Who would have thought Idado would be a place where the housing market would skyrocket? Crazy things happen when the world is hit with a global pandemic. Over the past year, we have seen an increase in people leaving big cities and moving to suburban communities. According to KTVB.com Boise Idaho continues to be one of the hottest markets in the West with the median home price surging 72% in four years. If anything, the COVID-19 pandemic exacerbated the area’s housing woes, with more people lured here from major metro areas, such as San Francisco, as people sought more affordable remote-work housing and an outdoor-centric work-life balance. As cited on noradarealestate.com the median home price in the Boise metro area exceeds $500,000 for the first time in May 2021 and according to the latest report released by Boise Regional Realtors, Ada County’s median sales price set a new high of $523,250, up 8.7% compared to April’s price of $481,208. 

Idaho is one of the fastest-growing states in the U.S. and has seen a huge number of new residents migrating from other states around the country. Historically, Idaho has a relatively low cost of living which is a primary reason many are flocking there. As reported by Idahostatesman.com, not only are homes selling for more, they’re selling in record time, “Boise is relatively more affordable,” she said. “It’s got a similarly dry, sunny, arid climate. The developing tech industry and more people being able to work remotely have also drawn people in.” Boise has a lot to offer. It is part of the beautiful Pacific Northwest region, and Idaho’s capital city offers a low cost of living, a host of fun outdoor activities, and a lively arts and culture scene. As witnessed over this past year, markets with an extensive outdoor list of activities are attractive to home buyers.

Sharestates views this market as an opportunity and has forged relationships with borrowers and developers in Boise. Check out some of our recently funded properties.

This investment is for a private loan on a residential portfolio (2 units) property located in Meridian, ID. The Borrower is acquiring the subject property for investment purposes solely. The property is currently occupied and the Borrower will continue to lease out space.

Before:

After:

  • Loan amount – $227,000
  • Loan Purpose – Bridge 
  • Property Type – Residential
  • LTV – 71%

This investment is for a private loan on a portfolio (2 units) property in  Boise, ID. The Borrower is refinancing into a 30-year note to pull additional equity from the stabilized property and to achieve a favorable interest rate.

  • Loan amount – $337,000
  • Loan Purpose – Cash-out 
  • Property Type – Residential
  • LTV – 75%

 

To learn more about Sharestates or inquire about funding your next real estate project please click below.

What do most people think of when they think of South Florida? First off, there’s the weather. In south Florida, it’s typically warm year-round with average temperatures between 74-77 degrees, which makes it a wonderful place for people who love being outdoors. According to CBS Local Miami news, South Florida has seen a crush on new buyers during the pandemic. So much so, it has created a seller’s market with many getting top dollar for their properties. People from the Northeast in high-tax areas are prime targets to make South Florida their new home. The new tech scene and cybersecurity scene in South Florida are also attracting young people to consider a move to South Florida. There’s an influx of European and South American buyers. According to CBS Local  Miami news, they’re all competing with local buyers who are moving from urban high rises to the suburbs.

As reported by Forbes, with an open economy, fewer masking requirements, relatively low COVID-19 case counts, a booming remote work scene, stable politics, and no state income tax, it would be easy to think that South Florida’s recent real estate boom could have been predicted. Like everything over the course of the pandemic, it all happened so fast. South Florida realtors and developers also have learned to be leery of the bubbles since they know what it’s like on the other side. Also cited by Forbes, South Florida’s real estate resurgence has all the signs of a boom that’s here to stay for a while as the country’s other major metropolises like Manhattan and San Francisco struggle with long-term re-pricing in the other direction.

With the real estate market on the rise in South Florida, Sharestates has seen more interest in real estate loans in the sunshine state. For example, Sharestates recently funded property in Boca Raton, FL. Boca Raton is a city on Florida’s southeast coast, known for its golf courses, parks, and beaches. With a multitude of amenities such as golf, tennis, racquetball, polo, swimming pools, spas, beaches, gyms, and restaurants, Boca Raton has been consistently highly ranked for fitness and leisure. Sharestates funded a private loan on a residential (1 unit) property. The borrower acquired the subject property as a “fix & flip”. Once rehab is complete, the borrower plans to sell the property. Here are some pictures of the property before and after renovation. 

Before Renovation: 

After Renovation:

  • Loan amount – $1,347,000
  • Loan Purpose – Construction 
  • Property Type – Residential
  • LTV – 70%
  • Rehab Budget – $1,245,380

Another property that Sharestates recently funded is located in North Miami Beach, FL. North Miami Beach is strategically located midway between Miami and Ft. Lauderdale International Airport. Sharestates funded a private loan on a multi-family unit. Check out some of the stunning before and after renovation pictures.

Before Renovation:

After Renovation:

  • Loan amount – $760,000
  • Loan Purpose – Bridge 
  • Property Type – Residential 
  • LTV – 80%

 

To learn more about Sharestates or inquire about funding your next real estate project please click below.

When people think of Newark, New Jersey it doesn’t often bring back sweet memories. The most populous city in the state of New Jersey is most often associated with urban blight following riots that occurred back in 1967. In the span of a few decades, New Jersey’s premier city went from an economic driver to a struggling urban area. Nonetheless, this city of over 280,000 continued to be one of the country’s major air, shipping, and rail hubs, and today with billions of dollars in development projects underway Newark is staging a comeback.

The Patch reports that despite the COVID pandemic, the ball is still rolling for several real estate projects in Newark neighborhoods that deserve a breath of fresh air. There are neighborhoods with high rates of foreclosures and many underwater properties worth less than what’s owed on them. There are also abandoned and deteriorated properties, vacant lots, and few affordable housing choices. Nonetheless, The New York Times reports that just fifteen miles from the heart of Manhattan, Newark’s downtown commercial district has successfully lured housing developers, a Nike factory store, a Whole Foods Market, and the corporate headquarters for Audible, Amazon’s audiobook and podcast service. The New York Times also reports that in the last five years, more than 3,500 units of affordable housing have been built or are underway, much of it outside downtown, city records show. Newark sold almost double the number of abandoned parcels at auction in 2020 as it did in 2019, and the average price of land — none of it downtown — was about 30 percent higher. Between 2015 and 2020, major crimes, including murder, robbery, and assault, plummeted by 40 percent. Once the governor made construction an essential business, developers did not hesitate to get back to business. Even during a pandemic, Newark pushed forward.

