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Our research team releases regular monthly housing trends reports. These reports break down inventory metrics like the number of active listings and the pace of the market. In light of the developing COVID-19 situation affecting the industry, we want to give readers more timely weekly updates. You can look forward to a Weekly Housing Trends View near the end of each week along with weekly coverage from our Housing Market Recovery Index and a weekly video update from our economists. Here’s what the housing market looked like last week.

Weekly Housing Trends Key Findings

• Median listing prices grew at 12.9 percent over last year, marking the 21st week of accelerating prices and a new high-mark for price growth in our weekly data which goes back to 2017. During a normal year, asking prices begin to dip going into the fall as the types of homes for sale shift and sellers have to do more to attract a buyer from a smaller pool of shoppers, but 2020 is not following this usual seasonal trend, and the typical September asking price remained at $350,000, on par with peak summer home prices. 
• New listings were down 7 percent. The number of sellers deciding to put their home on the market remains limited, but the drop in new sellers is not as large as the overall decline in inventory, which means new listings are a growing share of total listings–providing some small relief for option-starved buyers.
• Total inventory was down 38 percent. With high interest from buyers and limited flow of new listings, the total number of homes available for sale continues to shrink. For the third week in a row the pace of decline was even or improving. We’re a long way from a buyer’s market, but this is a buyer-friendly shift. 
• Time on market is now 13 days faster than last year. With low inventory and a large pool of buyers, homes sell much faster than a year ago. The rapid turnover reflects the unseasonable excess of buyers in the housing market this fall, and will likely persist until sellers come back in a bigger way.

Data Summary

	First Two Weeks March	Week ending Sep 19	Week ending Sep 26	Week ending Oct 3
Median Listing Prices	+4.5% YOY	+11.1% YOY	+12.4% YOY	+12.9% YOY
New Listings	+5% YOY	-15% YOY	-6% YOY	-7% YOY
Total Listings	-16% YOY	-39% YOY	-39% YOY	-38% YOY
Time on Market	4 days faster YOY	12 days faster YOY	13 days faster YOY	13 days faster YOY

You can download weekly housing market data from our data page.

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Our research team releases regular monthly housing trends reports. These reports break down inventory metrics like the number of active listings and the pace of the market. In light of the developing COVID-19 situation affecting the industry, we want to give readers more timely weekly updates. You can look forward to a Weekly Housing Trends View near the end of each week along with weekly coverage from our Housing Market Recovery Index and a weekly video update from our economists. Here’s what the housing market looked like last week.

Our latest inventory data shows sellers have yet to find their confidence given the uncertainty over the economy and the pandemic environment. Buyers on the other hand, especially hungry first timers, remain largely unfazed by the challenges, and are motivated by low mortgage rates and the fear of missing out on the right home. The majority of sellers are also buyers, so even as new listings hit the market, another buyer is also added. Adding to the inventory issues, thousands of previously vacant homes, such as second homes and rentals, have been reoccupied by their owners during the pandemic, effectively taking them off the market.

Weekly Housing Trends Key Findings

• Median listing prices grew at 11.1 percent over last year, matching the fastest pace of growth in more than two years, and the 19th consecutive week of increasing price growth momentum. The rate at which asking prices are growing is more than double the pace set at the beginning of the year. Low mortgage rates are helping offset this increased cost for buyers, allowing them to take on a bigger loan amount.  
• New listings were down 15 percent. The new listings trend made up some of the ground lost last week, likely a result of the fuller week post Labor Day as well as easing from fires in the West and storms in the South. The number of sellers deciding to put their home on the market remains limited even for this time of the year. Seller confidence is improving but at a much slower pace than buyer confidence.
• Total inventory was down 39 percent. With high interest from buyers and limited flow of new listings, the total number of homes available for sale continues to shrink rapidly. The added competition means existing sellers in many markets have the upper hand over buyers.
• Time on market is now 12 days faster than last year. With low inventory and a growing pool of buyers, homes are spending less time to sell. The rapid turnover continues to fuel home sales, but it’s also depleting the amount of options dangerously fast.

Data Summary

	First Two Weeks March	Week ending Sep 5	Week ending Sep 12	Week ending Sep 19
Median Listing Prices	+4.5% YOY	+10.8% YOY	+11.1% YOY	+11.1% YOY
New Listings	+5% YOY	-12% YOY	-17% YOY	-15% YOY
Total Listings	-16% YOY	-39% YOY	-39% YOY	-39% YOY
Time on Market	4 days faster YOY	12 days faster YOY	11 days faster YOY	12 days faster YOY

You can download weekly housing market data from our data page.

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Subscribe to our mailing list to receive monthly updates and notifications on the latest data and research.

https://www.realtor.com/research/weekly-housing-trends-view-data-week-sep-19-2020/?utm_source=Realtor.com+Economic+Research+Mailing+List&utm_campaign=603783f18e-EMAIL_CAMPAIGN_2020_04_26_01_53_COPY_02&utm_medium=email&utm_term=0_5fdb87a164-603783f18e-107971598

IRVINE, Calif. – Sept. 17, 2020 — ATTOM Data Solutions, curator of the nation’s premier property database and first property data provider of Data-as-a-Service (DaaS), today released its second-quarter 2020 U.S. Home Flipping Report showing that 53,621 single-family homes and condominiums in the United States were flipped in the second quarter. Those transactions represented 6.7 percent of all home sales in the second quarter of 2020, or one in 15 transactions. That figure was down from 7.5 percent of all home sales in the nation during the prior quarter, or one in 13, but up from 6.1 percent, or one in 17 sales, in the second quarter of last year.

While the home-flipping rate dropped from the first to the second quarter, both profits and profit margins rose. The gross profit on the typical home flip nationwide (the difference between the median sales price and the median paid by investors) increased in the second quarter of 2020, to $67,902. That was up from $63,000 in the first quarter of 2020 and from $61,900 in the second quarter of last year.

The increase pushed profit margins up, with the typical gross flipping profit of $67,902 in the second quarter translating into a 41.3 percent return on investment compared to the original acquisition price. The gross flipping ROI was up from 38.9 percent in the first quarter of 2020 and 40.4 percent a year earlier. The improvement in the typical ROI marked the first quarterly increase since the third quarter of 2018 and the first year-over-year gain since the fourth quarter of 2017.

The opposing trends – the flipping rate down but profits up – came as the worldwide Coronavirus surged across the U.S., hurting sales but not prices. Home sales sank amid a combination of social distancing aimed at slowing the spread of the virus and rising unemployment connected to the pandemic’s economic impact. Yet prices rose in significant parts of the country as home seekers able and willing to take advantage of historically low mortgage rates ventured into the market and competed for a reduced supply of homes for sale.

“Home flipping was a study in contrasts in the second quarter of 2020, as the flipping rate went one way and profits went the other,” said Todd Teta, chief product officer at ATTOM Data Solutions. “Far fewer house hunters were out in the market looking for homes, which probably cut into the pool of potential buyers that investors could tap. But at the same time, home flippers who were able to close deals did better than they had done in a year and a half. That likely flowed in large part from extremely low interest rates that enticed buyers who remained employed and were willing to house-hunt within social distancing requirements.”

