With home values up around 1.0 percent in the past year and mortgage rates having continued to increase, the personal-finance website WalletHub recently released its report on 2023’s Best Real-Estate Markets, as well as expert commentary.
To determine the most attractive real-estate markets in the U.S., WalletHub compared 300 cities across 17 key metrics. The data set ranges from median home-price appreciation to job growth.
Best Real-Estate Markets were rated, one through 10, as: McKinney, TX in first place, followed by Frisco, TX; Nashville, TN; Denton, TX; Cary, NC; Allen, TX; Durham, NC: Austin, TX; Port St. Lucie, FL; and, at number 10, Gilbert, AZ. Santa Clara, CA just missed the top 10, coming in at number 11 on the list.
Worst Real-Estate Markets, the bottom 10, included St. Louis, MO at number 291, followed by Philadelphia, PA; Hartford, CT; Cleveland, OH; Peoria, IL; Portsmouth, VA; Baton Rouge, LA; Shreveport, LA; New Orleans, LA; and at number 300, Baltimore, MD.
Best vs. Worst
Miami, Hialeah, Miami Gardens and Miami Beach, Florida, have the lowest share of seriously underwater mortgages, 0.71 percent, which is 20.6 times lower than in St. Louis, the city with the highest at 14.63 percent.
South Gate, California, has the lowest vacancy rate, 2.02 percent, which is 17.4 times lower than in Miami Beach, Florida, the city with the highest at 35.24 percent.
Flint, Michigan, has the lowest home price as a share of income, 108.16 percent, which is 13.7 times lower than in Santa Monica, California, the city with the highest at 1,486.77 percent.
Warren, Michigan, has the fewest median days on the market, 28, which are 5.2 fewer than in Yonkers, New York, the city with the most at 146.
To view the full report, visit: https://wallethub.com/edu/best-real-estate-markets/14889
Expert Commentary
Is now a good time to buy? What economic indicators should potential buyers be watching?
“Yes, in most parts of the country, now is a good time to buy because sellers are willing to negotiate on price and terms. Although many people pay attention to interest rates (which are substantially higher today than they were 12 or 18 months ago), I would advise buyers to pay more attention to job growth rates and unemployment rates within their metro area. In most parts of the country, small and mid-size employers are hiring and growing, which means the local economies are strong and local markets are stable.”
Kelly Snider – Professor; Director of the Certificate in Real Estate Development Program (CRED), San Jose State University
“It’s my opinion that if you are buying a home for personal use, feel secure in your current job, and are buying within your means, then timing is not very important. A home buyer should always think about whether they can afford the mortgage + insurance + taxes and if they lose their job, they have sufficient savings or alternate sources until they find another job. If you are buying an investment property, I would certainly wait as the cost of borrowing is quite high and there is limited upside in appreciation as well as rent growth. Besides interest rates and local economic conditions, I would track the ‘number of days’ a property stays on the market and the current ‘inventory on sale’ vs. the past to determine whether you have some leverage as a buyer. I believe that fall and winter are the best times to buy a home due to limited competition. But be pragmatic about your offer. If the seller is an investor, he or she might be less emotional compared to a homeowner.”
Nikhil Shah – Adjunct Professor, Rice University
Why are Millennials still sitting out of the housing market? What can be done to increase homeownership rates for this cohort?
“Many millennials are sitting out of the current housing market as a result of not being able to afford or qualify for the property that meets their needs in terms of size, amenities, and location. As such, many are choosing to rent. Home affordability will continue to put pressure on home ownership.”
Bennie D Waller, Ph.D. – Faculty Fellow, Department of Economics, Finance, and Legal Studies, The University of Alabama
“They are sitting out because their jobs do not pay enough for them to afford a house; it is simple. The best solution would be for Fannie and Freddie (along with HUD) to make long-term low-interest loans for ADU construction and for states to allow second units to be built and sold like condominiums. That way Gramma and Grampa can build a second unit in their (overgrown and neglected) backyard, which they can move into, and the ‘main house’ can be sold to their grandkids to raise the next generation. Adding infill and missing middle housing on existing residential lots is definitely the cheapest, fastest, and most desirable way to create more low-cost housing for young families.”
Kelly Snider – Professor; Director of the Certificate in Real Estate Development Program (CRED), San Jose State University
What trends are impacting the housing market in 2023? Will it crash or boom?
“I believe that rising interest rates will drive out the ‘speculators,’ and there will be more choices available to prospective homeowners. Lower construction and labor costs and less restrictive development laws may help increase new supply. Compared to the 2008 Financial Crisis, the banks did not make aggressive home loans, existing homeowners refinanced their mortgages at record low interest rates, and housing was undersupplied, so there are less chances of a crash, at least I hope so.”
Nikhil Shah – Adjunct Professor, Rice University