Newark has long been an area that Sharestates has viewed as ripe for growth and development, and the company has formed many strong relationships with developers in this market as a result. Over the past few months, we have funded developers dedicated to rehabbing the city of Newark one property at a time. 

Here are just a few projects that were recently completed or currently in the works. The first project was a Fix and Flip loan of a multifamily property. The Borrower acquired the property to add value by rehabilitation. Rehab is now complete, and the units are now being leased out to tenants. Upgrades to the property included new kitchens for all 6 units, bathroom remodels for all 6 units, a new HVAC system, paint throughout, and new flooring. Here are some before and after images of the completed project.

Before: Fix & Flip Loan

After: Fix & Flip Loan

  • Loan amount – $508,000
  • Loan Purpose – Construction 
  • Property Type – Multifamily 
  • LTV – 80%
  • Rehab Budget – $129,000

The next project we recently funded has a total of 20 units. Here are some images of the properties in the portfolio.

Rental Portfolio Loan Properties:

  • Loan amount – $2,577,000
  • Loan Purpose – Cash-out 
  • Property Type – Residential 
  • LTV – 70%

To learn more about Sharestates or inquire about funding your next real estate project please click below.

New Jersey happened to be one of the hardest-hit states early on during this pandemic, but since the governor of New Jersey declared real estate an essential business last year, Northern New Jersey has seen a lot of prospective buyers looking to move out of New York City for greener pastures across the Hudson.

Paterson specifically has struggled to retain its prominence as an important American city, despite having an array of largely untapped resources. Paterson is uniquely positioned to capitalize on several key assets, such as the glorious Great Falls of the Passaic River; the high concentration of beautiful beaux-arts buildings downtown, and its 13-mile proximity to New York City; as well as its rich history as the birthplace of the U.S. Industrial Revolution.

The Patch cited that both sellers and buyers can benefit from the current real estate environment. Buyers are able to stretch their budget with the benefit of record-low interest rates. Sellers, on the other hand, have an abundance of new buyers looking, a stabilizing local economy, and limited housing inventory available going into the spring 2021 market. 

Movers consider Paterson for its affordability and transportation infrastructure, including an NJ Transit Main Line commuter rail service to Hoboken located in Downtown Paterson. Sharestates has made many strong connections with real estate developers in Paterson over the past six years, and now that the real estate business is getting back to normal we have seen an uptick in lending in the Paterson area. According to Zillow, there are now 200+ homes for sale, ranging from $95K to $699K as of this article’s posting. Paterson has affordable housing stock compared to the greater metropolitan area with a diverse arrangement of multi-family, townhomes, condominiums, and single-family housing units available to buy, rehab, rent, refinance and repeat.

Here are some of our recently funded projects:

  • Loan amount – $2,000,000
  • Loan Purpose – Bridge 
  • Property Type – Residential 
  • LTV – 58%

  • Loan amount – $3,240,000
  • Loan Purpose – Cash-out 
  • Property Type – Land 
  • LTV – 65%

Experience Paterson living in a completely new and improved building will be a seven-story luxury housing complex built on the vacant lot that used to hold the Paterson Armory. This community is located on Market St in the Eastside area of Paterson. Prominent developer in Paterson broke ground on this 138-unit housing project in August 2020. Rents will run between $1800 – $2300 . According to The Paterson Times The New Paterson Armory will have on-site parking, amenities like a pool, gym, rooftop deck, and a first-floor restaurant. Also cited by The Paterson Times mounds of concrete and bricks from the old Paterson Armory were visible on the vacant lot on the corner of Market and Pennington Street. These are the materials that are from the historic armory itself, they’ll be integrated into the building. So that historic past, that legacy of the older days of Paterson, will be permanently enshrined in the future of the building itself.

  • Loan amount – $2,400,000
  • Loan Purpose – Bridge 
  • Property Type – Purchase 
  • LTV – 40%

To learn more about Sharestates or inquire about funding your next real estate project please click below.

Like many other industries, real estate has been turned upside down by the COVID-19 pandemic. Before the virus interrupted everyday life as we knew it, the Long Island housing market was operating at a pretty above-average rate. According to Libn, in 2019 a record $15.8 billion worth of homes were sold on Long Island. That year’s 29,053 closed home sales were the most in recent memory, even surpassing the boom years of the mid-2000s. But even though there happens to be a pandemic, Long Island has still seen tons of homes sell in 2020. According to The Real Deal, the record-breaking number of transactions for the quarter have depleted inventory, contributing to rising prices and bidding wars. Long Island — including Nassau and Suffolk counties  — had 9,942 home sales from October through December. That was a big jump from the 7,611 homes that sold over the same period in 2019. The median price of a home that sold in that area was $525,000. Sellers are getting way over the asking price since people seem to be leaving Manhattan for Long Island. With people being in quarantine they have realized that having a backyard is better when kids are involved and wealthier NYC residents are flocking to The Hamptons.