Home flipping rates down in three quarters of local markets

As the virus pandemic upended the Spring buying season, home flips as a portion of all home sales decreased from the first quarter to the second quarter of 2020 in 114 of the 151 metropolitan statistical areas analyzed in the report (75.5 percent). (Metro areas were included if they had at a population of 200,000 or more and at least 50 home flips in the second quarter of 2020.)

Among those metro areas, the largest quarterly decreases in the home flipping rate came in Durham, NC (rate down 40.7 percent); Provo, UT (down 36.6 percent); Boston, MA (down 35.1 percent); Denver, CO (down 33.7 percent) and Salt Lake City, UT (down 32 percent).

Aside from Boston, Denver and Salt Lake City, the biggest quarterly flipping-rate decreases in 53 metro areas with a population of 1 million or more were in Minneapolis, MN (rate down 27.6 percent) and Indianapolis, IN (down 26.5 percent).

The biggest increases in home-flipping rates were in Salisbury, MD (rate up 45.8 percent); Fort Myers, FL (up 20.2 percent); Tallahassee, FL (up 16.8 percent); Corpus Christi, TX (up 14.1 percent) and Kennewick, WA (up 12.6 percent).

Typical home flipping returns up in almost two-thirds of markets

Homes flipped in the second quarter of 2020 were sold for a median price of $232,402, with a gross flipping profit of $67,902 above the median investor purchase price of $164,500. That gross-profit figure was up from $63,000 in the first quarter of 2020 and from $61,900 in the second quarter of last year. The increase boosted the typical return on investment in the second quarter of 2020 to 41.3 percent, up from 38.9 percent in the first quarter of 2020 and from 40.4 a year ago. The ROI in the second quarter stood at its highest point since the fourth quarter of 2018, when it was 43.4 percent.

Profit margins increased from the second quarter of 2019 to the second quarter of 2020 in 95 of the 151 metro areas with enough data to analyze (62.9 percent). The biggest gains were in Fort Collins, CO (return on investment up 167 percent); Johnson City, TN (up 115 percent); Cedar Rapids, IA (up 100 percent); Youngstown, OH (up 92 percent) and Chattanooga, TN (up 91 percent).

Among metro areas with a population of at least 1 million, the biggest increases were in Milwaukee, WI (ROI up 77 percent); San Francisco (up 64 percent); Rochester, NY (up 62 percent); San Jose, CA (up 56 percent) and San Antonio, TX (up 46 percent).

The biggest year-over-year declines in investment returns during the second quarter of 2020 were in Myrtle Beach, SC (ROI down 69 percent); McAllen, TX (down 57 percent); Toledo, OH (down 53 percent); Manchester, NH (down 46 percent) and Jacksonville, FL (down 42 percent).

Investors sold for at least double their purchase price in just six percent of markets 

The gross ROI on home flips in the second quarter of 2020 was at least twice the median purchase price in only nine of the 151 metro areas with enough data to analyze (6 percent).

Those markets were led by Hickory, SC (143.3 percent return, up from 82.4 percent in the second quarter of 2019); Pittsburgh, PA (135.6 percent return, up from 132.4 percent a year ago); Youngstown, OH (125 percent return, up from 65.1 percent a year ago); Springfield, IL (115.1 percent return, up from 79.4 percent a year ago) and Chattanooga, TN (105.4 percent return, up from 55.2 percent a year ago).

The smallest second-quarter 2020 profit margins on typical sales were in Raleigh, NC (11.8 percent, down from 13.8 percent in the second quarter of 2019); Myrtle Beach, SC (12.3 percent, down from 40 percent a year ago); Boise, ID (15.4 percent, down from 16.3 percent a year ago); Las Vegas, NV (18.4 percent, up from 15.2 percent a year ago) and Greeley, CO (18.5 percent, down from 25.9 percent a year ago).

Raw profits remain highest in the West and Northeast, lowest in the South

The highest second-quarter 2020 profits, measured in dollars, were concentrated in the West and Northeast. Among metro areas with enough data to analyze, 21 of the top 25 were in the those regions, led by San Jose, CA (gross profit of $305,000); Honolulu, HI ($173,500); San Francisco, CA ($173,500); New York, NY ($156,550) and San Diego, CA ($149,500).

Eighteen of the smallest 25 profits, in dollars, were spread across southern metro areas, led by Myrtle Beach, SC ($22,250 profit); Raleigh, NC ($27,250); Killeen, TX ($29,375); Lubbock, TX ($29,987) and McAllen, TX ($36,625).

Home flips purchased with financing rise while portion bought with cash dip

Nationally, the portion of flipped homes purchased with financing increased in the second quarter of 2020 to 43.3 percent, from 42.5 percent in the first quarter of 2020, but still down from 48.5 percent in the second quarter of 2019. Meanwhile, 56.7 percent of homes flipped in the second quarter of 2020 were bought with all cash, down from 57.5 percent in the prior quarter, but still up from 51.5 percent a year earlier.

Among metropolitan statistical areas with a population of 1 million or more and sufficient data to analyze, those with the highest percentage of flips purchased with financing in the second quarter of 2020 were Seattle, WA (61.5 percent); San Diego, CA (58.1 percent); San Francisco, CA (55.6 percent); Virginia Beach, VA (50.7 percent) and Hartford, CT (49.7 percent).

Average time to flip nationwide increases to 183 days

Home flippers who sold homes in the second quarter of 2020 took an average of 183 days to complete the transactions, up from an average of 174 in the first quarter of 2020 but down from 184 days in the second quarter of last year.

Percent of flipped homes sold to FHA buyers increases to highest level in three years

Of the 53,621 U.S. homes flipped in the second quarter of 2020, 15.6 percent were sold to buyers using a loan backed by the Federal Housing Administration (FHA), up from 15.2 percent in the prior quarter and from 13.8 percent in the same period a year ago, to the highest point since the second quarter of 2017.

Among the 151 metro areas with a population of at least 200,000 and at least 50 home flips in the second quarter of 2020, those with the highest percentage of home flips sold to FHA buyers — typically first-time homebuyers — were McAllen, TX (32.4 percent);  Stockton, CA (32.3 percent); Bakersfield, CA  (31.8 percent); Visalia, CA (31.6 percent) and El Paso, TX (29.4 percent).

Eighty-nine counties had a home flipping rate of at least 10 percent

Among 695 counties with at least 10 home flips in the second quarter of 2020, there were 89 where those transactions comprised at least 10 percent of all home sales. The top five were Franklin County (Frankfort), KY (27.8 percent); Clayton County, GA, in the Atlanta metro area (21.4 percent); Macon County, TN, in the Nashville metro area (18.6 percent); Portsmouth City/County, VA, in the Virginia Beach metro area (17.5 percent) and Craven County (New Bern), NC (16.4 percent).

