduct research on neighborhoods and seek guidance from local real estate experts who have extensive knowledge of the market.

#24 San Diego (California)

 

MSP $869,443
One-Year % Change in Median Sale Price -1.1%
Homes Sold Above Asking 52.4%
Average Days on the Market 15.9
Sale-to-List Percentage 102.2%
Percentage of Listings with Price Reductions 12.4%

The real estate market in San Diego is known for being one of the most expensive in the country, although there are cities on the West Coast that surpass it in terms of cost. This pricing situation has led to increased demand for rental properties in San Diego, specifically for those who face financial challenges when it comes to owning a home.

With the expected population growth of 500,000 people by 2050, which is steadily increasing by tens of thousands each year by the way, the rental market is set to experience expansion. Currently, the average rent in San Diego is $2,700 per month, and it can be much higher depending on the location and availability.

#25 Reno (Nevada)

 

MSP $543,806
One-Year % Change in Median Sale Price -2.9%
Homes Sold Above Asking 34.1%
Average Days on the Market 38.4
Sale-to-List Percentage 99.5%
Percentage of Listings with Price Reductions 29.8%

Reno is an amazing destination for tourists. Its attractions like the beautiful Lake Tahoe and the exciting Reno Air Races, are one of the exciting places tourists can visit here. For those interested in real estate investment, the thriving tourism industry in Reno offers an income opportunity through short-term rentals and vacation homes.

Additionally, Reno’s strategic placement with close distance to cities like San Francisco, Sacramento and Las Vegas makes it an attractive choice for both businesses and residents. Subsequently, it increases housing demand, making Reno a promising market for real estate investors.

#26 Phoenix (Arizona)

 

MSP $441,268
One-Year % Change in Median Sale Price -1.4%
Homes Sold Above Asking 39.6%
Average Days on the Market 33.4
Sale-to-List Percentage 100.0%
Percentage of Listings with Price Reductions 31.6%

Phoenix has experienced a significant rise in its population, but the housing market has not kept up with the pace creating demand for housing. According to a study, Arizona fell short by 505,134 housing units between 2000 and 2015. This shortage has resulted in a housing crisis in Phoenix. To put it into perspective, over the thirty years or so, around 220,000 new housing units were built in Phoenix while the population surged by a staggering figure of 820,000 people. It’s quite clear that the rate of housing production in Phoenix hasn’t been able to match the increase in population.

The presence of universities within the city also plays a role in shaping housing prices and rental rates. These campuses collectively accommodate over seventy thousand students, which further impacts positively the housing landscape.

#27 Elk Grove (California)

 

MSP $642,447
One-Year % Change in Median Sale Price -12.5%
Homes Sold Above Asking 56.5%
Average Days on the Market 17.0
Sale-to-List Percentage 101.5%
Percentage of Listings with Price Reductions 38.4%

The historic district of Elk Grove is a hub that brings the community together. Elk Grove, as a whole, offers a variety of properties to cater to everyone’s tastes. Whether you’re looking for ranches with plenty of land, luxurious homes with stunning golf course views, or charming family residences tucked away on suburban streets, you’ll find your perfect fit right here.

Although the recent decline indicates a “slippery” slope but the long-term view provides a look at many opportunities here. With 56.5% of homes selling above the asking price with an average of just 17 days in the market.

#28 Seattle (Washington)

 

MSP $844,285
One-Year % Change in Median Sale Price +0.6%
Homes Sold Above Asking 42.7%
Average Days on the Market 11.0
Sale-to-List Percentage 103.5%
Percentage of Listings with Price Reductions 26.9%

Seattle’s housing market is booming – This surge can be primarily attributed to the arrival of paid tech professionals from companies like Amazon, Microsoft, Google, and Facebook. Workforces from these companies are actively seeking homes with dedicated workspaces, which has become a growing trend during the pandemic when remote work became prevalent.

Although there has been an increase in housing inventory, the real estate market in the Puget Sound region remains tight. There is less than a two-month supply of homes, making it a seller’s market where limited properties face demand from buyers. As a result, home prices will likely stay at the top for the foreseeable future.

 

#29 Lincoln (Nebraska)

 

MSP $269,829
One-Year % Change in Median Sale Price +11.1%
Homes Sold Above Asking 51.0%
Average Days on the Market 10.1
Sale-to-List Percentage 101.3%
Percentage of Listings with Price Reductions 17.4%

The housing market in Lincoln, Nebraska is an example of how gradual growth can bring great advantages. Although the increase in home prices may not be extremely impressive the presence of elements suggests that this growth is sustainable.

A combination of factors such as unemployment rates, robust job growth, managed foreclosure levels, and high affordability all contribute to an economy that can handle small fluctuations. With continued expansion, the real estate market in Lincoln has the potential to set an example for other cities across the USA to follow.

#30 Houston (Texas)

 

MSP $319,747
One-Year % Change in Median Sale Price +0.0%
Homes Sold Above Asking 30.1%
Average Days on the Market 21.2
Sale-to-List Percentage 98.9%
Percentage of Listings with Price Reductions 26.4%

The Houston housing marke­t is currently balanced between buyers and selle­rs. While home values did experience a slight de­cline over the past year, future indicators suggest the potential for growth. With a diverse range of pricing strategies and quick pending transaction times, both buye­rs and sellers have advantage­ous opportunities. To make well-informe­d decisions in this market, individuals should assess their objectives, gather valuable­ market insights, and seek guidance­ from industry experts.

#31 Atlanta (Georgia)

 

MSP $410,742
One-Year % Change in Median Sale Price +2.6%
Homes Sold Above Asking 39.3%
Average Days on the Market 24.1
Sale-to-List Percentage 99.9%
Percentage of Listings with Price Reductions 24.6%

Atlanta has consistently ranked as one of the best real estate markets for investors, especially when it comes to investing in rental properties. The city has experienced population growth, with around 285,000 people moving to Georgia in 2019. This increase in migration can be credited to Atlanta’s business environment and its reputation for being more affordable compared to big cities. As a result, there is a growing demand for housing in Atlanta that surpasses the rate of construction.

The shortage of housing remains a challenge in Atlanta. It is expected that this scarcity will continue driving up property prices in the foreseeable future.

#32 Riverside (California)

 

MSP $597,515
One-Year % Change in Median Sale Price -2.6%
Homes Sold Above Asking 57.5%
Average Days on the Market 29.0
Sale-to-List Percentage 101.3%
Percentage of Listings with Price Reductions 24.1%

Riverside is a vibrant city that offers benefits for people looking to buy homes or invest in the real estate market. The city boasts a population with a thriving economy and a wide variety of housing options. The Riverside real estate market has been on a trajectory, with home prices consistently increasing.

Several key factors contribute to this trend in the Riverside real estate market. One of these factors is the economy, supported by major employers like Kaiser Permanente and the University of California. Additionally, Riverside’s strategic location near Los Angeles plays a role in driving its real estate growth. Being just a short distance away from Los Angeles makes Riverside an attractive choice for many commuters.

#33 Port St. Lucie (Florida)

 

MSP $384,165
One-Year % Change in Median Sale Price +16.1%
Homes Sold Above Asking 34.9%
Average Days on the Market 42.5
Sale-to-List Percentage 99.6%
Percentage of Listings with Price Reductions 24.3%

The housing market, in Port St. Lucie has seen a constant trend for the past few years. This can be attributed to the growing demand for homes combined with a supply of properties.

Moreover, the city’s advantageous location on the East Coast near centers such as Miami and West Palm Beach has contributed to the increased demand. As a result, property prices in Port St. Lucie have been steadily rising, making it an attractive option for both homeowners and investors.

#34 Virginia Beach (Virginia)

 

MSP $336,786
One-Year % Change in Median Sale Price +4.6%
Homes Sold Above Asking 54.9%
Average Days on the Market 19.2
Sale-to-List Percentage 101.6%
Percentage of Listings with Price Reductions 19.9%

Virginia Beach is known for being a location for real estate investments due to its strong and competitive housing market. With a range of property choices from beachfront houses to condos, townhouses, and large single-family homes, there is something for everyone. Looking ahead, the future looks promising for Virginia Beach’s real estate scene, with a projected growth rate of 4.4% by next year.

#35 Huntsville (Alabama)

 

MSP $325,483
One-Year % Change in Median Sale Price -0.9%
Homes Sold Above Asking 43.1%
Average Days on the Market 26.6
Sale-to-List Percentage 101.2%
Percentage of Listings with Price Reductions 19.8%

Huntsville real estate market stands out for being surprisingly affordable compared to markets even those facing less favorable economic conditions. The city boasts a thriving economy, a strong job market, and housing that remains easily accessible to residents.

These factors combined make Huntsville’s real estate sector benefit from a blend of circumstances. Additionally, home values in Huntsville have consistently exceeded the average over the ten years.

#36 Bakersfield (California)

 

MSP $385,687
One-Year % Change in Median Sale Price +3.8%
Homes Sold Above Asking 46.4%
Average Days on the Market 19.1
Sale-to-List Percentage 100.5%
Percentage of Listings with Price Reductions 27.2%

Bakersfield, located in California, holds a place within the Inland Empire even though it often gets overshadowed by famous coastal cities like San Francisco and Los Angeles. Around 400,000 people call Bakersfield home within its city limits, which makes it the largest city in California.

The real estate market in Bakersfield has been experiencing growth, placing it among the 10% nationally for property appreciation. Over the decade, property values in Bakersfield have seen an increase of 150.36 percent—equivalent to an average annual appreciation rate of 9.61 percent.

#37 Indianapolis (Indiana)

 

MSP $232,593
One-Year % Change in Median Sale Price +2.3%
Homes Sold Above Asking 40.2%
Average Days on the Market 9.1
Sale-to-List Percentage 100.1%
Percentage of Listings with Price Reductions 37.9%

The real estate market in Indianapolis has been marked by competition and quick sales, often leading to properties being bought at higher prices than their initial listings. The one-year market forecast predicts a growth projection of 7.6%, indicating a demand in the future. This forecast reinforces the notion that the market is not showing any signs of slowing down but rather maintaining its momentum.

#38 Richmond (Virginia)

 

MSP $339,168
One-Year % Change in Median Sale Price +7.7%
Homes Sold Above Asking 58.8%
Average Days on the Market 10.6
Sale-to-List Percentage 104.1%
Percentage of Listings with Price Reductions 28.1%

Richmond, the capital city of Virginia (VA), offers a vibrant blend of culture, history, and economic opportunities. Its diverse economy is flourishing in various se­ctors. Experts predict that the Richmond re­al estate market will continue to experience growth, with prices expecte­d to rise gradually rather than seeing a surge. However, limite­d inventory may lead potential home­buyers to face competition and pote­ntially pay above the asking price for de­sirable properties.