ABC News reported Nassau County Executive Laura Curran explaining another reason that home sales have surged: pent-up demand as showings finally reopened post lockdown. Prices island-wide are up 5.55% in Nassau County. And along the North Shore, that number jumps to nearly 9%. Experts say millennials are driving the new wave — those on the older side, in their 30s, with families, but still looking to get out and enjoy eating and shopping. “And these walkable, vibrant downtowns are a real key to that,” Curran said. “That’s what young people are looking for.” But aside from the fear of COVID and the ability to work remotely, officials say the recent surge in gun violence in New York City may be what’s sealing the deal. Since record-low interest rates are helping more people qualify for home loans, it’s resulting in a very hot real estate market. Also according to The Real Deal Median home prices in Suffolk and Nassau counties hit record highs in November. Suffolk County’s median sales price was $472,500, up 18.4% from November 2019. That trend appears to be continuing, as pending sale prices were up 16 percent year-over-year. The number of sales was 19%  higher. Both counties came to a standstill during lockdowns starting in March but quickly recovered in the months when restrictions on real estate activity were lifted.

Sharestates has experienced a surge in lending recently. Since restrictions for construction have lifted, borrowers are also getting back to business. They are seeing their opportunities increase and Sharestates has recently funded some exciting projects on Long Island in return. 

Recently funded Sharestates projects in Long Island: Syosset, Long Island

Syosset is located on the North Shore of Long Island. The school district in Syosset is ranked as one of the top districts in New York State making this a very popular area for young families.  Another reason why Syosset is so attractive to families is that it’s only 27 miles away from NYC making it a very commutable town. This property is a 1 residential/1 medical unit property. The borrower is acquiring the property to add value. When the rehab is complete, the property will be leased out to tenants. The borrower plans to refinance into a conventional loan after rehab is completed. 

  • Loan amount – $547,000
  • Loan Purpose – Bridge 
  • LTV – 75%
  • ARV – 64%

Roslyn Heights, Long Island

Roslyn Heights is another beautiful town located on the North Shore of Long Island and is approximately 22 miles from NYC. Living in Roslyn offers residents a suburban feel and most residents own their homes. There is a mix of young professionals and retirees that call Roslyn home. The public schools in Roslyn are highly rated, making it another attractive town for young families. This property is going to be a complete tear-down and ground­ up construction of a new single ­family residence. After finishing the project, the property will be leased out.

  • Loan amount – $910,000
  • Loan Purpose – Construction 
  • LTV – 70%
  • ARV – 65%

For more information on properties we have funded or for more information about our loan programs click below.

 DC

The District of Columbia has always been in-demand, with a strong jobs market centered around government and its adjacent accouterments, but 2020 has put it over the top. Long & Foster reports inventory of active listings is down more than ~30% in the DC and surrounding metro area (Long & Foster). While government jobs will always ensure demand in the area, the rise of work-from-home culture may deflate some of the pent-up demand from the pandemic. While growth may slow slightly, particularly in the upcoming months (predicted to be the worst of the pandemic thus far), once a return to “normalcy” is restored, DC is expected to see continued positive progress for the coming year. 

Oklahoma

Closing out the year, Oklahoma is one of the only metros in the country that has not reached the recovery stage in the top 50 markets (Realtor.com). Oklahoma is also the 4th least-expensive market in the nation (Norman Transcript). These two factors are red flags, the latter of which should not be interpreted as an investment opportunity. The continued weakness of the economy throughout the state should ward off investment, especially as the economy is projected to suffer further short-term weakening whilst COVID enters its worst phase yet.

 Louisiana

While Louisiana also benefitted from the COVID market price increase, the numbers reflect the state’s continued economic quagmire. Whereas some states posted double-digit sales price increases throughout 2020, prices in Louisiana have increased only ~1.7% to date, ranking 48 of 51 entries, including 50 states and the District of Columbia (LittleBigHomes.com). Much of the country posted significant gains as a consequence of the COVID-induced housing boom, so such a small margin of growth is concerning. Additionally, Louisiana is among the states with the most underwater mortgages (CoreLogic). With federal assistance via the CARES Act expiring in December 2020 and a likely retraction of prices nationally, Louisiana is projected to be in another poor position come the new year, with the number of mortgages underwater increasing as the economic effects of the worst of the COVID impact take hold.

Alabama

Alabama could become yet another victim of the post-COVID boom. October clocked in with home prices soaring ~14% from the previous year; inventory declined by almost ~28% (Huntsville Business Journal). However, the high demand is leading to two major problems: 1) affordability and 2) foreclosures. Alabama was among the three states posting the highest foreclosure rates in the nation (1 in every 6,600 housing units) (World Property Journal). Alabama also posted some of the largest numbers of REOs filed in October. While still well below the national average, and foreclosures are thus far ~80% lower nationally than 2019, such figures are worth taking notice of. Foreclosures are occurring in COVID hotspots where unemployment rates are higher, something Alabama has seen; additionally, foreclosures could be down nationally due to government measures. Given the evidence, and with governmental assistance drawing to a close, these numbers are sure to increase, placing the state in a precarious position to kick-off 2021.

 Florida

Floridians are looking to potentially suffer the worst in the new year. Florida has been notoriously lackadaisical regarding protections for workers and providing relief for tents and renters. Via CNN, more than 1M Floridians have “slight or no confidence” that they will be able to pay rent for January 2021, as the CDC moratorium on evictions is set to expire on December 31 (CNN). In Broward County alone, evictions are expected to rise to ~15K- triple the number of that time period for the previous year. In Miami-Dade County, the Miami-Dade Homeless Trust reported ~6,400 eviction notices filed from March 13 to November 30; that figure is set to impact around ~18K people (Miami Dade Homeless Trust). The problem will be multifaceted from an investor standpoint: 1) rental income has dried up for the better part of the last nine months; that is surely impacting ROI and ability to pay bills, mortgages, etc., leading to the question: how many landlords are already in arrears, and could this impact foreclosure rates? 2) with so many people affected by pandemic unemployment and turned out to the street, is there enough of an influx of population to Florida to afford these homes, further compounding problems and leading to a foreclosure crisis? and finally, 3) in the event that homes are sold quickly to get out from underwater mortgages, will homes be undervalued in a low-tax, warm-weather state, causing an overheating of an already competitive market? It bears watching heading into the first few months of 2021 before making any calculated investor moves.