Report methodology

ATTOM Data Solutions analyzed sales deed data for this report. A single-family home or condo flip was any arms-length transaction that occurred in the quarter where a previous arms-length transaction on the same property had occurred within the last 12 months. The average gross flipping profit is the difference between the purchase price and the flipped price (not including rehab costs and other expenses incurred, which flipping veterans estimate typically run between 20 percent and 33 percent of the property’s after repair value). Gross flipping return on investment was calculated by dividing the gross flipping profit by the first sale (purchase) price.

About ATTOM Data Solutions

ATTOM Data Solutions provides premium property data to power products that improve transparency, innovation, efficiency and disruption in a data-driven economy. ATTOM multi-sources property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, and neighborhood data for more than 155 million U.S. residential and commercial properties covering 99 percent of the nation’s population. A rigorous data management process involving more than 20 steps validates, standardizes and enhances the data collected by ATTOM, assigning each property record with a persistent, unique ID — the ATTOM ID. The 9TB ATTOM Data Warehouse fuels innovation in many industries including mortgage, real estate, insurance, marketing, government and more through flexible data delivery solutions that include bulk file licenses, property data APIs, real estate market trends, marketing lists, match & append and introducing the first property data delivery solution, a cloud-based data platform that streamlines data management – Data-as-a-Service (DaaS).

https://www.attomdata.com/news/market-trends/flipping/attom-data-solutions-q2-2020-u-s-home-flipping-report/

As the coronavirus pandemic drags on, different parts of the country are feeling the brunt of the shutdowns and economic disruptions very differently. Some suburban enclaves are seeing sky-high demand while others have seen home values drop dramatically just a few months into the pandemic. A new study by GoBankingRates looks at the top 50 American cities most likely to see a poor housing market in the near future.

Some are small cities with long-struggling economies while others are affluent California enclaves that saw record-high home value spikes over the last decade and are now feeling the crash of such unparalleled growth.

“Housing markets can run hot and cold, with a particular area seeing demand change over time,” the study’s author Joel Anderson explained. “[…] If you have to move for a job or your family, discovering that the housing market has gone down the tubes and you’re facing a long wait to sell at a lower price than you would like can seriously hurt your plans.”

To compile the list, GoBankingRates looked at foreclosure rates and the change in home values over the last 12-month and 24-month periods.

Here are the top 10 cities most likely to see storm clouds on the horizon as the pandemic drags on and pushes the U.S. deeper into a recession.

Jackson, Mississippi

Struggling with a high unemployment rate and stagnant job market even before COVID-19 hit, Mississippi has been hit hard by the virus and its impact on the health sector and economy. “Home prices are down almost 10 percent over the last two years, and foreclosure rates are more than triple the national average,” Anderson noted.

An average home in Jackson sells for only $40,024 – down 8.92 percent compared to a year ago, and 9.95 percent from two years ago. One in every 5,004 homes is foreclosed – a high rate that could increase amid pandemic-fueled instability.

Longview, Texas

While some parts of Texas (Houston, Austin) have been seeing booming job markets even in the wake of the pandemic, others have struggled. An average home in Longview, located in East Texas, is worth $155,139 — a remarkable drop of 9.9 percent compared to a year ago.

While the study does not lay out the specific reasons for such a steep fall, the city is far from urban centers and home to an aging population. Foreclosures are also higher than the national average – one in every 5,158 homes.

Redwood City, California

Four out of the ten cities most likely to struggle in the near future are in California. After years of spiking home values, the state is grappling with an affordability crisis exacerbated by the recession. An average home in Redwood, which is part of the pricy Bay Area, is worth a jaw-dropping $1,677,126, but home prices fell 1.04 percent in one year and 5.2 percent in two years. One in every 6,529 homes is foreclosed.

“Like the other high-priced California entries, it’s hard to make the argument you’re treating that as an investment at that price as home values appear to be reversing direction after years of growth,” wrote Anderson.

San Mateo, California

The affluent enclave 30 minutes outside of San Francisco saw some of the highest average home values on the list ($1,562,690). But the rapid growth observed for the last 10 years has started to turn around – values dropped 0.65 percent in the last year and 6.09 percent in the last two years. But at one in every 10,1118 homes, foreclosure rates are still very low.

“Even San Francisco can’t match the the median home price of San Mateo, north of $1.5 million,” wrote Anderson. “But once again, this market appears to have reversed direction with home values losing over 6 percent in the last 24 months.”

Fremont, California

Nestled in the center of Silicon Valley, Fremont is proving to be another victim of the sky-high growth that has been rocking many parts of California over the last decade. The market was bound to crash and home values slipped 4.79 percent since 2018 and 1.09 percent to $1,139,622 since last year. Foreclosure rates, however, remain very low, at one in every 10,811 homes.

“Fremont is definitely among the high-end housing markets turning ugly with a median home value well over $1 million,” Anderson reported.

Laredo, Texas

Located in South Texas, Laredo has long been propped up as the place to buy an affordable home; the average price is $159,321 these days. That said, the job market has been struggling in recent years. As a result, that number fell 4.31 percent since last July and 1.79 since July 2018. One in every 5,296 homes is foreclosed.

Santa Rosa, California

While home values in the northern Californian city of Santa Rosa are high (an average of $608,752), the city is grappling with a serious foreclosure crisis — one in every 3,893 homes is foreclosed. Home values, meanwhile, fell 4.82 percent in two years.

“Santa rosa is experiencing unusually large issues with foreclosures right now,” Anderson wrote. “As such, the fact that home values are down nearly 5 percent over the past two years shouldn’t be so surprising.”

Lake Charles, Louisiana

Several Louisiana cities appear on GoBankRates’ list of cities most likely to be hit hard by the recession. The fifth-largest city in the state, Lake Charles is often hit by hurricanes and other natural disasters (Hurricane Laura caused hundreds of downed power lines and destroyed homes just last month) and is struggling economically.

An average home is worth $179,930 while one in every 4,148 homes is foreclosed. Home values, meanwhile, fell 1.23 in a year and 1.74 in two years.

Stamford, Connecticut

While home to a number of high-paid tech professionals, the Connecticut city of Stamford regularly makes list of cities with a poor economic outlook due to a housing market disproportionate with the entire population. At $579,939, housing prices are down 0.67 percent from last year and 1.18 percent from a year ago. 1 in every 5,268 homes is foreclosed.

“Home values are down this year and last, shaving nearly $7,000 off what your house is worth over the last 24 months,” Anderson observed.

Albany, Georgia

Hit hard by the manufacturing closures that came in the wake of the 2008-2009 housing crisis, the Georgia city of Albany has been struggling to recover ever since. An average home is worth $88,190 while values dropped 1.38 percent in the last year. One in every 4,323 homes has been foreclosed, better than triple the national average.

Head to GoBankingRates for the full list of the 50 housing markets likely to suffer the most through this recession.

https://www.inman.com/2020/09/16/these-10-housing-markets-are-poised-for-serious-trouble/?utm_source=inbriefnonselect&utm_medium=email&utm_campaign=inbrief&utm_content=816806_textlink_5_20200918

Summer is typically the busiest season for real estate, and 2020 is no exception, even during the pandemic. Despite a later start to the buying season than usual, Realtor.com’s August housing data release shows that the market is hotter than ever with one concerning trend: a severe shortage of inventory. In fact, the inventory of newly listed properties is 11.8% lower nationally than August 2019, leading to higher listing prices and shorter time on the market.

