June 18, 2021
If you're wondering how hot the real estate market is, two indicators are the number of days on the market and if homes are selling above the asking price. Of course, the market will be different from state to state and city to city, but those indicators will show the market's temperature. Read on to discover where to consider buying your next home or rental property. And what locations you have a better chance of building equity fast.
Why is the real estate market so hot?
Let's start with what's driving the market. In the first part of 2021, real estate continues to do well. In many areas, homes are selling like hotcakes. Even with the pandemic, people were still shopping and buying. Why is the market so hot? Here are three reasons:
- Low-interest rates
- Pent up demand
- Low inventory
Those three points make a seller's market.
Where is the real estate market hot?
Three states that continue to stay on the top of the list are Texas, Florida, and California. Let's take a look at which cities are doing the best.
Texas — The Lone Star State Isn't Lonely
One of the top spots for the fastest-growing states is Texas. Per the 2020 Census, the population grew 15.9% compared to the 2010 Census. Texas is popular with both citizens and businesses because there's no state income tax.
- One of the hottest real estate markets is Austin with its vibrant music scene and booming high-tech industry. The city has an average home value of $498,786.
- Less than 30 minutes away is Round Rock. Homes are more affordable, with an average value of $386,321, according to Zillow.
- San Antonio's average home value is around $208,137. And if you're moving from high-priced states like California, you'll be amazed at what your money can buy. Homeowners enjoy beautiful brick exteriors, gourmet kitchens, and impressive fireplaces.
- Family-friendly New Braunfels is another hot market with an average home value of $298,177. About 40 minutes away from San Antonio, the city is known for its Guadalupe and Comal rivers.
Florida's Real Estate Market is Hot!
For many in New York, New Jersey, and even Canada, Florida has been considered the place to go during their cold winters. These winter visitors are affectionally called "snowbirds." As a result, Florida is growing like never before. Although it's not growing as fast as Texas, the 2020 Census showed a population increase of 14.6% over the 2010 Census.
- Jacksonville is the largest state in Florida and draws tourists and residents alike to its 850 square miles of beautiful beaches. This family-friendly city is also a haven for artists. The median home value is affordable at $221,260 per Zillow.
- Tampa, St. Pete, and Clearwater are three cities that are seeing incredible growth. Finding a nice single-family home to rent is difficult. And the price of homes is rising. Median home prices are Tampa $329,900; St Petersburg $267,688; Clearwater $261,688; and Orlando $281,598.
Although homes are still affordable compared to other large cities across the country, prices keep climbing, and sellers are receiving multiple offers.
California Real Estate Market
Just like in many states, California is dealing with a lack of supply. That alone drives prices up. Many sellers are receiving multiple offers, and their homes are selling above their asking price. If you're selling your home and rebuying — that can be challenging. On the other hand, if you're an investor looking for your next rental — here are some top places to consider investing in.
- Vallejo and Fairfield area, listed as the hottest market in California, is popular because of its proximity to San Francisco. And it's only two hours from Silicon Valley. Many Bay Area employees who can now work remotely are flocking to Vallejo and Fairfield.
- Yuba City, Stockton, and Lodi is another area that's seeing record sales. These towns are close to the state capital Sacramento which is a significant employment hub. Although prices are lower than in some parts of the state, they are increasing in the current seller's market.
- Sacramento and Roseville are two more appealing cities. Homebuyers love tree-lined streets, lots of shopping, and employment opportunities. This central location is within two hours of both San Francisco and scenic Lake Tahoe.
How to find hot real estate markets?
Go to any area you're considering buying in and look at the median days on the market and the number of views per listing. Fewer days on the market and lots of views show higher interest and a vibrant market. Talk to local real estate agents who specialize in the areas you're considering and get more specific information.
Another way to find a good market if you're looking for a rental is to see where major employers are moving to. Those cities could be a great place to check out buying an investment property. For example, Austin, TX is a high-tech destination. Investing in single-family rentals could be a smart financial choice.
According to CNBC, the five cities with the most job opportunities in 2021 were:
- Columbia, SC: The main industries include healthcare, insurance, technology, transportation, R&D.
- Salt Lake City, UT: The main industries include education services, health care, retail, mining.
- Charleston, SC: The main industries include aerospace, automotive, defense, tech, life science, logistics.
- South Burlington, VT: The main industries include educational services, health care, social assistance.
- St. Louis, MO: The main industries include aviation, biotechnology, food and beverage manufacturing.
Whether you're buying a home to live in or as a rental, now is a great time. With the high demand and low supply, make sure to be prepared and be prequalified by your lender. That way, when the perfect property comes along, you'll be ready.
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