 Maryland

Predictions are a bit mixed for Maryland heading into 2021. Areas like Baltimore are seeing historic demand, fueled by record-low interest rates and pandemic fears. In Baltimore City and the surrounding Metro, prices are at 10-year highs, and the median number of days on the market is the “lowest in recorded history” of the area (The Baltimore Sun). The demand applies to both detached and attached housing and is spilling into townhomes as inventory continues to dwindle. While some, such as Bright MLS, forecast this trend to continue as pandemic fears also continue, others are not as optimistic. CoreLogic predicts that the average sales price will decrease by around ~1% by April 2021, the first time in nine years (CoreLogic). The theory rests upon continued elevated unemployment, which might be exacerbated by a tragic COVID winter. However, with just a slight dip, a new federal administration seeking to shore up coronavirus regulations, and still-tight inventory, Maryland will potentially have a rebound into the summer months and for the coming years, making it still a strong area of investment for 2021 and beyond.

Delaware

Delaware will remain a strong point for investment into the new year, aided by its optimal location, sandwiched close to Philly, NYC, NJ, and DC (just ask President-Elect Joe Biden). With lower costs than its East Coast counterparts, Delaware is decidedly more affordable for relatively the same access. Over the course of the last decade, income is up approximately ~40% and rent growth over the same period is up ~74% (Morris Tribune). Delaware also has a strong rate of foreclosures, one in every 9,310 housing units (Mortgage Professional America). These two factors together would provide a strong opportunity for a long-term investor looking to potentially pick up properties at auction and stabilize them. Delaware’s location will ensure a demand, regardless of the overall market forces that may occur in 2021.

Arkansas

Razorback Country is poised to see some pains following the pandemic. CoreLogic predicts a contraction of home price growth to ~.6% by July 2021; by contrast, that number was ~4.3% by the end of June 2020 (CoreLogic). With such negligible gains, some markets are expected to see losses next year. Arkansas ranks among the top 5 states with underwater mortgages at 5%. Given that many mortgages are currently in forbearance, and that the projected national economic hardship will exacerbate the situation when federal mortgage safeguards expire at the beginning of the year, this number is likely to increase. Efforts to invest in the state may be hampered by the lack of viable buyers and the possibility that renters will be unable to make market rents.

Georgia

Atlanta has been a red-hot market for years, and COVID’s impact likely will not have any bearing on that in 2021. Unlike some of the inflated demand pent-up from the pandemic, Atlanta’s population increased ~17% from 2010-2019, whereas the population of the US grew only by ~6% during the same time period (US Census Bureau). With the median home value of around ~$289K (Zillow), Atlanta remains an affordable option for investors, either in the fix and flip and investment rental space. The broader metro area also is experiencing the same demand, meaning that the strength of potential investment also extends into the exurbs, and will likely be sustained into 2021.

 Tennessee

Nashville is leading the way for Tennessee to close out 2020 strong and setting a strong tone for the state for 2021. Zillow reports ~26% decline in inventory from the previous year, with sale prices up ~7% and rental prices up ~2% (Zillow). Zillow similarly predicts an increase in these figures into 2021. If opportunities for foreclosure fix and flips present themselves, either for sale or to rent, investors should jump at the opportunity. With vaccines on the horizon, the hospitality industry is poised for a resurgence- combined with lower taxes and relative affordability, the city is set for continued growth into 2021.

Kentucky

Auction.com shares some troubling signs about the state of the Kentucky housing market for primary homeowners, but an opportunity for investors. Kentucky had an above-average rate of foreclosure (56%) in September 2020, and that number remains high (Auction.com). Prices in Louisville are continuing to remain high, making things hard for affordability. As such, there could be a major opportunity for investors looking to purchase at auction and flip for a profit. Additionally, affordability might be an issue for some would-be buyers, so the rental market might so be a strong opportunity.

 South Carolina

Like its northern twin, South Carolina is looking at a booming market. Unemployment is lower than relative to the rest of the country, with unemployment rising only 3% at the height of the pandemic, compared to low double-digits nationally (Greenville Business Magazine). Columbia, Charleston, and Greenville, for example, make up a tier of so-called “smaller cities” that are seeing traction based on affordability, relative safety from the COVID pandemic, and amenities of larger cities without the sky-high prices (Zillow). The average home price is just over ~$204K in the Palmetto State, making it a prime opportunity for investment, as prices are predicted to rise over 7% in the next year.

 North Carolina

Realtor.com has projected Charlotte as the third-best housing market in the country for the coming year (Realtor.com). Prices are projected to soar ~10% into 2021, as new construction continues to keep pace with demand. Additionally, Charlotte is establishing itself as a hub for technology companies, ensuring that high-paying jobs will remain in the area. One interesting point of note, as well: millennials are expected to be the key demographic for driving growth and sales prices. One key factor: Charlotte’s affordability. All things being equal, Charlotte’s market will be thriving well into 2021.

Virginia

Virginia’s housing market remains red-hot to close the year and to start the next. While COVID has fueled home sale trends, the demand in Virginia pre-dates the pandemic by several years (Richmond Association of Realtors), meaning that much of the demand is not artificial (WRIC). However, it has been impacted by the pandemic, which could pose some longer-term problems by overheating the market. For instance, renters are facing significant hardship as incomes are lost due to proactive and prolonged shutdowns in the state. As such, landlords are pressed with lower profit margins and to make ends meet (RAoR). Further complicating demand has been a delay in production and rising costs as goods struggle to get into the country. Homebuilding has gone from a two week to 15-week lead time on windows alone, drastically slowing the process; costs are up nearly $20K on a new build (HHHunt Homes, Virginia), as inventory is scarce and production capacity is reduced with social distancing guides in place.