Many sellers have also postponed putting their property on the market with the threat of an economic crisis as a result of the COVID-19 pandemic. Meanwhile, low mortgage interest rates are encouraging buyers. The lower inventory and higher buyer demand means it’s currently a seller’s market.

If you are trying to buy a property right now, you will likely find yourself in a situation where there will be several offers on the building you want to buy, which may lead to a bidding war. So, how can you make sure that your offer is the winning one?

1. Submit your “highest and best” offer

If you want to win a bidding war, your best bet is, logically, to put in the highest offer. In highly competitive markets, bidding at the asking price is only the start.

Before submitting an offer, do some research on the real estate market in your area to find out how much properties are typically selling for compared to the listing price. Some sellers may actually list their building lower to attract potential buyers and create a bidding war situation.

Before getting sucked into the offer and counteroffer game, make sure you know exactly how much the property is worth and how much you are comfortable spending. You can find different home value estimators online along with other tools, such as tax assessment cards, to find out how high you should be prepared to bid.

2. Increase your earnest money

The earnest money is the cash amount attached to your offer that is used as a deposit – if your offer is accepted. It shows the seller that you are motivated and making the offer in good faith. The money is held in an escrow account until closing and will eventually be used toward the down payment and closing costs if you have the winning bid.

Depending on the market, the earnest money deposits account for 1% to 10% of the purchase price. The more money you are willing to put down, the more serious the seller will take your offer.

3. Wave contingencies

Contingencies are common in real estate. Most offers are “subject to” the property appraising at the contract price, a satisfactory home inspection, buyer financing approval, and so on. Some contingencies make demands on the seller, such as splitting the closing cost or fixing an item before closing. These contingencies typically protect the buyer. If the conditions are not met — if the home inspector uncovers a significant issue during the inspection, for example — then the buyer can renegotiate or walk away from the contract.

If you want to make your offer as attractive as possible, you should remove as many contingencies as possible to alleviate the pressure on the sellers. Beware, however, that if something does come up, you would need to sacrifice your earnest money to walk away from the deal.

4. Pay in cash

There is a reason why “cash is king” when it comes to real estate. Sellers will find an all-cash offer more attractive than any mortgage, even if the offer might be slightly smaller than others. It removes any uncertainty that may be linked to financing and often guarantees a fast closing.

If you are not in a position to make a cash offer, increase your down payment if possible, and make sure you have your ducks in a row to speed up the mortgage process by gathering any documents you may need and getting pre-approved, for example.

Time is often of the essence in hot markets, and you may lose the property if there are any delays in getting your financing approved.

5. Use an escalation clause

In hot real estate markets, multiple-bid situations are the rule rather than the exception. If you want to have the winning offer, you can include an escalation clause in your bid. This shows the buyer that you are serious about buying the property and willing to increase your offer in set increments to beat any other offer up to a specific price (the “cap”).

Beware, though, that some sellers do not accept escalation clauses. It may also encourage them to counter your offer with your highest bid. It is best only to include an escalation clause if you are confident there will be several offers on the property.

6. Work with the seller

Real estate transactions are stressful and expensive for the sellers, too. They may be purchasing a new property themselves, dealing with repairs and closing costs, and abiding by their own timeline. You have more chances for your offer to be accepted if you show the sellers that you are willing to work with them to make the transaction as smooth as possible.

Some buyers include a letter with their offer to sway the sellers in their favor. If possible, let them know you are flexible on the closing date. You can also offer to pay for some of their expenses, such as the seller’s agent real estate commission or part of the seller’s closing costs.

7. Know when to walk away

It is easy to get carried away when dealing with a bidding war. You may be tempted to offer more than you were initially planning because of the fear of missing out due to the limited inventory. It would be a critical mistake, especially if you are purchasing the property as an investment. Remember that the essential part is not to win at all costs — but to make a smart investment.

Never lose track of the maximum amount you are willing to spend comfortably and the property’s value. If things get out of control, it is often best to give up and save your money for the next opportunity that may present itself.

When it comes to bidding wars, the best policy is always to be prepared for all eventualities. Ensure that you are pre-approved before putting in an offer and that your credit score is in great shape to secure financing. You should also have all the documentation you need to act quickly when required — and a responsive team (real estate agent, contractors for bidding if necessary, mortgage agents, etc.) by your side.

You should never forget, however, that the best way to win is sometimes to walk away from a bidding war rather than overpaying for a property.

https://thinkrealty.com/win-bidding-war/?inf_contact_key=ad0460ef4c3ba100f08290d913076795680f8914173f9191b1c0223e68310bb1

Housing markets can run hot and cold, with a particular area seeing demand for a home change over time. And that can present a pretty serious issue for many people. If you have to move for a job or your family, discovering that the housing market has gone down the tubes and you’re facing a long wait to sell at a lower price than you would like can seriously hurt your plans. Given how prominent a house is among the average American’s assets, seeing it lose value — or worse, having the bank foreclose — can be tough to recover from.

That’s why GOBankingRates has put together a list of the 50 housing markets where residents might have the most to worry about. By taking foreclosure rates and the growth (or lack thereof) in home values over the last one-year and two-year periods, the study identifies those areas where local real estate is seriously suffering.

So is your town in one of these markets that’s in serious danger of turning ugly? Here’s a look at 50 cities where things are looking bleak.

Last updated: Sept. 4, 2020

50. Rockford, Illinois

• July 2020 home value: $96,054
• 1-year price change: 2.87%
• 2-year price change: 8.41%
• Foreclosures: 1 in every 4,096 homes

You might think a median home price under six figures would mean residents would have an easier time covering their mortgage, but the foreclosure rate here is well over triple that of the national average. However, this city does have the largest increase in average home value over the last two years of any city included here.

49. Charleston, South Carolina

• July 2020 home value: $347,338
• 1-year price change: 2.53%
• 2-year price change: 3.95%
• Foreclosures: 1 in every 7,049 homes

While a one-year return on a home’s value of 2.53% is disappointing, in the context of gaining just under 4% over the last two years would seem to show that home values here are grinding to a halt. It’s certainly better than going negative, obviously, but people with a lot invested in their home might be looking for a lot more.

48. Fairfield, California

• July 2020 home value: $484,057
• 1-year price change: 2.24%
• 2-year price change: 3.83%
• Foreclosures: 1 in every 5,413 homes

In terms of whole dollars, no city in this study saw more improvement in home values over the last year than Fairfield. However, that’s mostly due to the already high values there. While the typical home added over $10,000 to its value, which translates to growth of just 2.24%.

47. Amarillo, Texas

• July 2020 home value: $139,134
• 1-year price change: 2.06%
• 2-year price change: 4.72%
• Foreclosures: 1 in every 13,183 homes

If you think a housing market where nobody’s getting rich but people appear to still be paying their bills at roughly the same rate as most places isn’t “ugly,” per se, Amarillo’s inclusion might not sit right with you. The low growth rate of home values is clearly not what residents would prefer, but it also has the third-lowest foreclosure rate in the study — coming in slightly ahead of the U.S. average.