If you’re a landlord or property investor, it might be worth considering the Richmond rental market. Indications show that rental price­s are on the rise, and the market is gaining momentum. However, potential buyers may encounter difficulties due to mortgage re­lated challenges.

#39 Baltimore (Maryland)

 

MSP $216,060
One-Year % Change in Median Sale Price +6.6%
Homes Sold Above Asking 36.6%
Average Days on the Market 30.8
Sale-to-List Percentage 102.2%
Percentage of Listings with Price Reductions 26.7%

Baltimore is well-known for its affordable real estate­ market, particularly in comparison to cities like Los Angeles or New York. Investors have the opportunity to purchase properties at a significantly lower cost compared to these­ metropolitan areas. Additionally, Baltimore’s real estate market has seen consistent growth in the recent years, primarily due to its strong local economy.

The re­ntal market in Baltimore is thriving due to several factors, including a growing population and relatively affordable­ living costs. This creates an appealing opportunity for inve­stors looking to buy properties and rent them out to tenants.

#40 Wichita Falls (Texas)

 

MSP $152,697
One-Year % Change in Median Sale Price +47.2%
Homes Sold Above Asking 21.2%
Average Days on the Market 46.9
Sale-to-List Percentage 96.4%
Percentage of Listings with Price Reductions 29.7%

 

If you’re looking for homes that have the potential for flipping, Wichita Falls is a great choice for investing in properties. However, if you’re thinking of making it your permanent residence, you’ll discover that the cost of living in Wichita Falls is 1% lower compared to the state average and 9% lower than the average.

Moreover, housing expenses in Wichita Falls are 20% below the average across the United States. When you consider all these factors together, it becomes an investment opportunity.

#41 Portland (Oregon)

 

MSP $545,469
One-Year % Change in Median Sale Price -1.8%
Homes Sold Above Asking 50.3%
Average Days on the Market 14.1
Sale-to-List Percentage 102.4%
Percentage of Listings with Price Reductions 36.0%

Portland is a city that attracts homebuye­rs and real estate e­xperts for several reasons. Its stunning landscapes, vibrant culture, and flourishing real e­state market are just some of the factors that make it a desirable­ location. With a strong economy, growing population, and thriving rental market, Portland offers promising opportunities for real estate­ investment. Investors are drawn to the potential for long-term appre­ciation and consistent cash flow in this dynamic city.

Portland offers a strong job marke­t as another appealing aspect for inve­stors. The city is home to a range of industries, including technology, healthcare, e­ducation, and manufacturing. With the presence­ of major employers and a growing entre­preneurial ecosyste­m, Portland provides a stable economic e­nvironment that attracts potential tenants and buye­rs for investment properties.

#42 Lexington-Fayette (Kentucky)

 

MSP $292,038
One-Year % Change in Median Sale Price +11.4%
Homes Sold Above Asking 42.0%
Average Days on the Market 11.4
Sale-to-List Percentage 100.4%
Percentage of Listings with Price Reductions 27.1%

The population of Lexington is increasing, which has resulted in an increase, in the cost of living. However, when compared to cities across the country, Lexington remains quite affordable. Due to its college population, there are plenty of housing options available at reasonable prices. Whether you’re looking to rent or buy a home, your money can go further in Lexington than in American cities.

That being said, like metropolitan areas, housing prices in Lexington have been trending upward in recent years. For buyers who prefer neighborhoods with competition, it might be worth exploring areas such as Castlewood, Irishtown, or Eastland.

#43 Tulsa (Oklahoma)

 

MSP $218,904
One-Year % Change in Median Sale Price +4.0%
Homes Sold Above Asking 41.3%
Average Days on the Market 11.2
Sale-to-List Percentage 99.7%
Percentage of Listings with Price Reductions 31.6%

Over the past year, the housing market in Tulsa has experienced significant growth, with an ave­rage increase of 4% in home­ values. The median home­ value now stands at $218,904. Additionally, there is a strong se­ller’s market, as indicated by the­ current median sale-to-list ratio. Furthermore, homes are se­lling relatively quickly, with a short median days to pe­nding sale. These trends point to a high demand for homes in Tulsa.

Tulsa’s rental marke­t is thriving, with high demand for rental properties and low vacancy rates. This creates opportunitie­s for investors to generate­ passive income through rentals. Additionally, Tulsa’s large­ student population makes it an attractive inve­stment option, thanks to the prese­nce of multiple college­s and universities in the are­a. These institutions include the­ University of Tulsa, Oral Roberts University, Oklahoma State­ University, and the Spartan School of Aeronautics.

#44 Arlington (Texas)

 

MSP $339,551
One-Year % Change in Median Sale Price +10.0%
Homes Sold Above Asking 54.0%
Average Days on the Market 20.1
Sale-to-List Percentage 101.9%
Percentage of Listings with Price Reductions 30.9%

Arlington offers an ide­al location and affordable real estate­ options, combining the benefits of suburban living with conve­nient access to a major city. With its diverse­ business scene, Arlington is an attractive­ choice for real estate­ investment. The city boasts a wide­ range of businesses and e­mployers, from large corporations to small ente­rprises. Its prime location has contributed to a thriving re­al estate market, with high de­mand for homes, including luxury properties.

#45 Cape Coral (Florida)

 

MSP $414,440
One-Year % Change in Median Sale Price +8.5%
Homes Sold Above Asking 31.7%
Average Days on the Market 17.3
Sale-to-List Percentage 99.1%
Percentage of Listings with Price Reductions 32.7%

Now is a time to explore your options if you’re thinking about buying a home in Cape Coral. The prices of homes are still quite affordable. There are plenty of choices. However it’s an idea to act because the market is expected to soften in the next few months gradually.

When it comes to the cost of living, Cape Coral is slightly higher than the average. It’s important to keep in mind that Cape Coral is a tourist spot during the winter season, which can lead to more traffic and congestion. Cape Coral School District has an average ranking, making it more appealing as a place to live.

#46 Sacramento (California)

 

MSP $497,707
One-Year % Change in Median Sale Price -5.8%
Homes Sold Above Asking 56.2%
Average Days on the Market 15.2
Sale-to-List Percentage 101.6%
Percentage of Listings with Price Reductions 37.5%

Sacramento County, located in the heart of the Central Valley region, is a lively area. It has a history, a culture, and a strong economy that have all attracted many people looking for a great quality of life and promising opportunities.

The county’s prime location along with its transportation infrastructure and abundance of amenities, has made it very appealing to both residents and those from out of state who are looking to buy homes. The housing market in Sacramento has experienced an increase in sales activity, although the median sales price has decreased. One significant factor contributing to this trend is the availability of homes for sale, which has decreased by 46% compared to the year.

#47 Sioux Falls (South Dakota)

 

MSP $300,959
One-Year % Change in Median Sale Price +13.4%
Homes Sold Above Asking 48.9%
Average Days on the Market 42.6
Sale-to-List Percentage 101.9%
Percentage of Listings with Price Reductions 9.4%

Sioux Falls has become a spot for real estate investors in the few years due to its strong economy, affordable housing choices, and excellent quality of life. If you’re thinking about investing in the Sioux Falls real estate market, there are plenty of reasons to explore this opportunity.

The city has a diverse economy, with major employers in healthcare, finance, and manufacturing playing roles. This economic vitality has led to a demand for housing in the rental market.

#48 Greensboro (North Carolina)

 

MSP $255,741
One-Year % Change in Median Sale Price +16.4%
Homes Sold Above Asking 56.4%
Average Days on the Market 22.1
Sale-to-List Percentage 101.9%
Percentage of Listings with Price Reductions 21.9%

Gree­nsboro, NC, is currently experiencing a seller’s market, where there is high demand for homes but limited inventory available­. As a result, sellers have the advantage, often selling their homes at or close to the listing price. The shortage of available­ homes and the fast pace of sale­s contribute to this seller’s marke­t.

#49 Providence (Rhode Island)

 

MSP $379,048
One-Year % Change in Median Sale Price +11.4%
Homes Sold Above Asking 58.7%
Average Days on the Market 22.7
Sale-to-List Percentage 102.3%
Percentage of Listings with Price Reductions 17.2%

The Providence real estate market maintains a relatively high level of affordability. While it may not match the prices of properties in Toledo, Providence still offers more affordability than the majority of markets nationwide. Notably, affordability remains robust within the Providence housing market and displays no indications of decline.

For context, homeowners in Providence typically allocate around 11.1 percent of their income to cover monthly mortgage payments. In contrast, the national average hovers at approximately 15.1 percent. In essence, living in Providence proves to be more cost-effective than residing in most other markets throughout the country.

#50 Las Vegas (Nevada)

 

MSP $410,488
One-Year % Change in Median Sale Price -1.3%
Homes Sold Above Asking 41.1%
Average Days on the Market 29.6
Sale-to-List Percentage 99.8%
Percentage of Listings with Price Reductions 26.9%

Las Vegas, located in Nevada, is a city that provides limited walkability. It ranks as the­ 32nd most walkable large city in the U.S. and is home­ to 583,756 residents. Although Las Vegas does offer some public transportation options, it doesn’t have an extensive ne­twork of bike lanes. The downtown area of Las Vegas, famous for its casinos and hotels, stands out as the most acce­ssible neighborhood in the city. Howe­ver, housing options in this area are re­latively limited. Las Vegas has a mix of owne­r-occupied and renter-occupie­d housing units, making it a significant rental property market.

The strong job market in Las Vegas is a significant factor fueling this growth. With major industries like hospitality, gaming, and entertainment, the­ city offers plentiful employment opportunities that attract many individuals to relocate. As a re­sult, the increased de­mand for housing in the area contributes to the­ rise in home values.

Conclusion

Whether you’re looking to buy your dream or make an investment, 2023 could be the perfect time to get started. After a slowdown in housing markets last year, the spotlight is now turning towards markets with a reputation for steady and reliable performance.

These are the markets that have consistently maintained a pace. It’s expected that they will continue to remain active throughout 2023. And mind you, it’s always good to do more research before making real estate investments.