SOUTH & WEST: MIDYEAR, 2020

 California

With lockdowns ravaging California to close the year, the housing market continued on a tear. The median sales price crossed the $712K threshold for the first time in history, despite a whopping 16.4% unemployment in April 2020, and resting at about 10% to close out the year (New York Times). Despite this, Los Angeles, San Jose, San Diego, Sacramento, and San Francisco represented the markets with the biggest mortgage originations nation-wide (ATTOM Data Solutions). Fueled by a lack of inventory and stringent lockdown rules, and aided by record-low rates, homes are moving quickly. Equity is building at a rate not seen in the state since 2005, and homes are outpacing equity rates nationally (Bloomberg). Given that a broad swath of the state is seeing high demand, from Riverside, Sacramento, and San Diego, to LA, San Francisco, and San Jose, the opportunity is rife. Any chance to take advantage of a flip or acquisition of a long-term rental should produce a solid windfall for investors- a trend that will likely continue into 2021.

New Mexico

Interestingly, while the market has been hot across the country, things are beginning to stagnate a bit in New Mexico. Demand has been steady, without some of the larger spikes based out of major cities into the suburbs. The median sales price for a home in the state is under $200K (Farmington Times), but New Mexico is close to the top with foreclosure rates nationwide (PR Newswire). Despite the affordability, it would remain to be seen whether there is an opportunity for sales in the flip market; perhaps diving into the rental pool in the major cities, such as Santa Fe or Albuquerque, would be a smarter move.

 Arizona

While Arizona is on fire, some cities are suffering a massive shortage of homes at the time of incredible demand; Phoenix alone has only about 1-4 months of inventory, down ~21% from September 2019 (Redfin)– well below the markers for a balanced market. Furthermore, the COVID-driven home buying effect is exacerbated by a ~16% population growth from 2010-2019, a figure which is higher than the national average and comparable metros, and that was before the pandemic (US Census Bureau). With such limited options, home prices are predicted to increase, led by Phoenix, which is projected to have its home prices increase ~6% (Home Buying Institute). As such, 2021 should continue to be prosperous for sellers in the Grand Canyon State.

Colorado

Colorado might see the first initial pains of the post-COVID real estate boom in 2021. Denver sets the economic and real estate tone for the state, for good and bad, trending this way in the most recent recessions. While recent years have been a boom for the city, the loss of wages caused by the pandemic may be a harbinger of economic decline for a state that relies heavily on tourism, which has been largely impacted by coronavirus (Colorado Hard Money). With less money, there is less real estate demand, either for primary or secondary homes, resulting in what is predicted to be a ~9% drop in prices by May 2021 (CoreLogic). This would place the Denver-Metro area among the most-overvalued areas nationally. While inventory is limited and may be a mitigating factor in the predictions, investors should hold off on making moves in Colorado any time in the near future.

 Montana

Montana is seeing a boom in the luxury and secondary home market that is projected to continue into 2021. The FHFA reports that Montana has seen one of the largest price increases in the country at ~10%, fueled by open spaces and relatively limited coronavirus impact (FHFA). Housing prices were on an accelerated trend prior to the COVID crisis, even though income is not rising with respect to living and real estate costs (The Missoulian). The rise of work-from-home culture, however, has meant that big-city employees are getting more bang for their buck in Montana; opportunities may be available for a flip property in 2021.

MIDWEST: MIDWAY, 2020       

 East North Central: IL, OH, WI, IN, MI

 Illinois

Despite many of the extenuating issues in the state of Illinois and the relative problems controlling COVID, Illinois has had a resurgent housing market in 2020, and that forecast is predicted to continue into 2021. The median state-wide sales price rose ~16.5% from October 2019 to October 2020 to ~$233K (Illinois REALTORS). Extending out from Chicago itself, in the nine surrounding counties, home sales are up ~34% annually. Interestingly, the University of Illinois’ Regional Economics Applications Lab reported that most moves occurred in the same county and/or town (University of Illinois’ Regional Economics Applications Lab). In any event, robust growth is still on target for Illinois housing, at least to start 2021; with the administration of the vaccine, however, demand might decrease, making folks remember the same debt and tax issues that have plagued the state for years.

Ohio

Already strong markets in northeastern Ohio have seen a further boost in 2020. Columbus home prices are up ~17% annually (Columbus Business First). In Summit County, property values have climbed to a value higher than that before the Great Recession (Akron Beacon Journal). Homes lasted a mere 19 days on the market, and for 100.3% of the asking price (Columbus Dispatch). With the height of the pandemic as the winter months approach, it is likely that demand will continue well into 2021.

Wisconsin

Wisconsin remains on fire, yet still affordable when reviewed against the rest of the country. Even though the median sales price increased from $12K year over year to $130K, that still remains well below the national average (Wisconsin Realtors Association). Supply is limited in the $200K-$400K range (Mortgage Professional America), and bidding wars are starting to crop up. For the demand, that presents an interesting opportunity to out of state investors, especially when compared with higher-cost options in other states. A bidder from NY might be able to remain more competitive in the market than an in-state resident. As such, with a movement to the suburbs of Milwaukee on the rise, this would create a market for individuals looking to cash in on rental investments.

 Indiana

Similar to Wisconsin, Indiana remains affordable- the #1 most affordable place to own real estate per Forbes (Forbes) with a median home price of $170K, even if that represents a 9.7% year-over-year (Zillow). Combined with a shortage of new construction, quality homes are hard to find for the market with the highest job growth in the Midwest (Norada Real Estate). With an inflow from neighboring Illinois, Indiana presents an opportunity for would-be investors to be able to buy cheaply, renovate, and move on to the next project quickly as interest rates are now at historic lows. However, opportunity windows will likely only be within the next year to make the money bang for the buck, as the state legislature is tackling the housing shortage in the 2021 agenda.