46. College Station, Texas

• July 2020 home value: $259,894
• 1-year price change: 3.20%
• 2-year price change: 5.99%
• Foreclosures: 1 in every 3,337 homes

Home to Texas A&M University, College Station residents are having serious trouble holding onto their homes. Foreclosure rates there are roughly triple that of the national average.

45. Joliet, Illinois

• July 2020 home value: $154,129
• 1-year price change: 2.49%
• 2-year price change: 6.61%
• Foreclosures: 1 in every 4,666 homes

The foreclosure rate in this Illinois city translates to over one in every 5,000 homes, showing that plenty in the burg must be struggling with their bills. However, with home values hovering around $150,000, the city does offer some relief from high home prices.

Watch Out: In Less Than a Decade, You Won’t Be Able To Afford a Home in These Cities

44. San Angelo, Texas

• July 2020 home value: $143,511
• 1-year price change: 2.23%
• 2-year price change: 5.68%
• Foreclosures: 1 in every 6,910 homes

This Texas city is another where the typical home comes in at under $150,000 in value. However, the lower value of the mortgages there hasn’t translated to more affordability for many — foreclosure rates there run well over double the national average.

43. Annapolis, Maryland

• July 2020 home value: $476,615
• 1-year price change: 2.04%
• 2-year price change: 1.55%
• Foreclosures: 1 in every 14,146 homes

Another city where your definition of “ugly” matters, Annapolis has the second-lowest foreclosure rate in this study — one that’s only slightly higher than the national average in spite of a median home value approaching a half-million dollars. It landed on this list because of the ugly state of growth for those home value, adding just 1.55% over the last 24 months.

42. Cedar Rapids, Iowa

• July 2020 home value: $157,643
• 1-year price change: 2.59%
• 2-year price change: 6.34%
• Foreclosures: 1 in every 4,165 homes

At first blush, Cedar Rapids might not seem so troubled. The median home value is very affordable, and the two-year growth in values isn’t absurdly low — it’s roughly two-thirds the national average. But folks living in this Iowa burg are still struggling to pay the bills, with a foreclosure rate more than triple that of the rest of the country.

41. Round Rock, Texas

• July 2020 home value: $311,624
• 1-year price change: -0.17%
• 2-year price change: 6.65%
• Foreclosures: 1 in every 15,143 homes

This town is just a hair more likely than the average American to have their home foreclosed on. In fact, it appears as though the main reason this Texas town lands on this list is because of a slight decrease in home values last year. That would also mean that the market grew by over 6.5% the year prior, so knock on wood for Round Rock that the latter half of 2018 and first half of 2019 represent a hiccup and not a new trend.

40. Chicago

• July 2020 home value: $232,722
• 1-year price change: 2.01%
• 2-year price change: 3.74%
• Foreclosures: 1 in every 9,796 homes

The median home values in Chicago don’t at all seem in line with that of the nation’s second-largest city, but that doesn’t mean you should jump at the chance to buy. They’re not growing very fast at all, and with a foreclosure rate well over the national average, there are clearly plenty of people who are wishing they hadn’t taken the plunge to become a homeowner in the Windy City.

39. Decatur, Illinois

• July 2020 home value: $78,350
• 1-year price change: 2.48%
• 2-year price change: 4.08%
• Foreclosures: 1 in every 11,022 homes

Another Illinois city showing signs of trouble, Decatur offers a shot at homeownership for well under $100,000. However, with the stagnant growth in home values, the low purchase price could just reflect the low return on investment you can expect.

Good To Know: The 50 Cheapest, Safest Places to Buy a Home in the Pandemic

38. Plainfield, Illinois

• July 2020 home value: $256,814
• 1-year price change: 2.06%
• 2-year price change: 4.69%
• Foreclosures: 1 in every 5,904 homes

This trilogy of Illinois cities is a telling sign of how these ugly housing markets do appear to group regionally, indicating that they could be signs of broader issues with the area economy — with several other states making multiple appearances. Plainview’s market shows another entry of a disturbing trend toward stagnant growth in values and foreclosure rates much higher than the national average.

37. Conroe, Texas

• July 2020 home value: $235,097
• 1-year price change: 2.13%
• 2-year price change: 5.88%
• Foreclosures: 1 in every 4,423 homes

While the two-year growth rate in values is bad but not awful — it’s still over half that of the national average — it’s the foreclosure rate that should really raise red flags about this Texas city. Better than one in ever 4,500 homes are foreclosed on there.

36. Albany, New York

• July 2020 home value: $189,966
• 1-year price change: 1.71%
• 2-year price change: 4.98%
• Foreclosures: 1 in every 7,236 homes

The capital of the Empire State features a foreclosure rate just over double that of the national average. Throw in home values that have grown under 5% over the last two years and this is one area where homeownership appears to be working out a little differently than a lot of people imagined.

35. Vallejo, California

• July 2020 home value: $446,573
• 1-year price change: 2.00%
• 2-year price change: 3.47%
• Foreclosures: 1 in every 5,116 homes

While the median home value in Vallejo is a little over double that of the national average, the foreclosure rate is about triple the rate for the nation as a whole. The average homeowner might have added just under $15,000 to the value of their home in the last two years, that’s a gain of just under 3.5%.

34. Wilmington, Delaware

• July 2020 home value: $220,529
• 1-year price change: 2.27%
• 2-year price change: 4.35%
• Foreclosures: 1 in every 5,503 homes

While Wilmington’s median home value is just under the national average, the lower prices aren’t necessarily translating to an easier time keeping up with payments for everyone. Just over one in every 5,000 homeowners is facing foreclosure here.

33. Shreveport, Louisiana

• July 2020 home value: $108,460
• 1-year price change: 4.26%
• 2-year price change: 2.18%
• Foreclosures: 1 in every 5,637 homes

Shreveport’s low home values provide a shot at affordably owning a home, and there was even some good news over the last 12 months as home prices have risen almost on pace with the national average. However, the biggest story would be the high foreclosure rate, with one in every 5,637 homes being foreclosed on.

32. Georgetown, Texas

• July 2020 home value: $329,335
• 1-year price change: 0.84%
• 2-year price change: 4.26%
• Foreclosures: 1 in every 11,428 homes

Georgetown is another Texas city with a relatively low foreclosure rate for this list — with one in every 11,428 homes getting foreclosed on compared to one in every 15,226 at the national level. However, home values there are stagnating, adding less than 1% over the last year.

Tips: 25 Tricks To Sell Your House for a Bigger Profit

31. Tracy, California

• July 2020 home value: $535,983
• 1-year price change: 1.75%
• 2-year price change: 3.45%
• Foreclosures: 1 in every 4,460 homes

Tracy is an expensive city, with home median home values running over a half-million dollars. However, growth in those values appears to have stalled out over the last 24 months while foreclosures are happening at over three times the national rate.