 

All data source: FRED

All image source: Wikipedia


Pros and Cons of Living In Delaware (2023)

As 2023 unfolds, many people across the country are relocating in search of new job opportunities and a better future. Delaware is one of the destined places highly regarded for its corporate-friendly environment, serene beaches, and tax-friendly policies.

 Also known as the ‘First State’ for being the earliest state to ratify the constitution of the United States in 1786, Delaware is considered one of the most favorable places for young professionals and retirees.

 To paint a complete picture of the Delaware living experience, we will provide you with some useful pros and cons of living in Delaware.

Pros and Cons of Living In Delaware in 2023

 Pros of Living in Delaware

Let’s start with the pros first. There are various benefits the residents get for living in this ‘Small Wonder’:

1. A Tax Heaven

Delaware stands out for its tax advantages, making it a sought-after state. People living here do not have to pay any state income tax on their earnings.

Pros of Living in Delaware - A Tax heaven

 Also, there is a complete tax exemption on sales tax, meaning you won’t be paying any additional money when you go grocery shopping anywhere in Delaware.

 These tax relaxations help save thousands of dollars of your income, which can be spent on other essential needs.

 In addition, property taxes in Delaware rank among the lowest nationwide. Individuals and businesses pay less on property taxes than they would in any other state.

2. Favourable Business Environment

Delaware is located in the Mid-Atlantic region, which makes it a convenient place for businesses to operate. The state is close to major markets like New York City, Philadelphia, and Washington, D.C.

 Moreover, Delaware has some of the most flexible corporate laws in the country. This means businesses have a lot of freedom to structure their businesses in the way that works best for them.

3. Natural Beauty

If you love spending time in nature doing various fun activities, you must seriously consider moving to Delaware.

 The state may be small geographically, but it certainly doesn’t disappoint when it comes to natural beauty. The state offers a diverse range of scenic wonders, from its pristine coastline along the Atlantic Ocean to its charming inland landscapes.

 Delaware has a variety of recreation opportunities, including hiking, biking, fishing, boating, and swimming. These opportunities are available year-round, allowing residents to stay active and enjoy the outdoors.

4. Quality Education

The education system in Delaware is a pro for those wanting to move to this state because it is consistently ranked among the finest in the country.

 The state has a high graduation rate (86%), and its students perform well on standardized tests. Delaware also has several magnet schools and charter schools that offer specialized programs.

 Delaware’s high standard of education is a major asset to the state and one of the big reasons people might want to move to this place and start a family.

 Cons of Living in Delaware

Before taking the all-important step of moving to a new place, it’s crucial to know the drawbacks of settling down there. Here are some cons of living in Delaware to give you a balanced perspective:

1. Cost of Living

The first drawback of living in this state is the cost of living, and it’s higher than the national average. The high property prices play a role in driving up the overall cost of living. According to Redfin, the median home price of properties in Delaware is $318,700 as of April 2023.

Cons of Living in Delaware - cost of living

 The demand for housing in Delaware is very high due to the state’s strong economy and its proximity to major urban centers like Philadelphia and New York City. This high demand also drives up prices.

2. Poor Public Transportation

Delaware has a poor public transportation system. The state has a small population but is spread out over a large area. This makes it difficult to provide efficient public transportation.

 The Delaware Department of Transportation (DelDOT) operates the state’s public transportation system. DelDOT offers bus service, paratransit service, and ferry service.

 However, the system is not very extensive. Bus service is limited to major population centers, and paratransit service is only available to people with disabilities. Ferry service is only available to two locations: Cape May, New Jersey, and Lewes, Delaware.

3. Traffic Congestion

Delaware is known to have one of the worst urban interstate pavement conditions. That means that the quality and condition of the paved road surfaces on interstate highways within urban areas of Delaware are generally poor or below average compared to other states or regions.

 This creates a lot of traffic congestion in major urban centers in Delaware like Wilmington, Dover, and New Castle. It takes longer for the residents to get to work or school, and they may feel more stressed and rushed.

4. Harsh Weather

The summers in Delaware can be very hot and humid, with temperatures reaching into the 90s Fahrenheit and humidity levels often above 90%. This can make it difficult to be active outdoors and can lead to heat-related illnesses.

 It’s cold and snowy in winter, with temperatures often dropping below freezing and snowfall accumulations of several inches possible. The thick layer of snow can make it difficult to get around and might lead to power outages and other disruptions.

 In addition, Delaware is located in an area prone to flooding and tornadoes. While tornadoes are rare, they can cause significant damage when they do occur.

5. High Crime Rate

 Delaware has a relatively high crime rate compared to other states. In 2020, the violent crime rate in Delaware was 4.2 per 1,000 residents, which was higher than the national average of 3.4 per 1,000 residents.

 The property crime rate in Delaware was 2,675 per 100,000 residents, which was also higher than the national average of 2,110 per 100,000 residents.

 However, this high crime rate is not prevalent all across the state. There are places in Delaware that have lower crime rates than the national level.

 Final Thoughts

Moving to a completely different place can be stressful, and Delaware, like any other location, has its share of pros and cons. As we wrap up our exploration of the pros and cons of living in Delaware in 2023, it’s important to remember that everyone’s preferences and priorities differ.

 While Delaware offers beautiful natural scenery, a rich historical heritage, and a favorable tax environment, it also faces challenges like substandard highway infrastructure and potentially high crime rates.

 Ultimately, the decision to make Delaware your home depends on what matters most to you. Consider weighing the pros and cons against your personal needs, lifestyle, and aspirations.

Best Places To Live In Maryland in 2023

Located within the picturesque Mid-Atlantic region of the United States, Maryland has a rich history, diverse landscapes, and charming culture. With its prime location along the eastern seaboard, Maryland shares its northern border with Pennsylvania and is bordered to the east by Delaware and the Atlantic Ocean, Virginia, and West Virginia to the south, and Washington, D.C., to the west. Read our article to know the best places to live in Maryland in 2023. 

 The state’s significance extends beyond its borders, as it holds a crucial place in the nation’s story, from its pivotal role in the birth of the United States to its thriving present-day contributions. Maryland’s blend of historical landmarks, vibrant cities, and natural wonders makes it an enticing destination for both residents and visitors alike.

 People want to move to Maryland because it offers an excellent blend of urban, suburban, and rural living. It also has a strong economy, top-level schools, and a variety of attractions.

 So if you’re planning to move here, we’ve assembled a list of the Six best places to live in Maryland.

 List of Best Places To Live In Maryland in 2023

1. Silver Spring

On top of our list is Silver Spring, one of the most culturally heterogeneous places in all of the United States. Besides having a diverse community, which is represented in its culture and cuisine, Silver Spring has some great public schools and a bustling downtown.

Best Places To Live In Maryland - Silver Springs

 Currently, the average price of homes in Silver Spring is $523,000, which certainly reflects the desirability of this dynamic and culturally rich city. Its robust public transportation system makes it easy to get around the city with Metrorail, Metrobus, and Ride-On bus service.

2. North Bethesda

North Bethesda is a vibrant and diverse community located in Montgomery County and a great place that caters to the varied lifestyles and passions of individuals from every age group. It offers a range of housing options, from apartments to single-family homes. The region is known for its excellent schools, parks, and restaurants.

 The median home price here is $530,000, higher than the national average. This is somewhat because of its proximity to Washington, D.C., its robust economy, and the great quality of schools in the area.

 North Bethesda is also a great place to work. There are a number of large corporations headquartered in North Bethesda, as well as many smaller businesses.

3. Gaithersburg

Number 3 on our list of top places to live in Maryland is; Gaithersburg. It is a suburban city with a strong economy, a diverse population, and a lot to offer residents. Gaithersburg hosts several Fortune 500 companies, as well as a variety of businesses, schools, and cultural attractions.

 The city has a reputation for its parks, trails, and lakes. Gaithersburg is a great place to live for families, young professionals, and retirees. There is a wide range of recreational offerings and amenities for everyone.

 As per Zillow‘s data, the median home value in Gaithersburg is $500,000. This is 10.7% higher than the median home value in Maryland, which is $452,500. Houses in Gaithersburg are more expensive but are complemented by a higher average household income of $100,375 compared to Maryland’s average income of $85,940.

4. Rockville

With its prime location in Montgomery County, Rockville offers a balanced mix of suburban tranquillity and urban convenience. The city boasts excellent public schools, a minimal crime rate, and a close community network.

Best Places To Live In Maryland - Rockville

 Rockville’s vibrant downtown area provides a diverse range of dining, shopping, and entertainment options. Also, the city’s proximity to Washington, D.C., offers easy access to employment opportunities and cultural attractions.

 With its well-planned neighborhoods, beautiful parks, and thriving economy, Rockville is an appealing choice for individuals and families seeking a high quality of life.

5. Ocean City

Ocean City, Maryland, is an exceptional place to live, offering an idyllic coastal lifestyle. With its stunning beaches stretching along the Atlantic Ocean, Ocean City provides residents with endless opportunities for relaxation and outdoor activities.

 The vibrant boardwalk, lined with shops, restaurants, and entertainment venues, adds to the charm and liveliness of the city. Beyond its natural beauty, Ocean City also boasts a thriving tourism industry, creating a robust economy and abundant employment opportunities.

 The tight-knit community, rich with local events and festivals, contributes to the warm and welcoming atmosphere that makes Ocean City an ideal place to call home. The median home price in Ocean City is currently $423,320.

6. Columbia

Columbia, Maryland, is widely regarded as a remarkable place to live, cherished for its well-designed neighborhoods, abundant amenities, and a strong sense of community. With a median home price of $600,000, there is a range of housing to suit various lifestyles.

 The crime rate in Columbia is significantly lower than that in Maryland. This makes Columbia a more desirable place to live for many people.

Best Places To Live In Maryland - Columbia

 Columbia takes pride in its commitment to diversity and inclusivity, fostering a harmonious environment where residents can thrive. From its extensive network of parks and trails to its excellent schools and cultural offerings, Columbia provides a high quality of life that appeals to individuals and families alike.

 To Sum It Up

Maryland has a lot to offer residents, from beautiful beaches to vibrant cities. If you’re searching for a place to settle down with a family, establish a business, or retire, Maryland has a community that is right for you.

 Maryland’s proximity to major metropolitan areas like Washington, D.C., provides additional opportunities for employment, education, and entertainment. With its renowned educational institutions, strong economy, and a variety of recreational activities, Maryland offers a balanced lifestyle that combines urban conveniences with natural beauty.

 Whether you’re drawn to the charming coastal towns, the bustling cities, or the tranquil countryside, Maryland’s communities are welcoming and full of possibilities. It is no wonder that Maryland continues to be a sought-after destination for those seeking a vibrant and fulfilling life.

