5 Cities Where Real Estate Investors Are Making the Housing Market Better
Written by
Vance Cariaga
Edited by
Nicholas Morine
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The 2024 U.S. housing market continues to pose challenges for home buyers, who face high prices, low inventory and the highest mortgage rates in a decade-and-a-half. But there could be hope in the form of real estate investors — at least in some cities.
First, the bad news for house hunters: The average 30-year fixed-rate mortgage in the U.S. stood at 6.6% as of Jan. 18, 2024, according to the Federal Reserve. Although rates have inched lower in recent months, they’re still at their highest point since 2007.
Meanwhile, U.S. home prices in December 2023 rose 4% from the previous year to a median of $403,714, Redfin reported. On average, the number of homes sold was down 8.8% year-over-year, and the inventory of homes for sale remains stagnant.
Study Indicates Smaller Investors Are Putting Homes Back Into the Market
Despite these headwinds for buyers, residential real estate investors and consumers “are feeling optimistic” about the housing market in early 2024, according to a recent report from New Western, a real estate investment marketplace for more than 200,000 investors.
The report, titled “Residential Real Estate Investing Trends for 2024,” analyzed New Western sales data as well as surveys of 1,280 real estate investors conducted last fall.
The analysis found that most current real estate investors are “solopreneurs” or local small businesses who are more adept at fixing and flipping homes than larger institutional investors. This ability to produce quick turnover could lead to more homes on the market in the coming months. New Western also found that 80% of investors are buying one to five properties a year to rehab and flip or rent.
This bodes well for home buyers in certain U.S. markets, according to Kurt Carlton, co-founder and president of New Western.
“As we enter the new year with continued low inventory, local investors are providing solutions to the shortage as consumers look for housing options,” Carlton said in a press release. “Many of the investors we work with at New Western are taking uninhabitable homes, fixing them and making them livable again. These investors are fueled by the opportunity to capitalize while delivering much-needed residential properties back to the market.”
Here are five markets where New Western saw a recent uptick in investor activity along with a decline in traditional home sales:
1. Houston, Texas: Investor activity up 32% from the first half of 2023 to the second half; traditional home sales down 31%
2. Raleigh, North Carolina: Investor activity up 27% from the first half of 2023 to the second half; traditional home sales down 35%
3. Atlanta, Georgia: Investor activity up 23% from the first half of 2023 to the second half; traditional home sales down 33%
4. Denver, Colorado: Investor activity up 14% from the first half of 2023 to the second half; traditional home sales down 32%
5. Austin, Texas: Investor activity up 12% from the first half of 2023 to the second half; traditional home sales down33%
Rising investor activity could boost the inventory of new properties for sale once investors get homes rehabbed and ready to put on the market. As New Western noted, investors are mainly buying vacant homes in active markets, “creating more affordable inventory and adding new stock to the market.”
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