1. New York
The balance of power has shifted to buyers in New York City as both sales and prices of condos fell sharply in the third quarter of 2019. The median sales price has dropped 8.2% in the last year. As properties sit on the market for longer stretches of time, sellers lower their prices in hopes of selling.
This doesn’t mean the city is necessarily any cheaper for residents — New York is still home to 28 of the top 50 most expensive ZIP codes in the U.S. With no shortage of buyers in Manhattan, however, deals will continue to close as sellers become more willing to lower prices.
If you're looking to buy and hold on to your investment for a few years, now is the perfect time to take advantage of these lower prices. If you're looking to sell, it may be smart to hold onto your property and wait for the market to shift in your favor.
2. Los Angeles
The Los Angeles real estate market is a bustling hotbed of activity for both buyers and sellers. Home values have never been higher, yet the buyer demand remains even as prices continue to increase. The median rent in the city is $3,607 and rates are expected to grow. Forecasts predict the median home value in L.A. will increase 2.5% in the coming year.
An implicit lack of housing will continue to boost home value, meaning more people will rent. As they do, rent rates will increases to match demand, making buy and hold strategies very appealing. So, if you're looking to invest in the L.A. real estate market, consider doing so soon.
Buying a home or rental property now could result in years of appreciation if the predicted market forecast comes to fruition.
3. Chicago
Now is the perfect time to both sell and buy in this bustling city. Overall, home prices remain high and inventory is on an upward trend. Additionally, mortgage rates are nearing historic lows. What does this mean for investors?
The mid-range housing market is becoming increasingly competitive as buyers are choosing these homes over high-end luxury homes. However, sale prices on large houses that have been on the market for months — even years — are starting to attract buyers.
This trend signals stability and spells balance for the market's future. Property owners should feel a boost in confidence after Chicago's intimidating bidding-wars of recent years.
4. Houston
A lack of demand for higher-end homes is taking a toll on Houston's housing market. A growing number of homes are selling slower, for less than their listed price. This dip in the real estate market appears to be driven by prices rising more quickly than investors can afford.
A depreciating market won't impact all properties the same, however. Prices of mid-range homes are on the rise, while softening is more obvious at the luxury end of the market. That being said, the market's future is uncertain. While massive foreclosures are unlikely, property appreciation may come to a halt and selling could become increasingly difficult.
5. Phoenix
Investors and buyers in the Phoenix area are competing for limited inventory. The city's housing market proves to be one of the tightest in the nation since population growth has prompted an increasingly high demand for homes. New residents have moved to the area in hopes of escaping more expensive markets. But, there's simply not enough supply in the face of this demand.
Many investors are worried about a housing market crash, but these concerns are currently unwarranted. Home prices in the Phoenix area are likely to increase into 2020 and then rise more slowly throughout the year. Then, affordability issues will begin to creep in, which could decrease demand. That being said, it's still very much a seller's market in Phoenix.
6. Philadelphia
In some parts of Philadelphia, the housing market is as fruitful and busy as ever. Housing prices are still growing, having risen nearly 46% in the past seven years. The population has increased and thousands of vacant units have disappeared.
This unprecedented growth has become an essential part of Philly's economy and urged many to move to Philly before prices increase even further. The economy is supported by opportunities in government, health, construction, and a dozen Fortune 500 companies. There’s a great balance between job growth and real estate prices for new residents.
The rapid increase in prices may be, in part, due to a decreasing supply of housing, just like in L.A. However, were a recession to come, experts say Philly is in a strong position to weather it. The city and its suburbs' markets tend to be dependable, meaning prices don't rise as high as other metro areas during boom times. Likewise, prices wouldn't drop as low during a recession.
Navigating Real Estate Trends in the Six Biggest U.S. Cities
A well-informed property owner is better able to set themselves up for success. So, whether you're buying or selling, it's important to know what you're getting yourself into first.
Research trends in your city of interest and stay up-to-date on changes in the housing market and economy. Doing so will ensure you make a wise investment at the most opportune time.
Holly Welles is a real estate blogger covering design, finance and market trends for apartment dwellers. You can find more of her work on her blog, The Estate Update.
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