Pros and Cons of Living In Maryland In 2023

If you’re considering moving to the Old Line State, a term historically associated with Maryland, you might be in for a surprise for the various perks the state has to offer. Read our article to know the pros and cons of living in Maryland in 2024 to make an informed decision.

 Maryland holds a lot of historical significance in the creation of the United States, as it was pivotal in the American Revolutionary War. That’s why it’s home to one of the country’s most prestigious military institutions: The United States Naval Academy.

 Besides being a haven for history enthusiasts, Maryland offers a delightful coastal retreat for residents and tourists alike. That’s not just it, there are numerous other pros of living in Maryland that we’ll be talking about in this article.

 We’ll also discuss some of the cons of living in Maryland, so you can have a well-rounded understanding of what to expect in this state.

Pros and Cons of Living in Maryland in 2023 – A Genuine Opinion

 Pros of Living in Maryland

1. A Paradise for History Lovers

As we discussed at the beginning, Maryland is a treasure trove of historical richness. From iconic landmarks to well-preserved colonial towns, Maryland offers a remarkable array of historical sights that takes visitors back in time.

Pros of Living in Maryland

 Annapolis, Maryland’s capital, is a charming city known for its well-preserved 18th-century buildings and landmarks. One such landmark is the Maryland State House, the oldest state capitol still in use for lawmaking in the United States.

 Other places that attract people for their historical significance are the Antietam National Battlefield, St. Michaels showcasing maritime heritage, and the restored historic buildings of Frederick.

2. Proximity to Major Urban Centers

Maryland is unique in that it is close to major metropolises like Washington, D.C., and Philadelphia, offering residents a distinct advantage in terms of accessibility to vibrant urban centers.

 From the heart of Maryland, the nation’s capital, Washington, D.C., is often just a short drive or train ride away, providing access to world-class museums, iconic landmarks, and a thriving political and social scene.

 Similarly, Philadelphia is conveniently located within reach of Maryland, with travel times ranging from approximately one to three hours, depending on the specific location in Maryland.

3. Diverse Culinary Delicacies

Maryland has a variety of delightful cuisines that satisfies all taste buds. The state is famous for its seafood, especially Crabs and Oysters, straight from the Chesapeake Bay.

 You can savor the succulent sweetness of Maryland blue crabs steamed to perfection, enjoy the rich and briny flavors of freshly shucked Chesapeake Bay oysters, or indulge in other seafood delights like crab cakes, shrimp, and rockfish.

 Moreover, the Natty Boh, short for National Bohemian Beer, is a famous Maryland drink that has become synonymous with the state’s social gatherings and sporting events.

4. Outdoor Adventures

Owing to its diverse natural landscape, living in Maryland comes with the added benefit of great outdoor adventures.

 Residents can hike scenic trails in the Appalachian Mountains, explore the lush forests of the Chesapeake Bay watershed, kayak along serene waterways, and enjoy recreational activities in the state’s numerous parks.

 Maryland boasts over 50 state parks, offering the perfect opportunity for weekend campers to retreat and immerse themselves in nature’s embrace.

5. Thriving Job Market

One of the primary motivations that drive people to move elsewhere is to find a good job to sustain their lifestyle. Well, if you’re planning to live in Maryland, you’ll find opportunities in various industries, including healthcare, education, technology, and government.

 Maryland’s economy is strong and growing, with a low unemployment rate and an above-average household income. As per the Maryland Department of Labor, the healthcare sector employs the most people in Maryland, with over 300,000 jobs.

 Some major hospitals and medical centers include the Sinai Hospital of Baltimore and the Johns Hopkins Hospital.

 Maryland also hosts a number of technology companies, including Northrop Grumman, Lockheed Martin, and Johns Hopkins Applied Physics Lab. The technology industry employs over 100,000 people in Maryland.

 Cons of Living in Maryland

1. High Cost of Living

Living in Maryland comes with a high cost, particularly in cities like Bethesda, Potomac, and Rockville. These areas are known for their affluent neighborhoods, excellent schools, and proximity to major job centers like Washington, D.C.

Cons of Living in Maryland

 The demand for housing, combined with desirable amenities and convenient access to urban opportunities, contributes to the higher cost of living.

 Additionally, expenses for transportation, healthcare, and groceries tend to be higher than the national average. It’s essential to carefully consider these factors when planning to reside in these cities.

2. Unpredictable Weather

The weather in Maryland can be a downside of living in the state, characterized by its variability and occasional unpredictability.

 Residents often experience hot and humid summers, cold winters with occasional snowstorms, and transitional seasons that can bring fluctuating temperatures and frequent rain showers.

 The ever-changing weather patterns can make planning outdoor activities challenging and require adapting to different climate conditions throughout the year.

3. Traffic Congestion

Traffic congestion can be a significant obstacle for people living in Maryland, especially in the major cities and along the I-95 corridor. Rush hour traffic, road construction, and bottlenecks on major highways can lead to frustrating delays and longer commute times.

 Navigating through heavy traffic can be a daily challenge for residents, impacting productivity and adding stress to daily routines. Efficient planning and exploring alternative transportation options can help mitigate the effects of traffic congestion in Maryland.

4. High Tax Burden

Another notable downside of living in Maryland is the high tax burden imposed on residents. The state has a progressive income tax rate, ranging from 2.5% to 5.75%. Property taxes are also a significant factor, with the average property tax amounting to $3,200.

 Additionally, Maryland imposes a statewide sales tax of 6% and a gasoline tax of 36.1 cents per gallon. The presence of toll roads and bridges adds to the financial burden.

 These taxes and fees contribute to Maryland’s higher cost of living, which residents should consider when budgeting their expenses.

5. Safety Concerns

Safety concerns can be a prominent issue for those living in Maryland. While the state offers vibrant cities and picturesque neighborhoods, certain areas experience higher crime rates, particularly in urban centers.

 Baltimore, known as the most dangerous city in Maryland, experiences a violent crime rate five times higher than the national average.

 It is crucial for residents to remain vigilant of their surroundings, particularly in these areas. Researching the crime rate in specific neighborhoods is essential when considering where to live in Maryland.

 In A Nutshell

Living in Maryland can be an exciting experience with its rich history, proximity to major urban centers, diverse culinary offerings, and outdoor recreational opportunities.

 However, it’s essential to consider the downsides, such as the high cost of living, traffic congestion, and certain areas with higher crime rates.

 While these cons represent negative aspects of living in Maryland, it is essential to keep in mind that they are not uniformly prevalent throughout the entire state. Crime, for instance, may pose challenges in certain cities, whereas others may offer safer environments.

 It is crucial to research and assess specific neighborhoods to make informed decisions about where to reside in Maryland.

How to Rent Your Home in Maryland in 2023: The Ultimate Guide for New Landlords

As the year 2024 approaches, many people may consider to rent out homes in Maryland as a way to earn extra income. If you’re a new landlord in Maryland, you may be wondering how to get started and what steps you need to take to rent out your property successfully. In this comprehensive guide, we’ll walk you through the entire rental process in Maryland and provide you with all the information you need to become a successful landlord.

But first, let’s take a moment to consider that renting out homes in Maryland in 2024 is a good idea. For starters, Maryland has a robust rental market, with high demand for rental properties and competitive rental rates. Additionally, renting out your home can provide a steady source of income that can help you cover expenses or save for the future. And, if you’re planning on moving out of the area temporarily, renting out your home can help you avoid the costs and hassles of selling your property and buying a new one when you return.

So, whether you’re a first-time landlord or an experienced real estate investor, this guide will provide you with the information you need to succeed. Let’s get started!

Rent Out Homes in Maryland – Understanding the Rental Process 

As a landlord in Maryland, it’s essential to understand the rental process and the legal requirements that come with it. Here’s a step-by-step guide to the rental process in Maryland:

Rent Out Homes in Maryland - Understanding the Rental Process 

 

Legal Requirements for Landlords

Before you can rent out your property in Maryland, you’ll need to meet certain legal requirements. These include:

  • Registering your rental property with the Maryland Department of Assessments and Taxation (SDAT).
  • Obtaining a rental license from your local jurisdiction (e.g., city or county).
  • Complying with local zoning laws and building codes.
  • Providing a written lease agreement that complies with Maryland law.
  • Complying with fair housing laws, which prohibit discrimination based on factors such as race, gender, and disability.

It’s important to note that these requirements may vary depending on your location and the type of property you’re renting out. Be sure to check with your local government and a qualified attorney to make sure that you comply with all applicable laws and regulations.

Steps to Renting Out a Property in Maryland

Once you’ve met the legal requirements for landlords in Maryland, you can start the process of renting out your property. Here are the key steps involved:

Steps to Renting Out a Property in Maryland

  • Prepare your property for rent: This may involve making repairs, cleaning, and staging your property to attract potential tenants.
  • Set a rental price: Research comparable rental properties in your area to determine a fair rental price for your property.
  • Advertise your property: Use online listings, social media, and other advertising channels to reach potential tenants.
  • Screen potential tenants: Conduct background checks and credit checks, and verify employment and income to make sure that you select a qualified tenant.
  • Sign a lease agreement: Use a written lease agreement that complies with Maryland law and clearly outlines the terms of the rental agreement.
  • Collect security deposit and first month’s rent: Collect a security deposit and first month’s rent from the tenant before they move in.
  • Move-in inspection: Conduct a move-in inspection with the tenant to document the condition of the property at the start of the lease.

Types of Rental Properties in Maryland

Maryland offers a variety of rental properties, including:

  • Single-family homes: These are standalone homes that are rented out to one tenant or family.
  • Multi-family homes: These are properties that contain multiple rental units, such as duplexes or apartment buildings.
  • Condos: These are individually owned units within a larger building or complex, which can be rented out by the owner.
  • Townhouses: These are attached homes that are typically rented out to one tenant or family.

Each type of rental property comes with its own advantages and disadvantages, so it’s essential to consider your goals as a landlord and the needs of potential tenants when choosing a property to rent out.

Preparing Your Home for Rent

Before you can start advertising your property for rent, you’ll need to make sure that it’s in good condition and ready for tenants to move in. Here are the steps new landlords should take to prepare their homes for rent:

rent out homes in Maryland - Preparing Your Home for Rent

 

Cleaning

One of the first steps in preparing your home for rent is to thoroughly clean it. It includes:

  • Cleaning all surfaces, including floors, walls, and countertops.
  • Deep cleaning of carpets and upholstery.
  • Washing windows and screens.
  • Cleaning appliances, including the refrigerator and stove.
  • Cleaning and disinfecting bathrooms.