 Michigan

Michigan is seeing a 10% increase in the average value of a home (Michigan Association of Realtors), but it is not just mid-level housing that is seeing a market surge. Interestingly, despite economic concerns surrounding the pandemic, home builders in the state are seeing record demand, with some companies booked two years out, and no longer taking on additional clients (Home Builders Association of Northern Michigan). In-resort areas of northwest Michigan, prices increased ~$80K over the course of a year, from August 2019 to August 2020; in that same month, 51 more homes were sold than the same month the year previous (The Detroit News). Homes in this tier typically range from $400K – $900K, even with lumber costs up ~170% since April 2020 and costs are up ~$16K for a new build.

 

 

West North Central: IA, KS, MO, NE

 Iowa

Marketwatch has Des Moines, Iowa pegged as one of the go-to markets in a post-pandemic world (Marketwatch). As discussed by the National Association of Realtors, there has been a trend away from the high-density, high-cost coasts and into the Midwest, fueled by work-from-home culture and the pandemic (National Association of Realtors), which has made up for the lack of diversity in the local economies. However, while there are always opportunities, it remains to be seen if cities like Des Moines will remain a staple long-term: higher interest rates may drive away would-be buyers from ravaged cities, but will cities in Iowa have the same draw as other, cheaper Midwest locales? Time will tell.

Kansas

While demand is strong in Kansas, the economy will almost certainly be impacted by a recession, thereby impacting the home market. There will be high demand, but low inventory in most of the major metros, including Kansas City, Topeka, Lawrence, Manhattan, and Wichita (Wichita State University). However, this may be offset by a projected ~21% increase in home build permits in the coming year. Even with the additional inventory, however, prices are expected to rise by about ~5% in 2021.

Nebraska

Omaha has taken Cincinnati’s title as the fastest-growing real estate market to close out 2020 (Cincinnati Business Journal). Interestingly, where other metros in the country are being driven by people moving out of attached housing, Omaha is one of the only metros where condo sales are outpacing single-family home sales by ~6% (Redfin). The city has also largely been spared the economic impacts of the COVID crisis as compared to the rest of the country (largely because many of the “Silicon Prairie” jobs have easily transitioned to remote work), creating great stability (Senior Housing News).

Missouri

The last year has brought a number of surprises to the real estate industry, but one of the most surprising is that three of the 15 hottest markets are located in Missouri- two neighborhoods in Kansas City, MO, and Kinloch, MO. Forbes reports that with the combination of suburban homes in high-demand with COVID and the affordability gap of coastal states, the midwestern cities are attracting millennials looking to get into the market (Forbes). With “affordable family-sized houses, good job markets, as well as many of the same big-city attractions like restaurants, bars, sports teams, and cultural institutions,” these cities are becoming havens for tech startups and so-called “smart” manufacturing businesses, bringing more white-collar jobs to these areas than have been present historically. As such, these opportunities are more sustainable, meaning Missouri will likely continue to be a strong market in the long-term.

 

Massachusetts

Massachusetts and the broader Boston-metro area were hot before the pandemic, and COVID has only exacerbated that demand. The median price of a single-family in the state is almost double that of the national average at ~11.3%, but sales are only up ~1.5% from 2019 (The Warren Group). Even with higher inventory available in Boston proper, Boston is expected to see sale prices increase ~5.7% (Boston Globe), partly because, as a “smaller city,” Boston has not seen the numbers of people leaving as compared with other New England counterparts (Boston Magazine). As such, the magazine predicts a larger return to the city than its peers. One major caveat for the Boston area is the affordability crunch, as an already-expensive market will get even more expensive, further compounding the ability of millennials to get into the market.

 

Connecticut

Connecticut has also been among the states that have been given an otherwise unexpected boost from people fleeing both Boston and New York City lockdowns. Coldwell Banker is reporting a surge in Fairfield County and Windham County, particularly, leaving the market with less than three months of inventory (Hartford Business Journal). The “Bridgeport-Greenwich corridor” will see among the biggest price increases in 2021, as projections place a ~7.8% increase (Realtor.com). Fairfield County saw double the dollar volume in November 2020 as opposed to November 2019, as more expensive homes and entry-level homes entered the market (CT Post). With the increase in demand, there was also a decrease in affordability; Hartford was one of the top five metros in the country that saw affordability drop (ABC 17 News). Despite all this, Realtor.com predicts that prices will continue to increase in 2021; with the strong demand and cases surging in the northeast, combined with the limited inventory, affordability will likely continue to be on the decline in the state (Realtor.com).

 New Jersey

New Jersey is a mixed bag of predictions heading into 2021. While not hit as hard at its neighbor across the Hudson, the Garden State was significantly impacted by the COVID pandemic. However, while NY has seen stronger numbers of people leaving, New Jersey, at least initially, has seen some positives in the real estate sector. As people fled the city and began partaking in remote work, Northern NJ rose from 55th to 14th on Urban Land Institute’s hottest real estate markets (Urban Land Institute). The surge was driven partly by the pandemic, and partly because of the affordability of the area for those who previously would have commuted to NYC, but now possess the ability to work from home. Likewise, the Jersey Shore- a haven for vacationers- “sizzled” as people were reluctant to board planes for traditional summer vacations, and South Jersey writ large saw record-breaking numbers (NJ.com).

However, not all the predictions are quite so rosy. Mansion Global predicts that high-cost cities may house employers less likely to continue work from home cultures once a sense of normalcy resumes, prompting more white-collar workers to move elsewhere (Mansion Global). As such, some are predicting that sales will be “anemic” throughout 2021, and prices with decline ~3.8% from 2020 to 2021.

