A particularly promising spot for house flippers to prospect might be the Northeast region of our fair land. That's because an interesting new report shows those states have on average the oldest homes in the country -- implying the presence of lots of properties prime for rehabbing, especially for DIYers, as well as presenting a good place for new construction to stand out.
I'm inferring all that from a study by Porch, the home improvement networking site, titled simply "Cities With the Newest Homes."
The report uses Zillow (NASDAQ: Z) (NASDAQ: ZG) and census data to date and price the ages of homes across the country. It finds only about 20% of all homes in the U.S. were built in the past 20 years and only 4.6% since 2014. And here's another tidbit: More than 30% of homes in the Northeast states were built before 1940.
And, the report says, about 40% of millennials want newly built homes. So, if you want to hit an investing sweet spot in this market, maybe build a new house in a desirable neighborhood in some leafy Northeast suburb. It should stand out.
Location, location, and priorities
The report notes the choice for many homebuyers comes down to priorities: a preference for new community amenities, energy efficiency, and new appliances and HVAC systems; or more affordability and value in older homes nestled in long-established neighborhoods.
Then it comes down to location in the larger sense. The report says: "One of the most important questions prospective homebuyers need to answer is whether they would prefer to buy a new or old home. However, housing inventory varies significantly by location, and some parts of the country are more likely than others to have new homes."
The report also notes that "fast-growing, newer cities, with higher numbers of single-family homes and larger average home sizes, are likely to attract people leaving older, crowded cities as they seek lower-density areas and space to work from home."
We also learn that the fast-growing states in the South and West have a larger share of new homes than up north. That stands to reason, of course, but you might guess for a minute or two which of the 25 largest cities (350,000 residents or more) has the highest percentage of homes built in 2000 or later, according to the Porch study.
It's Raleigh, North Carolina, at 36.5%. Among midsize cities (populations of 150,000-349,999) it's Enterprise, Nevada, at 81.1%. And among cities of 100,000 to 149,999 residents, it's Surprise, Arizona, at 72.2%. With the lone exception of Meridian, Idaho, all 30 cities among the top 15 in each of the smaller markets are in the South, Southwest, or the West Coast. Columbus, Ohio, is the only exception to that among the 25 largest cities.
The Millionacres bottom line
Folks interested in scoping out new markets for investment, living purposes, or both can benefit from reports like this from a macro perspective.
Every market is different, of course, and so is every neighborhood within that market. But with interest rates hitting new lows and a big cohort of younger folks aging into the homebuying market, knowledge is power, or at least empowering, as a new normal emerges in the coming post-pandemic months and years.