You may want to consider hiring a professional cleaning service to make sure that your property is thoroughly cleaned and ready for tenants.

Repairs

Once your home is clean, it’s time to address any repairs that need to be made. It includes:

  • Fixing any leaks or water damage.
  • Repairing or replacing broken windows, doors, or locks.
  • Repairing or replacing damaged flooring, walls, or ceilings.
  • Checking and repairing any electrical or plumbing issues.
  • Ensuring that the heating and cooling systems are working correctly.

Addressing these repairs before you start advertising your property for rent can help to attract potential tenants and ensure that they have a positive rental experience.

Upgrades

In addition to addressing any necessary repairs, you may want to consider making upgrades to your home to make it more appealing to potential tenants. It may include:

  • Updating appliances, such as the refrigerator or dishwasher.
  • Installing new flooring or countertops.
  • Repainting walls or cabinets.
  • Adding new light fixtures or ceiling fans.
  • Upgrading the heating or cooling system.

While these upgrades may require an initial investment, they can help to attract higher-quality tenants and increase the rental income you receive from your property over time.

Marketing Your Rental Property

Now that your property is clean, repaired, and upgraded (if necessary), it’s time to start marketing it to potential tenants. Here are some tips and advice on how to effectively market your rental property:

Create a Compelling Listing

When creating a listing for your rental property, make sure to highlight its best features and amenities, such as:

  • The number of bedrooms and bathrooms.
  • Any special features, such as a pool or fireplace.
  • The location and neighborhood.
  • The rental price and any included utilities or services.
  • Any pet policies or restrictions.

In addition, make sure to include high-quality photos of your property that showcase its best angles and features. You may want to consider hiring a professional photographer to take these photos.

Set the Right Rental Price

Setting the right rental price is crucial in attracting potential tenants and maximizing your rental income. To determine the right rental price for your property, consider factors such as:

  • The location and neighborhood.
  • The size and condition of your property.
  • The local rental market and competition.
  • Any included utilities or services.

You can use online rental calculators or consult with a real estate agent to help determine the fair rental price for your property.

Advertise on Relevant Platforms

In addition to creating a listing on a popular rental platform, such as Zillow or Craigslist, consider advertising your property on relevant local platforms, such as:

  • Local newspapers or magazines.
  • Community bulletin boards.
  • Social media groups or pages.
  • Local real estate or property management agencies.

By advertising on these platforms, you can reach a wider audience and increase the chances of finding a quality tenant for your rental property.

Tenant Screening and Selection

Once you start receiving applications from potential tenants, it’s essential to screen and select them carefully to make sure that you find a trustworthy tenant who can pay rent on time and also take good care of your property. Here’s how you can conduct a thorough tenant screening process:

Conduct Background Checks

One of the most critical steps in the tenant screening process is conducting a background check on each potential tenant. It can include:

  • Checking their credit report to see if they have a history of paying bills on time and managing their finances responsibly.
  • Running a criminal background check to ensure that they don’t have a history of criminal activity or violence.
  • Verifying their rental history to see if they have a history of evictions or other issues with previous landlords.

There are many online background check services available, or you can hire a professional tenant screening company to do this for you.

Verify Income and Employment

Another critical aspect of the tenant screening process is verifying each applicant’s income and employment status. It can help ensure that they have the financial means to pay rent on time. You can ask for the following:

  • Recent pay stubs or tax returns to verify their income.
  • Contact information for their employer to verify their employment status.

Check References

Finally, it’s a good idea to check references from each potential tenant to get a sense of their character and reliability. You can ask for references from:

  • Previous landlords to get an idea of how they have treated previous rental properties.
  • Personal references, such as friends or family members, to get a sense of their overall character and personality.

By conducting a thorough tenant screening process, you can increase the likelihood of finding a quality tenant who will take good care of your property and pay rent on time.

Lease Agreements

Once you have selected a tenant, the next step is to create a lease agreement that outlines the terms of the rental arrangement. In Maryland, there are specific requirements that must be included in a lease agreement, including required disclosures, lease terms, and security deposit requirements.

Required Disclosures

Maryland law requires that certain disclosures be included in a lease agreement. These disclosures include the following:

  • Lead paint disclosure: If your property was built before 1978, you must disclose the presence of lead paint and provide the tenant with the EPA’s pamphlet on lead-based paint hazards.
  • Smoke detector disclosure: You must disclose the location of smoke detectors in the rental property and verify that they are in working order.
  • Notice of tenant’s rights: You must provide the tenant with a notice of their rights as a tenant, including their right to a habitable property, privacy, and security.

Lease Terms

The lease agreement should also include the terms of the rental arrangement, such as:

  • Rent amount and due date: Specify the monthly rent amount and the date it is due.
  • Length of lease: State the duration of the lease agreement, whether it is a fixed-term lease (e.g., one year) or a month-to-month agreement.
  • Late fees: Outline any fees that will be charged if the rent is not paid on time.
  • Utilities and services: Indicate which utilities and services (if any) are included in the rent.

Security Deposit Requirements

In Maryland, landlords are allowed to charge a security deposit equal to no more than two months’ rent. The lease agreement should specify the amount of the security deposit, as well as the conditions under which it will be refunded to the tenant.

Managing Your Rental Property

Managing a rental property can be challenging, but it’s an essential part of being a landlord. Let’s discuss the critical elements of managing your rental property effectively.

Maintaining the Property

Regular maintenance of your rental property is essential to keep it in good condition and to attract and retain tenants. This section will cover the following topics:

  • Conducting regular inspections
  • Scheduling repairs and maintenance
  • Responding promptly to tenant requests

Handling Tenant Complaints and Repairs

No matter how well-maintained your rental property is, issues will inevitably arise. In this section, we’ll cover the following topics:

  • Responding to tenant complaints
  • Addressing repairs and maintenance issues
  • Handling emergencies

Collecting Rent

Collecting rent is a critical part of managing your rental property, and it’s essential to do it correctly and consistently. This section will cover the following topics:

  • Setting up a rent collection system
  • Enforcing late payment fees
  • Dealing with non-payment and evictions

Conclusion

Renting out your home in Maryland can be a lucrative and rewarding experience, but it requires careful planning, preparation, and management. By following the steps outlined in this guide, you can become a successful landlord and enjoy the benefits of passive income and long-term wealth building.

Remember to always prioritize your tenants’ needs, maintain your property regularly, and stay up-to-date with Maryland’s rental laws and regulations. With patience, persistence, and a commitment to excellence, you can achieve your goals as a new landlord in Maryland. Best of luck on your rental journey!

FAQs

How much should I charge for rent in Maryland?

The rental price for your home in Maryland will depend on several factors, including its location, size, condition, and amenities. You should conduct a rental market analysis to determine the fair market value of your property and set a competitive rental price.

What are my responsibilities as a landlord in Maryland?

As a landlord in Maryland, you are responsible for maintaining your rental property in a safe and habitable condition, providing essential services and repairs, and following all applicable state and local laws and regulations.

How do I screen potential tenants for my rental property?

You can screen potential tenants for your rental property by conducting background checks, verifying employment and income, checking references, and interviewing them in person.

Can I evict a tenant in Maryland?

Yes, you can evict a tenant in Maryland for a valid legal reason, such as failure to pay rent or violating the lease agreement. However, you must follow the proper legal procedures and obtain a court order before evicting a tenant.

 

 

 

Best States and Cities for Renters in 2023

What does a person consider when selecting a state or city for renting a home?

Is it the cost of living? Or the safety? Maybe the climate and weather. On top of all, it might be a state that is more rental-friendly in terms of its laws.

Well, it can be anything. From affordable rent options to a better living place to easily accessible amenities.

However, finding the best states and cities for renters is not that easy. Because it involves plenty of analysis based on various metrics such as median rent, home price rent ratio, cost of living, rental vacancy rate, and many others.

To save you valuable time, we have done all of that analysis and made a list of the top 4 states and top 4 cities that offer the most ideal living conditions for renters in 2023.

Let’s start with the list of states first.

Top 4 Best States for Renters in 2023

1.    Delaware (Best in Terms of Laws Benefitting Renters)

Delaware is located in the mid-Atlantic region of the United States. It shares borders with Maryland to the south and west, Pennsylvania and New Jersey to the north, and the Atlantic Ocean to the east.

Best States and Cities for Renters - Delaware

The state is named after the nearby Delaware River, and as of July 1, 2019, it had a population of approximately 973,764 people, which is an increase of about 8.4% since 2010, according to the U.S. Census Bureau.

The cost of living in Delaware is slightly higher than that of the average American state. The prices of goods and services in Delaware may be slightly higher than in other states.

Despite this, Delaware is still a highly sought-after location for people to live and work.

One of the reasons for this is that Delaware does not have a sales tax, which means that consumers do not have to pay an additional percentage on top of the price of goods and services purchased within the state.

It can make living and working in Delaware more affordable and attractive to many people. As a result, Delaware has seen an influx of new residents who are drawn to the state’s lack of sales tax.

Reasons Why Delaware is the Best State for Renters

Affordability

Delaware is relatively affordable compared to other states on the East Coast, such as New York or Massachusetts. According to Zillow’s data, the median rent for all property types in Delaware is $1,950 per month, while the national average is $2,165. The cost of living in Delaware is also lower than in many neighboring states, which makes it an attractive option for renters.

No Sales Tax

As mentioned earlier, Delaware is one of the few states in the US that does not have a sales tax. It means that consumers do not have to pay additional fees on top of the purchase price of goods and services. It can make a living in Delaware more affordable for renters, as they do not have to factor in sales tax when budgeting for expenses.

Strong Tenant Protection Laws

Delaware has some of the strongest tenant protection laws in the country. For example, landlords are required to provide a habitable living space for their tenants and make necessary repairs promptly. Tenants also have the right to withhold rent if the landlord fails to make necessary repairs. Additionally, Delaware law prohibits landlords from retaliating against tenants who exercise their rights.

Good Quality of Life

Delaware is known for its high quality of life. The state has a relatively low crime rate, good schools, and plenty of outdoor recreational opportunities. It also has a strong sense of community, with many small towns and tight-knit neighborhoods. These factors can make Delaware an attractive place for renters to live and raise a family.