New York

Initial reports are starting to trickle in regarding the initial outflow of New Yorkers, nine months after the city became the initial COVID hotspot in the US. A net loss of only around 70K people fled the city; the city overall saw 3.57M people leave NYC from January 1 through December 7, replaced by 3.5M people— but the buried lede is that the number of people who replaced the initial movers made significantly less money than their counterparts (Unacast). Previously, the annual income was around `$140K; the new arrivals bring in only around ~$82K annually. The study viewed neighborhoods across the boroughs, including Astoria, Tribeca, and Williamsburg. As apartment vacancies hit a 14-year high (NY Post) and apartment rents in Manhattan fall below $3K for the first time in a decade (The Real Deal), the trickle-down effects are becoming obvious. Less income to spend will have an impact across a large swatch of the real estate market in NY: less money for higher-end shopping, as some department stores may look the close shop; less money for eating out, as the dining sector has been crippled by pandemic-related restrictions; and less money to spend on rent. Landlords will have to force themselves to reevaluate their asking price, leaving for less ROI, and potentially less opportunity to expand portfolios.

Putting the numbers in further perspective across the state, not just the City: the US Census Bureau reported that more New Yorkers left the state than any other in the country in 2020 (US Census Bureau). Over 126K people left the state this year- more than half in the boroughs. If that number is verified by the Census, NY may stand to lose a seat in the House of Representatives (Brookings Institute). With a lower population, that will have a further negative impact on some troubling news: New York City alone lost $1.2B in tax revenue since the pandemic hit (The Real Deal). While it is unclear precisely where the losses derive from- fewer citizens closed businesses or unpaid taxes- the revenue will have to be generated somehow. That will likely impact already-strapped landlords, particularly as conversations are opening between the State Legislature and Gov. Andrew Cuomo passed legislation late in December to extend rental eviction moratoriums through at least May 1, 2021.

Rhode Island

While the opportunity may have been ripe in 2019 for investors in Rhode Island, it may make sense for would-be landlords and investors to steer clear for the foreseeable. From 2000-2019, the median rent growth increased by 88.6% (Mooresville Tribune). Stout, an advisory firm, estimates that the state will receive 30K eviction notices in January 2021, when the CDC moratorium expires (Stout). That represents a loss of $119M in rent through the entire state; with such a depletion, it is likely going to have to be made up somehow, likely in property taxes being raised. Additionally, that leaves a vacuum as to who has the financial wherewithal to rent existing homes, creating havoc for landlords.

New Hampshire

Despite COVID, New Hampshire has seen record-setting sales. Since November 2019, the median sales price is up ~16% to $351K, and sales were up 19% over the same period (New Hampshire Business Review). With just over a month of inventory, the situation sits firmly in a seller’s market. Unfortunately, the affordability index has declined 5.4% since last year, meaning many people will likely be priced out of the market.

 Maine

Maine has been relatively unscathed by COVID in comparison to other eastern states, and demand has skyrocketed as people look for more land and outdoor spaces. The Maine Association of Realtors reported a 27% increase in sales from the same period as 2019, and there is 40% less inventory as this point last year (Maine Association of Realtors). Interestingly, reports are stipulating that much of the demand is coming from non-Mainers and that those individuals with out-of-state salaries are driving up the costs. While it is unclear if the demand is of a permanent nature due to the rise in work-from-home culture, or just secondary homes to ease the pain of pandemic living, it may be interesting to see the trends for next year.

 Pennsylvania

Pennsylvania reported significantly positive sales growth across the state, and the surge looks to remain that way into 2021. Harrisburg, and the surrounding Dauphin, Cumberland, and Perry Counties, are projected in the top 10 real estate markets in the country for 2021 (Realtor.com). Per the report, prices are projected to be up ~6.9% in 2021, and up ~13% from 2019. A “below-median” home price is driving the demand, making it accessible for first-time buyers to enter the market while backed up with high-paying jobs in the city and adjacent areas (Patriot-News). In the east, Philadelphia and its suburbs saw the biggest growth in the third quarter of 2020 in the last 10 years (Drexel University Lindy Institute for Urban Studies). Interestingly, despite the price tags (the largest number of $1M+ area homes were sold in Q3), the suburbs reported one of the best quarters since the Great Recession. The median threshold for homes was above ~$300K for the first time in history, aided by only 1.4 months of supply. With demand continuing to surge and a lack of inventory, the Keystone State will have a decidedly strong 2021.

Massachusetts

While Boston’s suburbs are on fire for some, rental woes are being seen for others in the Bay State. Melrose and Worcester break out of Q3 by being named among the Top-10 hottest real estate markets by Realtor.com. According to the report, houses are moving on an average of ~18 days, targeted by cash-conscious buyers as prices in Boston skyrocket. Additionally, the suburban locations provide easy commuting for workers, while giving the peace of mind of space in today’s COVID-conscious times. By contrast, Boston itself is seeing a rental crisis on the horizon. Gov. Charlie Baker has passed an executive order stipulating that no residential evictions can occur before Oct. 17, at the earliest; however, ~315K residents have “no confidence” that they can make August rent, according to a US Census Bureau survey. Landlords are seeing rental income dry up; Vida Urbana/City life projects ~33% of rental households facing evictions in the coming months, with new waves of sickness forecast for the late fall and early winter.

Connecticut

Southwestern Connecticut’s pre-pandemic real estate woes have temporarily been put on the back-burner as remote-working has allowed people to flee hard-hit New York City. March marked the beginning of the pandemic in the tri-state area as COVID-19 exploded, but the average sales price for an SFR in Fairfield County were up ~11.9% that month over the same period in 2019 (Vanity Fair). Additionally, the United States Postal Service reports that approximately 10K New Yorkers registered a new address in Connecticut over the last six months- a huge boon to investors who picked up long-term holds for cheap, as advised in the previous quarter amid the state’s uncertainty. After months of being locked indoors, 139 of 296 SFR sales occurred in June and July 2020 (Ridgefield Board of Realtors). In 2019, the entire state reported 327 sales; as of Sept. 1, there were already 296 closings on the year and on-target for 500 (Coldwell Banker). Even beyond southernmost Fairfield, other areas of the state are seeing a huge pickup in activity as remote work becomes permanent for many companies, meaning that this trend may be more permanent than fleeting.

