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Report: Rising Prices Do Not Preclude Investor Income

As home prices rise across the nation with some markets charting double-digit increases, many markets still offer attractive opportunities for investors in single-family homes, according to ""HomeVestors of America"":http://www.webuyuglyhouses.net/?refid=7&utm_campaign=2400&utm_term=8503807&utm_medium=google&utm_source=trada&utm_content=7268128536_35305985016 and ""Local Market Monitor."":http://www.localmarketmonitor.com/ Together, the two companies released their quarterly ""Best Market Ratings"":http://www.prnewswire.com/news-releases/despite-rising-home-prices-there-is-still-opportunity-for-investors-in-single-family-homes-210447901.html report Thursday.

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The report labels markets as ""dangerous,"" ""speculative,"" ""medium risk,"" and ""low risk.""

The highest concentration of ""low risk"" markets are located in California, where 14 markets earned the label. Texas followed with 12 ""low risk"" markets, and Florida ranked third with 11 ""low risk"" markets.

However, ""[n]ot all low risk markets are equal,"" said Ingo Winzer, president and founder of Local Market Monitor. ""When you factor in job growth and unemployment, it's clear that some markets like Texas have better long-term potential than a market like Florida.""

While home to the most ""low risk"" markets of any state, California is also home to five of the 11 markets where [COLUMN_BREAK]

prices are now above their Equilibrium Home Price (EHP), meaning homes are over-priced compared to local income.

The Los Angeles-Long Beach-Glendale market was most overpriced, according to the HomeVestors/Local Market Monitor report. Home prices in the Los Angeles metro are about 19 percent higher than the market's EHP.

While a high EHP may appear as a deterrent for investors, Winzer says ""[m]arkets with a positive EHP can still provide strong rental returns for investors"" because ""most of those markets have strong population and job growth which provides upward pressure on rents.""

Winzer points to the San Jose market as one such market. ""Although the EHP is six percent, strong population growth provides a good source of renters, making it a 'low risk' market according to our data,"" he said.

Thirteen of the top 100 markets in the nation fell into the ""speculative"" category. Many of these markets have high unemployment levels, but this negative characteristic is dampened by low EHPs, population growth, or attractive rental markets, according to David Hicks, co-president of HomeVestors of America.

All 13 ""speculative"" markets are located in the Northeast and Midwest.

Providence, Rhode Island, was the only market labeled ""dangerous"" in the report.

HomeVestors of America, based in Dallas, Texas, and commonly known as the ""We Buy Ugly Houses"" company purchases and renovates residential properties across the country. Local Market Monitor is a national real estate forecasting solution.

About Author: Krista Franks Brock

Krista Franks Brock is a professional writer and editor who has covered the mortgage banking and default servicing sectors since 2011. Previously, she served as managing editor of DS News and Southern Distinction, a regional lifestyle publication. Her work has appeared in a variety of print and online publications, including Consumers Digest, Dallas Style and Design, DS News and DSNews.com, MReport and theMReport.com. She holds degrees in journalism and art from the University of Georgia.
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