Proximity to Major Cities

Although Delaware is a relatively small state, it is located close to several major East Coast cities, including Philadelphia, Baltimore, and Washington DC. It can be a big draw for renters who want to live in a more affordable area while still being within commuting distance of these larger metropolitan areas.

2.    Montana (Best in Terms of Rent Prices)

Montana has a highly affordable rental market, even in its most densely populated cities.

The average rent prices for five of Montana’s most populated cities, i.e., Great Falls, Butte-Silver Bow, Billings, Bozeman, and Missoula, range from $625 (Billings) to $1800 (Bozeman).

Best States and Cities for Renters - Montana

Renters in Montana can expect to pay lower housing costs than renters in other states, even in cities with higher populations.

If you are considering housing costs when planning a move, Montana’s affordable rental market can save you money on housing expenses.

Reasons Why Montana is the Best State for Renters

Low Rent Prices

Montana has a relatively low cost of living compared to other US states, including affordable housing costs. According to Zillow’s data, the median rent for all property types in Montana is $1,850 per month, which is lower than the national average of $2,165. Additionally, the state does not have a sales tax, which can make a living in Montana more affordable overall.

Plenty of Outdoor Recreational Opportunities

Montana is known for its stunning natural beauty and abundant outdoor recreational opportunities, including hiking, camping, fishing, and skiing. Many renters in Montana are drawn to the state because they can enjoy these activities without traveling far from their homes.

Strong Sense of Community

Montana has a relatively small population compared to many other states, which can foster a strong sense of community and belonging among residents. Many renters in Montana appreciate the close-knit communities and friendly neighbors they encounter while living there.

Good Quality of Life

Montana has a relatively low crime rate and good schools, which can contribute to a high quality of life for renters. Additionally, the state has a thriving arts and culture scene, with many museums, theaters, and galleries to explore.

Affordable Rental Market in Major Cities

Despite having some of the most populated cities in the state, Montana still offers affordable rental prices. For example, according to data from Apartment List, the average rent for a one-bedroom apartment in Billings is $625 per month, while in Missoula, it is $1,295 per month. These prices are lower than the national average for rent in similarly sized cities.

3.    New Mexico (Best in Terms of Eviction Rate)

New Mexico is known for its stunning desert landscapes, snow-capped mountains, and sprawling national parks.

For renters who enjoy spending time outdoors, New Mexico offers a variety of recreational opportunities and beautiful scenery to explore.

Reasons Why New Mexico is the Best State for Renters

Lowest Eviction Rates

According to the latest available data from the Eviction Lab, New Mexico had one of the lowest eviction rates in the US in the last few years. This indicates that renters in New Mexico are relatively protected from eviction compared to renters in other states.

Rich History and Culture

New Mexico has a rich history and vibrant culture that is reflected in its art, architecture, and cuisine. Many renters are drawn to the state because of its unique blend of Native American, Hispanic, and Anglo cultures.

Affordable Living

Compared to other states in the US, New Mexico offers relatively affordable living, including housing costs. According to Zillow’s data, the median rent for all property types in New Mexico is $1,625 per month, which is lower than the national average of $2,165.

Warm Climate

New Mexico has a warm, sunny climate that can be appealing to renters who enjoy spending time outdoors. The state averages over 300 days of sunshine per year, making it an ideal destination for those who love outdoor activities.

4.    Wyoming (Best in Terms of Rental Availability)

Wyoming is a state with breathtaking natural beauty, including wide-open spaces and gorgeous scenery. The state is home to many popular outdoor activities and national parks, making it an ideal location for nature lovers.

Additionally, Wyoming is recognized as one of the most affordable states to live in the United States. The cost of living is relatively low, and the state offers affordable home prices, above-average incomes, and lower-than-average unemployment rates, making it an attractive option for those seeking a less expensive lifestyle.

Reasons Why Wyoming is the Best State for Renters

Breathtaking Landscapes

Wyoming is known for its stunning natural beauty, including breathtaking mountains, lush wilderness, and unique rock formations. Renters who enjoy spending time outdoors can take advantage of the state’s many hiking trails, national parks, and scenic drives.

Low Cost of Living

Compared to many other states in the US, Wyoming offers a relatively low cost of living. This includes housing costs, which can be more affordable than in other states. According to Zillow’s data, the median rent for all property types in Wyoming is $ 1,200 per month, which is lower than the national average of $2,165.

Rich History

Wyoming has a rich history that is reflected in its name, which comes from a Native American word that translates to “at the immense plain.” The state was also home to some of the earliest American explorers, including the famous Lewis and Clark expedition. Renters interested in history can explore many historical sites and museums throughout the state.

Top 4 Best Cities for Renters in 2023

1.    Lincoln, Nebraska

Lincoln, Nebraska, is a fantastic city for renters, as many of its features make it an attractive option.

Renters who enjoy spending time outdoors would have a great time there, as many parks are within walking distance of most residential places. It makes it the best city for park accessibility among the top 4 best cities for renters.

Lincoln has a low average rent compared to other cities on the list, making it an affordable option for renters. In addition, apartments in Lincoln tend to be spacious, which is another advantage for renters.

However, not all renters will find Lincoln ideal if they have pets since the percentage of rentals that allow pets is lower than the national average.

Overall, Lincoln is a city that offers an outstanding balance of affordability, outdoor recreation, and spacious apartments for renters.

2.    Virginia Beach, Virginia

The average size of two-bedroom apartments in Virginia Beach is ranked 31st out of 93 cities evaluated. However, renters in Virginia Beach can expect to pay a relatively low percentage of their income on rent.

Renters in Virginia Beach can find apartments with amenities such as gyms, pools, and dryers. However, finding a new or renovated kitchen with stainless steel appliances may be more challenging since only about 13% of rentals offer this feature.

Renters in Virginia Beach who have pets will be pleased to know that most rentals (91%) allow pets.

Some of the attractions in Virginia Beach are wildlife preserves, ocean views, and hiking trails. However, renters should be prepared for the possibility of hurricanes and flooding. Virginia Beach experienced a record-breaking hurricane season in 2020; the 2021 season was also above average. The city is taking steps to mitigate the impact of flooding by widening its beaches.

Overall, it is a city that offers a balance of affordability, natural attractions, and the best amenities for renters, but with the caveat of the possibility of hurricanes and flooding.

3.    Raleigh, North Carolina

Raleigh is a great place to find an apartment with amenities at a reasonable monthly rent. Raleigh apartments are known for their ample space; many come with pools (47%) and gyms (76%). It is an ideal location for renters who prioritize a comfortable living experience.

Raleigh’s median household income of $67,266 helps make rent affordable. The average rent for a two-bedroom apartment in Raleigh consumes about 27% of the median household income. It is a relatively low percentage compared to other cities, which makes Raleigh a good option for renters who want to live comfortably without breaking the bank.

Overall, Raleigh is a city that offers a lot to renters in terms of affordability, amenities, and low crime rates, with the added benefit of access to top-tier universities in the area.

4.    Scottsdale, Arizona

The city of Scottsdale in Arizona has been experiencing a significant increase in rental units since 2017. This building boom has led to new construction projects, which represent 12% of the existing rental units in the city. Despite being a growing city, Scottsdale is still relatively affordable compared to other cities, with a median household income of $88,213, and renters can expect to spend about 30% of their income on a two-bedroom apartment.

When it comes to amenities, Scottsdale does not disappoint. Most apartment buildings in the city come equipped with gyms (86%) and in-unit washers and dryers (81%). Additionally, 93% of rental units in Scottsdale allow pets, making it an excellent option for animal lovers.

Scottsdale’s weather can be challenging, with hot summers and the potential for floods and wildfires. However, the city’s crime rate is average compared to other cities. Although only 40% of Scottsdale’s residents are within a 10-minute walk of a park, there is plenty to do in Old Town Scottsdale.

This pedestrian-friendly area is filled with shops, restaurants, and art galleries, and there are bike and walking trails for outdoor enthusiasts. For a unique way to explore the city, hop onto one of the four trolley routes and enjoy the sights.

 

On What Basis Did We Select the Top Best States and Cities for Renters in 2023?

Our list of top best states and cities for renters is based on the following factors:

The Bottom Line

There are many factors that renters may consider when choosing a place to live, such as affordability, amenities, and access to parks and outdoor activities.

While each individual’s priorities may differ, it is essential to carefully evaluate the options and weigh the pros and cons before deciding.

With proper research and consideration, renters can find a place that meets their needs and provides a comfortable and enjoyable living experience.

 

 

Best Ways To Come Up With Down Payments for Rental Properties

Rental properties can be a great investment option for real estate investors looking to build wealth and generate passive income. To get started down that path, you’ll need to ensure that you have enough funds available for your down payment—but don’t worry! There are many different ways to come up with down payments for rental properties that go beyond liquid savings and retirement accounts.

This blog post will explore creative ways to come up with down payments for rental properties, including saving money, financing options, using retirement funds, and partnering with others.

Table of Contents:

Savings

Saving money for a down payment

Benefits of saving for a down payment

Financing Options

Traditional Mortgage Options

Alternative Financing Options

Hard money loans

Owner financing

Crowdfunding

Using Retirement Funds

Using Retirement Funds for a Down Payment

Rules and Regulations surrounding the use of Retirement Funds

Comparison of the benefits and drawbacks of using Retirement Funds

Partnering with Others

Partnering with others to come up with a down payment

Different Partnership Structures and Agreements

Comparison of the benefits and drawbacks of partnering with others

Conclusion

Savings

Saving money for down payments for rental properties

Saving money for a down payment is one of the most straightforward ways to come up with down payments for rental properties. It may take longer to save enough money for a down payment, but it also allows you to avoid taking on additional debt. Here are some tips for saving money and increasing income:

Saving money for down payments for rental properties

  • Set a specific savings goal and create a budget to help you reach it
  • Cut back on unnecessary expenses, such as dining out or subscription services
  • Look for ways to boost your earnings, such as taking on a side hustle or requesting a salary increase at work.
  • Consider opening a high-yield savings account to earn interest on your savings.

Benefits of saving for a down payment

Saving for a down payment also has several benefits. For one, it allows you to avoid taking on additional debt. You are also building a nest egg for future investments by saving for a down payment.

Financing Options

There are a few different options available when it comes to financing a rental property. The most common choice is a traditional mortgage, typically obtained through a bank or financial institution. However, there are alternative financing options, such as hard money loans and owner financing.

