There's been lots of demand for housing since the COVID-19 pandemic took hold. With mortgage rates plummeting, buyers are lining up to lock in home loans -- but they need homes to go with them, and low inventory is driving prices up. That's good news and bad news for real estate investors.
If you're an investor who makes a living flipping houses, you may find that you'll be paying a premium for your next property in the coming months. But you might also succeed in commanding top dollar for a flipped home, especially in locations where there's been an uptick in demand. As such, it pays to know where those areas are.
Thankfully, real estate service Clever has compiled a list of metros where buyers are clamoring for homes. Here are the ones that have seen the largest increases between early April and mid-June.
1. Albany, New York
New York City real estate may be sluggish right now in the midst of COVID-19, but the Albany area is booming. And in June, the median listing price was $12,612.50 higher than it was back in April, when housing demand declined.
2. Houston, Texas
As was the case in Albany, buyer demand decreased in the Houston area back in mid-April. Although homes in the Houston metro are currently sitting on the market for roughly six more days than they were in April, the median listing price is now $19,770.40 higher. What's unique to Houston right now is that there's extremely low housing inventory below the $500,000 price point, which could be leading to more buyer demand.
3. Harrisburg, Pennsylvania
The Pennsylvania housing market took a hit at the start of the pandemic, when the Northeast emerged as its epicenter. But now, buyer demand is spiking as cases in the area have declined. In fact, sellers were able to ask for an average of $18,129 more for their homes in June than they could in April, and over 76% of homes have been sold within 14 days of listing.
4. Dallas-Fort Worth, Texas
Houston isn't the only metro area in Texas that's hot right now: The Dallas-Fort Worth area has also taken off. The number of homes under contract increased substantially between April and June, and the median number of days on the market dropped 34%.
5. New Orleans, Louisiana
New Orleans is known for its restaurant and nightlife scene -- activities that have largely been off limits since the COVID-19 pandemic began. As such, you'd think buyer demand would be waning in New Orleans, but not so. The median listing price for available homes increased by $12,633 in June, and pending sales have increased as well.
Should you avoid these hot markets, or dive right in?
Investing in a housing market with high demand can be a mixed bag. On the one hand, you might pay more for a home, but in return, you may have an easier time selling it and scoring the asking price you want. In fact, you may even get more than your asking price if increased demand leads to bidding wars. It therefore pays to weigh the pros and cons of buying in these and other sizzling markets before moving forward.