New York

No state was impacted more by coronavirus than New York, particularly hard-hit NYC. Real estate has suffered greatly during the state’s phased reopening, particularly the commercial sector. With restaurants in the city still closed for indoor dining until Oct. 1., and the exodus of workers since “work from home” became the norm, workers have failed to return to the city. Nearly 90% of restaurants could not pay rent in full in August 2020 (Eatery.com). Office space leases are down ~20% from 2019; more office space is now available than at any point in the last 10 years (Colliers). While some industries delay returns to the office, citing cost-saving measures, others prove the office market isn’t dead yet: Facebook and Amazon recently inked deals for new office space in Manhattan; Blackstone is attempting to lure people back to the office by hiring car service for those apprehensive about mass transit; though Google’s formal policy does not require employees to return to the office until Summer, 2021, around 40% of the office has returned. Assuming that the situation does not deteriorate once again to a full lockdown, this sector of the commercial market may have seen the worst of the pandemic.

Interestingly, not all boroughs suffered equally, nor have areas of Long Island. Manhattan saw a huge inventory increase of 24% in August- the highest total number of homes available in over a decade (New York Post). Sale contracts also fell 6%, showing that the pending market looks no better. Meanwhile, areas of Queens and Brooklyn are on fire: Astoria/Long Island City saw a near ~25% sales increase, a record figure (Street Easy). Brooklyn saw an increase of almost ~39% in August as compared to August 2019. While for some, the outer boroughs provided refuge, for others, the exurbs and suburbs beckoned. Long Island saw the largest home price increases since 2018 over the last few months (OneKey MLS). Pending sales soared over 42% in both Nassau and Suffolk as compared to the same period last year, but inventory dropped in both counties by over ~20%.

Investment sales hit the skids in all boroughs; from January through June, the market saw a 45% decline in sales- translating to $9.65B, according to Ariel Property Group. However, given the figures above, compounded by the new CDC order, it is likely that inventory remains tied up by those in arrears on either rents or mortgages. Come the new year, it will be interesting to see if a pandemic-related bubble has been created on home values, and how much activity will be taken on by investors at auctions and short sales.

New Jersey

Second-hardest hit after its neighbor, New Jersey is still managing to see growth. Sale prices are up over 11% (Bloomberg). Interestingly, the largest jump came in Atlantic/Hammonton, decidedly South Jersey- potentially as people seek out vacation homes near the shore. Proximity to two major cities- 1 hour to Philadelphia, 2 hours to NYC- likely also factor into the equation, just far enough to be away, but close enough to enjoy the remaining benefits of the metros. Further north, Hudson County- including Hoboken- are now in demand, just a short ferry ride or train away from Manhattan. Importantly, rent has remained virtually flat, making it a haven for affordability while rents elsewhere are skyrocketing. Most movers are between 25-50 years of age (NJ.com) and those moving into new buildings are mostly coming from Manhattan (Kushner Real Estate Group). On the whole, it seems like North Jersey is decidedly more stable than its New York counterparts, and a more balanced rental market. It will be interesting to see what happens to the Garden State when the moratorium’s end- should everything continue to hold, NJ may be a boomtown for investment opportunities in 2021.

Rhode Island

Rhode Island faced a housing supply crisis even before COVID, as SFR home sales were down ~19.7% since the second quarter of 2019, while the price increased over 4% in the same time span, with the median SFR price creeping above $300K for the first time (Rhode Island Association of Realtors). These issues are now being further exacerbated as the state becomes a safe haven for refugees from Boston and New York; Apartmentlist.com indicates that ~31% of new rental inquiries for Providence come from Bostonians; over ~12% is from NYC. In the second quarter of 2020, around 430 new SFR purchases were made by Massachusetts and New York buyers; helping to buoy the market temporarily, but as temporary layoffs turn permanent, Rhode Island could be looking at a foreclosure and/or eviction headache.

New Hampshire

Record-low mortgage rates, combined with the flight from larger cities for space, have led to a surprising “double-double” in New Hampshire; in May 2020, unemployment in NH was ~14.5% but home appreciation is above ~10% from 2019 (Laconia Daily Sun). With tight inventory, housing demand was strong throughout the state pre-pandemic, however, New Hampshire is 14th in the nation for attracting in-bound millennials (Smart Asset). A more technologically-friendly generation, combined with companies willing to transition to remote work permanently, the state looks to keep its strong real estate trends.

 Maine

Maine’s housing market is thus far unprecedented in terms of success, even in the throes of coronavirus. Home sales are just 1% behind pace from 2019 through the first 7 months of 2020; in July alone, sales are up ~12% year over year (WMTW ABC8). While South Portland ranks on the list of hottest locations in the country (Realtor.com), even rural areas of the state are seeing a spike in sales as people require more space and relative safety in the pandemic.

 Pennsylvania

Two big stories are coming out of Pennsylvania’s real estate market in Q3. Firstly, as of Sept. 1, barring any further executive direction from the governor, landlords can begin eviction processes. While it remains to be seen how many will occur, about ~$381K of the state’s renters reported being behind on rent in July, per census data. Additionally, unlike some states where eviction proceedings can take months, PA’s process moves quickly: upon a claim being filed, a hearing must be set within 15 days, and once a judgment is rendered, a tenant must vacate the property within 21 days of the decision. That is bad news for landlords and renters alike. This information is compounded by the second story coming out of the state: in contrast to its northeastern counterparts, even as activity in the Philadelphia suburbs increases (up ~9%, according to Drexel University), prices there have fallen while rising in the city itself. In part, this may be a factor of limited housing inventory in the town-home heavy city, whereas other cities are more apartment-centric. Additionally, with prices even cheaper in the suburbs across the border in New Jersey, plus the rise of work from home culture, “suburbs” to Philadelphians no longer translates to Bucks, Delaware, or Montgomery Counties.