Pictured: Stockton, California, located roughly 30 minutes away from Tracy

30. Newark, Delaware

• July 2020 home value: $262,161
• 1-year price change: 3.45%
• 2-year price change: 4.85%
• Foreclosures: 1 in every 2,760 homes

This lesser-known Newark is currently seeing a lot of people seriously struggle with homeownership. While the median home value is right around the same level as the country as a whole, the foreclosure rate is more than quintuple that of the national rate.

29. Delray Beach, Florida

• July 2020 home value: $359,797
• 1-year price change: 2.36%
• 2-year price change: 4.50%
• Foreclosures: 1 in every 3,305 homes

Delray Beach’s tiny rate of growth in home values could be part of why so many people are struggling to hold onto theirs. The foreclosure rate there is well over four times that of the national average.

28. Williamsburg, Virginia

• July 2020 home value: $338,446
• 1-year price change: 1.30%
• 2-year price change: 2.59%
• Foreclosures: 1 in every 7,018 homes

Williamsburg is considerably more expensive than the rest of the country in terms of buying a house, and that could be driving some people to take on mortgages a bit bigger than they can afford. With one foreclosure for every 7,000 homes, residents are more than twice as likely to go through one than the average American.

27. Sugar Land, Texas

• July 2020 home value: $318,902
• 1-year price change: 1.25%
• 2-year price change: 1.23%
• Foreclosures: 1 in every 11,188 homes

Sugar Land has the characteristics of several other Texas towns in that the foreclosure rate is much lower than the norm in this study, but the growth rates in home values were also very low — notably, low enough to land them here.

26. Lakewood Township, New Jersey

• July 2020 home value: $413,330
• 1-year price change: 1.16%
• 2-year price change: 0.43%
• Foreclosures: 1 in every 13,056 homes

Lakewood Township also features a foreclosure rate that isn’t that much higher than the national average. However, the burg has also seen home values creep up by a mere 0.43% over the last two years.

25. Plano, Texas

• July 2020 home value: $351,661
• 1-year price change: 1.28%
• 2-year price change: 0.57%
• Foreclosures: 1 in every 11,274 homes

Over the last two years, the value of the average home in Plano is up just over a half percent. And given that it rose 1.28% over just the last 12 months, that indicates that the 12 months prior to that were especially ugly.

24. Lafayette, Louisiana

• July 2020 home value: $179,084
• 1-year price change: 1.45%
• 2-year price change: 0.82%
• Foreclosures: 1 in every 12,054 homes

If you really love living in Lafayette, you might not see so many issues with the current state of affairs — with relatively affordable homes and a foreclosure rate only slightly higher than the national average. However, if you do think you’ll be moving eventually, the fact that the return on investment on your house is so low over the last two years is going to be an issue.

Check Out: Houses in These 29 Cities Are Suddenly Major Bargains

23. Bryan, Texas

• July 2020 home value: $191,949
• 1-year price change: 0.49%
• 2-year price change: 4.71%
• Foreclosures: 1 in every 4,720 homes

Bryan saw home values rise a piddling 0.49% from July 2019 to July 2020. Meanwhile, foreclosure rates there are churning at better than three times the national average.

22. Aurora, Illinois

• July 2020 home value: $199,387
• 1-year price change: 0.92%
• 2-year price change: 3.09%
• Foreclosures: 1 in every 5,632 homes

The last 12 months produced just under 1% in growth for the value of their home — translating to under $2,000 in value. The 12 months prior were better, but not by much — the full two years added just over 3% to the value of an average home there.

21. Elgin, Illinois

• July 2020 home value:$217,006
• 1-year price change: 0.72%
• 2-year price change: 4.08%
• Foreclosures: 1 in every 4,157 homes

The foreclosure rate in Elgin is roughly triple that of the country as a whole. And it’s certainly not paying off well for those who aren’t losing their homes — the growth in home values remains very low.

20. San Francisco

• July 2020 home value: $1,484,177
• 1-year price change: 0.48%
• 2-year price change: -0.16%
• Foreclosures: 1 in every 10,441 homes

This is one housing market that might have just been running too hot for a long while. The median home value at about $1.5 million could just mean that the negative growth rate over the last 24 months and foreclosure rate higher than the national average reflect the consequences of prices running too high for too long.

19. Richmond, California

• July 2020 home value: $585,965
• 1-year price change: 0.21%
• 2-year price change: 2.80%
• Foreclosures: 1 in every 4,239 homes

This California city is seeing a lot of its residents struggling as the foreclosure rate is running three times that of the national average. Add to that a mere 0.21% growth in home values over the last 12 months and things are starting to feel ominous.

18. Monroe, Louisiana

• July 2020 home value: $117,916
• 1-year price change: 0.77%
• 2-year price change: 1.28%
• Foreclosures: 1 in every 6,576 homes

While Monroe residents are likely glad that they’re at least not losing ground on their home values, getting less than 1% in growth per year isn’t going to have anyone dancing in the streets. The last 24 months have produced just a 1.28% increase — translating to just $1,500 more for the average home.

17. Baton Rouge, Louisiana

• July 2020 home value: $193,558
• 1-year price change: 1.73%
• 2-year price change: -0.71%
• Foreclosures: 1 in every 5,878 homes

While home values in Baton Rogue saw a small increase over the last year, that vanishes if you stretch it to 24 months. Going back to July 2018, home values are down there to the tune of 0.71%.

16. Champaign, Illinois

• July 2020 home value: $150,666
• 1-year price change: 2.33%
• 2-year price change: 4.67%
• Foreclosures: 1 in every 2,093 homes

This Illinois town has the dubious honor of the single highest foreclosure rate to appear in this study — though, one doubts anyone there is popping the bubbly to celebrate — at a rate of roughly one in every 2,100 homes. That’s better than seven times the national average.

15. Irvine, California

• July 2020 home value: $1,043,105
• 1-year price change: 0.35%
• 2-year price change: -0.26%
• Foreclosures: 1 in every 6,172 homes

Another California city proving that very expensive home markets can also go very toxic, Irvine has a median home value of over $1 million but is seeing some serious issues of late. The fact that home values appear to have plateaued is one issue, but the foreclosure rate that’s twice that of the nation as a whole is very troubling.

14. Baltimore

• July 2020 home value: $153,279
• 1-year price change: 0.57%
• 2-year price change: 3.51%
• Foreclosures: 1 in every 2,816 homes

Baltimore features the third-highest foreclosure rate in the study at over one in every 3,000 homes. And while the price of a house there is low, the last two years have produced precious little growth in home values.

13. New Orleans

• July 2020 home value: $224,293
• 1-year price change: 1.46%
• 2-year price change: -0.22%
• Foreclosures: 1 in every 3,739 homes

One of America’s oldest and most historic cities, New Orleans residents appears to be struggling in recent times. Foreclosure rates are high and home values have dipped slightly over the last two years.

See: 50 Cities With the Most Homes Under $100K

12. Peoria, Illinois

• July 2020 home value: $89,001
• 1-year price change: 0.87%
• 2-year price change: -0.19%
• Foreclosures: 1 in every 4,159 homes

The birthplace of Richard Pryor is a good place to settle if you’re primarily focused on affordability — you’ll probably be able to purchase a home for under six figures. That said, the last two years would seem to indicate that you’re unlikely to see a ton of growth in that value after your purchase. It’s also the last of some nine Illinois cities in this study — the third most of any state.