Traditional Mortgage Options

A traditional mortgage is a loan secured by the property you purchase. In case of non-repayment of the loan, the lender has the right to seize the property through foreclosure. Traditional mortgages typically require a down payment of at least 20% and have lower interest rates than other financing options.

Down payments for rental properties - Traditional Mortgage Options

Alternative Financing Options

Hard money loans

Hard money loans are loans where you borrow money for a short time and use your property as collateral. They are typically used by investors who are flipping houses or rehabbing properties. Hard money loans have higher interest rates and fees than traditional mortgages, but they can be a good option if you need to close a property quickly.

Owner financing

Owner financing is when the seller of the property acts as the lender. This can be a better option if you can’t qualify for a traditional mortgage or hard money loan. However, it is essential to note that owner financing can be risky and should be approached with caution.

Crowdfunding

Crowdfunding is a non-traditional way of coming up with down payments for rental properties. It involves raising finances from a large number of people, typically via the Internet, to fund a specific project or venture. Several platforms are available for real estate crowdfunding, allowing investors to pool their money to purchase rental properties.

Down payments for rental properties - Crowdfunding

Using Retirement Funds

Using Retirement Funds for a Down Payment

Another option for coming up with a down payment is using retirement funds. There are several ways to achieve this, such as taking a loan from your 401(k) or withdrawing funds from an IRA. However, it is important to note that rules and regulations surround using retirement funds, and it is crucial to consult with a financial advisor before making any decisions.

Rules and Regulations surrounding the use of Retirement Funds

Taking a loan from your 401(k) allows you to borrow up to 50% of the balance, but you will need to pay it back within five years. Withdrawing funds from an IRA, on the other hand, will trigger taxes and penalties unless it’s a first-time homebuyer withdrawal.

Benefits and Drawbacks of using Retirement Funds

Using retirement funds for a down payment can be a good option if you need quick money and have a solid plan to pay it back. However, it is crucial to weigh the benefits and drawbacks, such as the impact on your retirement savings and the potential tax implications, before deciding.

Partnering with Others

Partnering with others to come up with a down payment

Another way to come up with a down payment is by partnering with others. This can include joining hands with a family member, friend, or business partner.

Different Partnership Structures and Agreements

There are a few different partnership structures and agreements that you can explore, such as joint ventures, silent partnerships, or general partnerships. Each structure has its pros and cons, and it is crucial to seek advice from a legal or financial expert before entering into any agreements.

Benefits and Drawbacks of partnering with others

Partnering with others can be a great way to come up with down payments for rental properties. By pooling resources, you can purchase a property that would otherwise be out of reach. You can also share the workload and responsibilities of owning and managing a rental property.

However, it is important to remember that partnering with others also comes with risks, such as potential disagreements and legal disputes. It is vital to have an explicit partnership agreement in place to mitigate these risks.

Conclusion

 

In conclusion, there are various creative ways to come up with down payments for rental properties, including saving money, financing options, using retirement funds, and partnering with others. Each option comes with its pros and cons, and it’s important to explore them before deciding. It’s also important to consult with a financial advisor or lawyer to ensure that you make the best decision for your specific situation.

As a final thought, rental properties can be a great investment option, but the key is to be prepared and have a plan before making the purchase. By understanding the different ways to come up with a down payment, you can be better equipped to make an intelligent investment decision. We hope this blog post has provided you with some valuable information and that you will start exploring your options for a down payment.

Housing Rental Market Trends to Pay Attention to in 2023

As the world continues to navigate through the aftermath of the pandemic and economic uncertainty, the housing rental market trends have seen their fair share of challenges.

However, with 2023 at our disposal, property managers and landlords need to stay informed about the trends shaping the market.

Buildium released its annual property management and industry research, providing insights into the key trends we can expect to see in the rental market in 2023.

From the impact of inflation and interest rates to the changing strategies of property managers, here’s a look at the rental market trends to pay attention to in 2023.

9 Biggest Housing Rental Market Trends to Pay Attention to in 2023

Here are the top nine predictions for 2023’s housing rental market trends.

Trend #1: Investment-Minded Owners Will Increase in the Rental Market

According to a survey conducted by Buildium, Propertyware, and NARPM for their 2023 Property Management Industry Report, half of the rental property owners surveyed view themselves as strategic investors. The remaining 24% consider themselves accidental or unintentional landlords who either inherited or stumbled upon a property they couldn’t sell. In recent years, there has been a significant increase in the number of investors seeking the assistance of property managers to manage their properties.

As a result, property management companies have had to adapt to the changing needs of their clients. Today, investors are looking for more than just routine maintenance, rent collection, and eviction management services. They want to work with companies that can provide expert advice on improving their properties’ value and diversifying their investment portfolios.

Modern property management companies now offer property enhancements, local market analysis, and portfolio diversification services. Some investors even prefer to have their property managers search for new properties on their behalf.

As a property management company, it’s essential to consider how you can best meet the needs of your increasingly savvy clients. It may involve forming an in-house team or collaborating with local contractors to provide property enhancements. Additionally, reviewing and updating your marketing strategy to reflect the new services you offer is crucial.

Trend #2: Single-Family Rentals Will Still Dominate

According to recent surveys from PwC and Buildium, the demand for single-family rental homes remains strong. However, there has been an increase in the percentage of individuals residing in rural or suburban areas over the past five years, making up 68% of all respondents.

Property managers of single-family homes should consider offering desirable features to attract and retain tenants. It’s also important to remember that many renters of single-family homes may have financial challenges, such as more prominent families, lower savings, and higher levels of debt than those living in multi-family dwellings.

As we approach 2023 and the economy continues to face challenges, property managers must maintain open communication with tenants and support those who may be negatively impacted.

Trend #3: Mixed-Use Properties Will Make a Comeback

During the pandemic, mixed-use facilities – which offer a combination of residential, retail/entertainment, and commercial spaces – decreased in popularity. However, these properties are returning as development is starting to pick up again.

According to Price Waterhouse Cooper’s Emerging Trends in Real Estate 2023 report, 500 of the 1,300 malls in the United States are renovating to become mixed-use venues. These properties offer numerous benefits, including the convenience of having grocery stores, pharmacies, and hospitals nearby, as well as an array of dining and entertainment options.

Property managers with the resources and financial means to manage retail spaces may want to consider investing in a mixed-use development. Even if mixed-use properties are not currently a target audience, it is essential to understand how they could impact your current portfolio. For example, homes near commercial and residential complexes will easily access a wide range of services.

 Trend #4: Inflation is Likely to Continue in 2023

The cost of living has risen significantly over the past few years, impacting everything from groceries to fuel and heating oil. According to the Dallas Federal Reserve Bank, inflation has reached a 40-year high and continues to rise, despite predictions of slowing down in 2023. It has also affected rental properties, as a 2023 Property Management Industry Report survey found that only 26% of renters consistently paid their payments on time, while 11% reported struggling to keep up.

However, property managers have found that keeping communication open with tenants during the pandemic has helped to minimize late or missed payments. To maintain profit in the face of rising costs, managers can also renegotiate contracts and look for more cost-effective solutions for expenses such as vendor fees and overhead. Additionally, directing tenants to relevant community resources, such as federal aid programs, can provide renters support.

Trend #5: Renters Come from All Age Groups

A substantial number of American renters are now part of the baby boomer generation, growing tired of homeownership’s burdens. At the same time, the largest generation in the United States, the millennials, are increasingly entering the housing market each year, primarily in the rental sector. This trend has significant implications for the accommodations and amenities that property managers may offer their tenants.

For example, older renters will likely prioritize ease of access and mobility in their desire to age in place, making properties with amenities like elevators, ramps, and bathroom safety rails more desirable. As a result, property managers may need to make adjustments in communication, advertising, and convenience to appeal to a diverse range of tenants across different generations. Services that cater to households with members of various ages will be in high demand among renters of all ages, including baby boomers.

Trend #6: The Rise in Mortgage Interest Rates

The Federal Reserve‘s decision to raise interest rates for the fourth time in 2022, reaching a total of 7% by the end of the year, has significantly impacted the housing market.

Housing rental market trends - Rise in Mortgage Interest Rates

With the potential for rates to reach 9% by 2023, as predicted by the NASDAQ, many potential homeowners are now choosing to continue renting.

Property managers should stay informed on the Federal Reserve’s actions and monitor how mortgage rates may affect occupancy rates in the future.

 Trend #7: Rent Negotiations Might Be Challenging

Many renters need help to keep up with rising living costs due to inflation in American households. To save money, some renters choose to relocate to a cheaper unit while others attempt to negotiate with their current landlords for a reduction in rent. However, our poll results reveal that these efforts are only sometimes successful.

Only 34.7% of renters surveyed said they had attempted to negotiate with their landlords, and of those, only 6.3% were successful. Many renters may not have the tools or strategies for successful negotiation.

One reason for the low success rate may be that landlords need to be open to negotiating. Our poll results show that only 14.4% of landlords are inclined to negotiate with new tenants, and only 2.6% are very likely to do so. Even with returning tenants, the success rate could be higher, with only 17.5% of landlords inclined to negotiate and only 4.4% likely to do so.

However, it is worth noting that long-term tenants, who have been in the same rental for several years, have a stronger negotiating position. Half of the landlords polled (50.6%) said they are more willing to deal with long-term tenants renewing their leases.

Additionally, tenants may be hesitant to negotiate because of the situation’s awkwardness. To increase your chances of success, it is essential to understand the negotiation process and to approach the conversation with your landlord with a clear and specific plan. While it does not guarantee a positive outcome, understanding the negotiation process can increase your chances of success in the coming year.

Trend #8: Landlords Will Look to Buy Instead of Selling

According to a recent survey, 80% of landlords have seen an increase in ownership costs over the past year, with 46% reporting a rise of more than 10% due to the current economic climate. As a result, many landlords are considering raising rents to offset these costs.

Nearly half (47.6%) of those surveyed expressed their intention to raise rents by at least 10%. However, 38% of landlords intend to raise rents, but most of these increases will be less than 5%. Despite rising property prices, 28% of respondents (an increase from 23.4% in July) are still looking to purchase one or more homes in the coming year.

Landlords remain optimistic about the rental market as it tends to be more stable and less volatile than the stock market. Only 8.3% of landlords surveyed had any intention of selling any rental properties within the next year, a decrease from 11.2% in April 2022.

Trend #9: Increase in Fractional Rental Property Investment

Recent technological advancements have led to a significant development in real estate investing – fractional ownership. Thanks to crowdfunding platforms like Fundrise, Realty Mogul, and Crowdstreet, individual investors can now invest in various properties, including residential, commercial, and industrial properties.

