Buying a home in the current real estate market in the US is still an adventure, so buyers will have to look forBest cities for investmentinstead of choosing the ones with the best prices.
2023 started with conditions that remain challenging for homebuyers in the country, with mortgage rates close to 6% and high pricesmany Americans are still unable to buy anything.
However, if one of your goals this year is buying a home, it might be time to think about whether you want good prices in markets with a bleak future or investment that can pay off in the long run.
Redfin Chief Economist Daryl Fairweather provided an example of this when discussing what is currently happening in the El Paso, Texas and Detroit, Michigan markets in a report from FoxBusiness.
Both of them are currently the most available markets to enter the market in 2023.; however, they may not be the best investment for the buyer.
This is due to the uncertain conditions in the economy and the volatility of the housing market, which led to a sharp drop in home sales in November last year. 35% less than last year.
What markets are not worth investing in?
The chief economist at Redfin has a very clear picture of the scenario if you look for it rather than just buy a house at a good pricebut do so in a favorable investment landscape.
“If you want to avoid the situation where you buy a house, then its value will drop in the coming monthsI would avoid the Sunbelt,” Fairweather said.
The expert added that he would not invest his money in homes in Austin, Texas, Phoenix, Arizona, or Las Vegas, Nevadaas they are all markets that are expected to fall in prices in the coming months.
This may seem counterintuitive if you think that buyers are always looking for the lowest prices; For investors, however, falling prices will only mean a loss of the money they spent on the house.
A recent Redfin report addressed this issue, warning homebuyers that there is a risk in such markets that the value of the house will be less than what was received as a mortgage.
Prices in markets located in the so-called Sun Belt will continue to fall, with mortgage rates expected to be between 5% and 6% by the end of 2023, according to Fairweather.
But it’s not all bad news for buyers looking in this part of the country, because prices in those markets will bounce back as demand remains strong, according to Redfin’s expert.
Where is it convenient to invest
In the opposite scenario, Fairweather recommends that if you want to invest in a home, it’s time to do so. in Midwest and Northeast marketsbecause these are areas where houses tend to maintain their prices.
As long-term mortgage rates remain high, Lake, IL; Albany, New York; New Haven, Connecticut; Milwaukee; and Chicago, according to Fairweather.
Source: La Opinion
Alfred Hart is an accomplished journalist known for his expert analysis and commentary on global affairs. He currently works as a writer at 24 news breaker, where he provides readers with in-depth coverage of the most pressing issues affecting the world today. With a keen insight and a deep understanding of international politics and economics, Alfred’s writing is a must-read for anyone seeking a deeper understanding of the world we live in.