11. Edison, New Jersey

• July 2020 home value:$407,257
• 1-year price change: -0.36%
• 2-year price change: -0.62%
• Foreclosures: 1 in every 8,168 homes

Edison has seen home values decline over both the last 12 and 24 months. Foreclosure rates are relatively low for this study, but they’re still almost double the rate for the nation as a whole.

10. Albany, Georgia

• July 2020 home value: $88,190
• 1-year price change: -1.38%
• 2-year price change: 1.74%
• Foreclosures: 1 in every 4,323 homes

This might be the lesser-known of the two Albanys on this list, but it’s the one with a significantly more troubling housing market. Prices dropped over the last two-year period and foreclosures are coming at better than triple the national average.

9. Stamford, Connecticut

• July 2020 home value: $579,399
• 1-year price change: -0.67%
• 2-year price change: -1.18%
• Foreclosures: 1 in every 5,268 homes

The costly housing market of Stamford doesn’t appear to be offering much let up after you close. Home values are down this year and last, shaving nearly $7,000 off what your house is worth over the last 24 months.

8. Lake Charles, Louisiana

• July 2020 home value: $179,930
• 1-year price change: -1.23%
• 2-year price change: -1.74%
• Foreclosures: 1 in every 4,148 homes

Lake Charles represents the sixth and final Louisiana city in this study, making it the fourth-most common state on this list. Home values there have dipped by 1.74% over the last two years.

7. Santa Rosa, California

• July 2020 home value: $608,752
• 1-year price change: 0.13%
• 2-year price change: -4.82%
• Foreclosures: 1 in every 3,893 homes

With homes being foreclosed on at a rate of better than one in 4,000, Santa Rosa is experiencing unusually large issues with foreclosures right now. As such, the fact that home values are down nearly 5% over the last two years shouldn’t be so surprising.

6. Laredo, Texas

• July 2020 home value: $159,321
• 1-year price change: -4.31%
• 2-year price change: -1.79%
• Foreclosures: 1 in every 5,296 homes

This Texas border town offers distinctly affordable homes, with the average home value just under $160,000. And that’s down significantly since just last July — dropping some 4.31% over that period.

5. Fremont, California

• July 2020 home value: $1,139,622
• 1-year price change: -1.09%
• 2-year price change: -4.79%
• Foreclosures: 1 in every 10,811 homes

Fremont is definitely among the high-end housing markets turning ugly with a median home value well over $1 million. But anyone paying those prices might want to seriously reconsider as it now appears to be a depreciating asset if you look at the last two years.

4. San Mateo, California

• July 2020 home value: $1,562,690
• 1-year price change: -0.65%
• 2-year price change: -6.09%
• Foreclosures: 1 in every 10,118 homes

Even San Francisco can’t match the median home price of San Mateo, which is north of $1.5 million. But once again, this market appears to have reversed direction with home values losing over 6% in the last 24 months.

3. Redwood City, California

• July 2020 home value: $1,677,126
• 1-year price change: -1.04%
• 2-year price change: -5.20%
• Foreclosures: 1 in every 6,529 homes

The tenth and final California city listed here is also the priciest, clocking a median home value in excess of $1.6 million. And like the other high-priced California entries, it’s hard to make the argument you’re treating that as an investment at that price as home values appear to be reversing direction after years of growth.

2. Longview, Texas

• July 2020 home value: $155,139
• 1-year price change: -9.90%
• 2-year price change: -2.91%
• Foreclosures: 1 in every 5,158 homes

Longview represents the 11th and final Texas city, the state that placed the most cities in this study. The two-year decline in home prices of 2.91% belies the extremely troubling 9.9% drop that has come over jTexas #californiaust the last 12 months.

Pictured: Tyler, Texas, located roughly 40 minutes away from Longview

1. Jackson, Mississippi

• July 2020 home value: $40,024
• 1-year price change: -8.92%
• 2-year price change: -9.95%
• Foreclosures: 1 in every 5,004 homes

Collectively, all but 14 of the cities listed here are from one of four states — Louisiana, Illinois, California and Texas — so it’s all the more notable that the No. 1 spot is also the lone Mississippi city in the study. Home prices are down almost 10% over the last two years, and foreclosure rates are more than triple the national average.

https://www.yahoo.com/news/50-housing-markets-turning-ugly-090000594.html

Here’s how to use passive real estate investing in your portfolio.

Investing in real estate can be a smart move if you’re interested in creating new income streams. “Real estate can be a great way to generate passive income that’s not dependent on your principal employment,” says Rick Myers, founder and president of Integrated Financial Services in Grand Rapids, Michigan. As a landlord, you can reap the dual benefits of appreciation from your investment and ongoing rental income. That can help to ensure a more comfortable retirement or help to keep you afloat if an economic downturn results in the loss of your primary job. If you’re interested in using passive real estate investing strategies in your portfolio, here are seven rules to follow.

Pick your game plan.

Investing in real estate for passive income isn’t one-size-fits-all. Before wading in, first figure out what strategy fits best, says Colton Brausen, commercial broker for Kris Lindahl Real Estate in Minneapolis. For example, consider whether you’re more interested in owning an apartment building or multifamily home to generate real estate passive income versus a commercial building in which you’re dealing with business tenants. Also think about how involved you want to be when it comes to things like collecting rent or handling repairs, and whether you’d prefer to hand off those duties to a property management company. “There is no right answer,” Brausen says. “It depends on you as the investor and where your comfort lies.”

Passive doesn’t mean hands off.

Generating real estate income passively can help you make money in your sleep, but it requires putting in some work up front to get that income flowing. “Too many people are passive about the investment decisions themselves, and that can lead to very active headaches,” says Adam Kaufman, co-founder and chief operating officer of ArborCrowd, a real estate investment firm. While there are plenty of opportunities to create passive income, rental property investors can’t skip out on due diligence. Kaufman says investors should be proactive in thoroughly researching investment properties. That means asking questions about the property and the seller before committing to the purchase. And if the answers you get leave you with even more questions, you should probably move on, he says.

Diversification matters as much as location.

When using real estate for passive income, it’s important to consider the level of diversification in your portfolio. “Investing in a portfolio that’s diversified by property type, tenant mix and geography will greatly increase the probability that it will provide a stable and predictable stream of income over the long term,” says Scott Bennett, a real estate advisor with Wells Fargo Private Bank. Depending on how much you have available to invest in passive real estate, that may mean owning multiple rental properties. Or you could choose to spread your investment dollars across different real estate mutual funds, real estate investment trusts or crowdfunded rental properties. Diversifying real estate income streams is key to balancing risk and reward.

Pay attention to real estate market trends.

Certain segments of the real estate market may perform better than others during periods of market volatility or broader economic shifts, such as a recession. For instance, Jeff Holzmann, CEO of IIRR Management Services, points to the multifamily sector as potentially being more resilient than commercial properties such as hotels or office buildings during challenging economic environments. While multifamily housing isn’t completely risk-free, it may offer better opportunities for returns if demand for residential rental units remains high. Learning how various parts of the real estate market react to changing economic conditions can help you find the best opportunities to keep passive real estate income coming in consistently when the country is experiencing a downturn.