One of the significant benefits of fractional investment is the low barrier to entry and minimal maintenance required. As technology continues to evolve in the real estate sector, fractional investing is expected to become even more popular in the coming years.

Fluctuating Mortgage Rates – What Does That Mean for Homebuyers?

Constantly fluctuating mortgage rates can significantly impact home buyers’ borrowing costs. When mortgage rates rise, it can be more expensive for borrowers to take out a home loan, making it more difficult to afford a home.

On the other hand, when mortgage rates fall, it can make it less expensive for borrowers to take out a home loan, making it easier to afford a home.

Homebuyers must keep an eye on mortgage rates and understand how they might impact their ability to afford a home.

If you are a homebuyer looking to take the plunge into homeownership, you may have noticed that mortgage rates have been fluctuating recently.

But what does this mean for you and your homebuying journey? This blog will explore the ins and outs of fluctuating mortgage rates and what it means for homebuyers like you.

State of Mortgage Rates Throughout Last Year

The state of mortgage rates throughout last year was in a state of flux. Throughout the year, rates fluctuated significantly, causing great uncertainty for potential homebuyers and homeowners looking to refinance their mortgages.

At the beginning of 2022, rates were relatively low but steadily increased throughout the year. However, rates have decreased in recent weeks due to the current economic climate. But again, there has been a recent uptick in mortgage rates this week.

Fluctuating Mortgage Rates

Bankrate’s weekly survey of major lenders found that the average 30-year mortgage rate increased from 6.51 percent to 6.63 percent in the previous week.

It is concerning to see the average 30-year mortgage rate increase in the previous week. This increase, combined with the announcement from Federal Reserve Chair Janet Yellen that interest rates will increase by another half a percentage point, could make it more difficult for people to afford mortgages and potentially impact the housing market.

Despite the uptick in rates, demand for home purchases remained high throughout the year. The low rates and increased demand led to a tight housing market, with homes selling quickly and often for above the asking price.

Overall, last year’s mortgage rate fluctuations demonstrated the importance of staying informed about the current state of the market and being ready to act when opportunities arise.

It will also be necessary for the government to consider measures to help stabilize mortgage rates and ensure that housing remains accessible.

With rates expected to rise in the coming year, now may be the perfect time to move on to a new home or refinance your existing mortgage.

What Do These Fluctuations in Mortgage Rates Mean for Homebuyers?

Mortgage rates significantly determine how much money you will have available to buy a home. A change in mortgage rates, even a small one, can impact your budget and affect your ability to afford the home you want.

For example, according to the National Association of Realtors, the median home price in the United States is currently $379,100.

If you have decided to spend $400,000 on a home and are trying to keep your monthly payment at around $2,500-$2,600 or less, a change in mortgage rates can affect your spending power. It is because it will affect the amount of money you need to borrow and the interest you will pay on that borrowing.

What Do These Fluctuating Mortgage Rates Mean for Homebuyers

If mortgage rates go up, you will need to borrow more or pay a higher interest rate, increasing your monthly payment. And, if mortgage rates go down, you can borrow less money or yield a lower interest rate, which will decrease your monthly income.

Therefore, a change in mortgage rates can impact your spending power by changing the amount of money you can afford to borrow and the amount you will need to pay each month.

Furthermore, mortgage rate fluctuations can significantly impact the desirability of purchasing a home for homebuyers. Here are a few potential effects:

  1. Fluctuations in mortgage rates can affect the demand for homes. If rates are low, there may be more demand for homes as more people can afford to buy. On the other hand, if rates are high, demand may drop as people struggle to afford the cost of borrowing.
  2. Changes in mortgage rates can also affect the value of homes. If rates are low, it may make homes more valuable as more people can afford to buy. If rates are high, it may decrease the value of homes as demand decreases.

Overall, fluctuations in mortgage rates can have significant impacts on the affordability and desirability of purchasing a home for homebuyers. Homebuyers need to pay attention to mortgage rates and consider their budget and financial goals when deciding whether or not to buy a home.

Where Are the Mortgage Rates Headed In 2023?

Mortgage experts anticipate that mortgage rates will decrease in the coming year due to the slowing economy. Lawrence Yun, the Chief Economist at the National Association of Realtors, has predicted that rates will reach 5.5% by the middle of 2023.

Even though Yun believes that the Federal Reserve will increase rates twice more, he notes that the 10-year Treasury has already considered this information.

In 2022, the average American family had a median income of $90,000 per year or $7,500 per month. The median price of an existing home in November of that year was $370,700, requiring a down payment of $74,140 (20% of the total cost).

Where Are the Mortgage Rates Headed In 2023

With a mortgage payment of $1,900 per month at a 6.63% interest rate, the average family would pay 25% of their monthly income towards their mortgage, a significant increase from the previous year.

In the previous year, the average mortgage rate was 3.13%, and the median home price was $364,600, requiring a down payment of $73,920 and a mortgage payment of $1,600 per month at the same interest rate. The average family only spent 19% of their monthly salary on their mortgage in the previous year.

Overall, it is difficult to predict precisely where mortgage rates will be in 2023, as various factors influence them, including economic conditions, inflation, and monetary policy.

It is essential to remember that mortgage rates can fluctuate significantly over time and can be affected by unexpected events, so it is always a good idea to stay informed and make decisions based on your financial situation.

What Do Rising Mortgage Rates Mean for Homebuyers?

Mortgage rates are the interest rates that lenders charge for home loans. Various factors, including the demand for mortgages, the availability of credit, and the overall state of the economy, determine these rates.

When the demand for mortgages is high, and the supply of credit is limited, mortgage rates tend to rise. On the other hand, when demand is low, and credit is more readily available, mortgage rates tend to fall.

The Impact of Rising Mortgage Rates on Homebuyers

When mortgage rates rise, it can be more expensive for homebuyers to finance a home purchase. It is because a higher interest rate means that borrowers will pay more in interest over the life of the loan. For example, if you take out a 30-year mortgage with a 4% interest rate, you’ll pay around $143,000 in interest over the life of the loan. However, if the interest rate increases to 5%, you’ll pay about $172,000 in interest over the same period. That’s a difference of almost $30,000, which can significantly impact your monthly budget.

What Can You Do as a Homebuyer?

If you’re in the market for a new home and are worried about rising mortgage rates, you can take a few steps to minimize the impact on your budget. Here are some tips:

1.    Lock In a Rate

If you’re ready to buy a home and you’ve found a mortgage rate you’re happy with, consider locking in that rate. It means you’ll agree to a specific interest rate for a period, even if mortgage rates rise. It can help protect you from rising rates and ensure you get the most affordable mortgage possible.

2.    Shop Around

Feel free to shop around and compare mortgage rates from different lenders. You might be surprised at the differences in rates offered by other lenders, and comparing rates can help you find the best deal.

3.    Consider A Shorter-Term Mortgage

If you’re worried about rising rates, consider opting for a shorter-term mortgage, such as a 15-year loan, instead of a 30-year loan. While these loans often come with higher monthly payments, they also come with lower interest rates, saving you money in the long run.

4.    Look For Government Programs

If you’re a first-time homebuyer or meet specific income requirements, you may be eligible for government programs offering lower mortgage rates or down payment assistance. These programs can help to make homeownership more affordable, even in a market with rising rates.

What Does Rising Mortgage Rates Mean for Sellers?

If mortgage rates continue to rise, it could decrease the number of buyers who can afford your home. It could lead to a slower turnaround time for your property and lower offers from potential buyers.

Fluctuating Mortgage Rates - importance for sellers

However, it’s essential to remember that other factors are also at play in the housing market. For example, if demand for homes in your area is high and there is a shortage of available properties, this could offset the impact of rising mortgage rates. Additionally, if you’re selling in a high-priced market, buyers may be more willing to absorb a higher mortgage rate’s additional cost to secure the home of their dreams.

As a seller, it’s essential to stay informed about the state of the housing market and how it may impact the sale of your home. It can help you make informed pricing decisions and negotiate with potential buyers. It’s also a good idea to work with a real estate agent who can provide valuable insights and guidance throughout the process.

Ultimately, rising mortgage rates may present some challenges for sellers, but with the right strategy and guidance, you can still successfully sell your home and get the price you deserve.

What About the Value of Property Amidst Fluctuating Mortgage Rates?

The value of the property can be affected by fluctuating mortgage rates in several ways:

  1. If mortgage rates rise, it may become more expensive for potential buyers to afford a home, which can negatively impact the property’s value.
  2. Conversely, if mortgage rates fall, it becomes more affordable for potential buyers to purchase a home, increasing the property’s value.
  3. If mortgage rates rise, it may also lead to a slowdown in the housing market as fewer people can afford to buy a home. It can lead to a decrease in demand for homes, ultimately reducing the property’s value.
  4. On the other hand, if mortgage rates fall, it may increase demand for homes as more people can afford to purchase them. It could lead to an increase in the value of the property.

What About Real Estate Investing Amidst Fluctuating Mortgage Rates?

Real estate investing amidst fluctuating mortgage rates can be a challenge, as changes in rates can significantly impact the affordability of properties for both investors and potential buyers. However, there are a few strategies that investors can consider to mitigate the effects of fluctuating mortgage rates:

1.    Look For Properties with Long-Term Stability

Investing in properties expected to appreciate over the long term can help offset any short-term fluctuations in mortgage rates.

2.    Consider Adjustable-Rate Mortgages

Adjustable-rate mortgages (ARMs) can offer lower initial rates, which can be beneficial if rates are expected to rise.

3.    Diversify Your Portfolio

Spread your investments across multiple property types and locations rather than relying on a single property or market. It can reduce the impact of any changes in mortgage rates on your portfolio.

4.    Keep An Eye on The Market

Stay up-to-date on mortgage rate trends and changes in the real estate market to make informed decisions about when to buy or sell properties.

The Bottom Line

In conclusion, fluctuating mortgage rates can positively and negatively impact homebuyers. On the one hand, fluctuating rates may present opportunities for buyers to secure lower rates if they can act quickly.

On the other hand, fluctuating rates can also create uncertainty and make it harder for buyers to budget and plan for their home purchases. It is important for homebuyers to stay informed about current mortgage rates and to work closely with a lender to determine the best strategy for securing a mortgage.

Regardless of the ups and downs of mortgage rates, it is ultimately essential for buyers to carefully consider their financial situation and make a responsible decision that aligns with their long-term goals.