Choose the right capital sources.

When buying real estate for passive income, taking out a loan is an obvious choice — but don’t overlook the benefits of leveraging retirement assets to create rental income. “A self-directed IRA gives you the opportunity to make investment decisions in areas based on your knowledge and expertise,” says Kelli Click, president of Strata Trust. You can use a self-directed individual retirement accountto purchase residential rental properties, commercial rentals or even land to generate passive income. Leveraging IRA assets can help you avoid taking on debt and having interest payments on a loan detract from your returns. There are certain IRS rules you need to follow when taking this route, so Click suggests bringing a third-party property manager on board to avoid overstepping.

Know your time horizon.

Passive real estate investing is something you could include in your portfolio for years to come, but it’s important to know your time horizon when deciding which properties to invest in. “High-quality real estate is more illiquid in nature and designed for the long term,” says Peter Brunton, chief investment officer at Strategic Wealth Partners. That means if you anticipate needing the cash you’re planning to invest in a rental property in the next five to 10 years, you’ll need to think ahead about how easy it will be to eventually offload that asset. Again, that goes back to performing due diligence and studying market trends so you have an idea of what demand for the property will be like down the line.

Professional help can make passive real estate investing easier.

Whether you’re investing in real estate for passive income for the first time or you have several years of experience owning rental properties, consider calling in the professionals for help. That starts with connecting with an experienced agent who can walk you through the pros and cons of various investment options, Brausen says. Once you find a rental property for passive income, your team may expand to include a property manager, real estate attorney and contractors to get the property in shape or keep it maintained. Some of your profits will go toward paying them, but it can be well worth it if you’re able to generate real estate income without doing any heavy lifting yourself.

Seven rules for using real estate investments for passive income:

— Pick your game plan.

— Passive doesn’t mean hands off.

— Diversification matters as much as location.

— Pay attention to real estate market trends.

— Choose the right capital sources.

— Know your time horizon.

— Professional help can make passive real estate investing easier.

https://www.yahoo.com/news/7-rules-using-real-estate-195857647.html

If you’re an aspiring real estate investor, building good habits will be the core foundation to your success.

From the moment you rise to the time you go to bed, outlining your day will make you more efficient and more effective at your job.

Here is a game plan to implementing habits to develop to put you on your path to achieve your real estate investment goals.

HAVING A SCHEDULE

Having a daily routine of planned activities will help you get into a rhythm.

Waking up at the same time, going to the gym daily and even planning your meals are great for building structure.

Setting a schedule will help you clear your mind, giving you laser focus.

The side benefit of such a structure is you will not be worrying about whether you forgot to do something.

There are many scheduling, CRM and organization tools you can install on your phone and computer, making it easier than ever to stay organized.

These tools will send you reminder messages so you don’t miss an important meeting or appointment.

FIND A NICHE

There is an ocean of property types and investment strategies out there.

The world is a complicated place, finding a niche helps simplify life.

Pick one type of property or strategy to invest in; this will give you an identity and make you an expert in the niche you choose.

For example, if you work in rehabbing single family homes in a certain area, over time you will become an expert in this industry and will know what to look for in regards to the local market.

Developing strong relationships with property brokers, contractors and lenders will be beneficial to your success.

For example, a great relationship with a property broker may result in access to insider pocket listings unavailable on the MLS.

Go with what you know! Try to stay away from projects outside your niche as this can become time consuming and bring on unnecessary risk.

SETTINGS GOALS

Great real estate investors set short and long term goals.

For instance, a long term goal might be turning over 1 fix and flip every month or earning $200K profit per year.

A short term goal might be going to the gym every 2 days for a month.

Humans thrive with goals, having a target to aim for will help you orientate yourself towards a brighter future and help you avoid complacency.

PERSEVERE THROUGH DOWN MARKETS

Real estate markets, like all markets, are cyclical.

Like a surfer, learn to ride the highs as well as the lows.

Position yourself to withstand an unexpected downturn in the real estate market as it is inevitable.

And don’t be discouraged if you have a few bad years, stay positive and find ways to persevere.

GO TO SCHOOL

Getting higher education is a valuable tool. Becoming more knowledgeable could open up various job opportunities throughout the real estate industry.

People with degrees often get promoted and have higher incomes than those without.

According to APLU.org, high school grads earn 62% of what a college graduate earns.

DIVERSIFY

Rule No. 1: Never lose money.
Rule No. 2: Never forget rule No. 1.

– Warren Buffet

The number one rule of investing is preservation of capital. The easiest way to achieve this is through diversification.

Don’t put all your eggs in one basket and consider partnerships if necessary to diversify into multiple projects.

This will balance out your portfolio in the case one of your assets is underperforming.

PATIENCE

Patience is a virtue. Real estate markets have been around for eons and will always be cyclical.

What is valuable today is worthless tomorrow. Avoid buying at the top of the market, and try getting into up-and-coming neighborhoods, or buying when you think a recession is at the bottom.

Therefore, don’t chase deals. Have cash reserves ready for a drop in the market, in order to capitalize on bargain deals.

WORK SMARTER NOT HARDER

Know your priorities and limitations. Be efficient and do one thing well, outsource the tasks you struggle with.

Don’t scoff at the idea of getting some outside help. When blocked on something ask for feedback.

Not a web developer? Don’t try to build everything yourself. Trim the fat and focus on your money makers.

CREATE PASSIVE INCOME

Creating passive income helps you leverage your time and is one of the most powerful income generating strategies in the world.

If you have a solid rental business setup and organized, you will have a lot more time to focus on developing other businesses or living a more fulfilling life.

HIRE THE RIGHT TEAM

Paying employees a little more than competitors can be beneficial in the long run.

Hiring competent people to make difficult decisions on your behalf will not only benefit your business but also give you more time to do the things you love.

Additionally, turnover in any business can be costly due to the training time for new employees, so it’s best to find great employees and stick with them.

10 Habits of Successful Real Estate Investors

Our research team releases regular monthly housing trends reports. These reports break down inventory metrics like the number of active listings and the pace of the market. In light of the developing COVID-19 situation affecting the industry, we want to give readers more timely weekly updates. You can look forward to a Weekly Housing Trends View near the end of each week along with weekly coverage from our Housing Market Recovery Index and a weekly video update from our economists. Here’s what the housing market looked like last week.

Weekly Housing Trends Key Findings

• Median listing prices grew at 10.1 percent over last year, the fastest pace of growth since January 2018. After yet another tick up, home asking price growth continues to surprise on the high side. Sustained price gains come as a result of still highly constricted levels of supply and unwavering demand. With sellers gaining leverage, buyers are now contending with rapidly accelerating competition. 
• New listings were down 11 percent. Improvement to new listings lost some momentum this week but the overall four week trend points to improvement in the horizon. The small number of homes for sale has been a key limiting factor for buyers in the market, so continued recovery in new listings is key for home sales in the coming months. 

• Total inventory was down 36 percent. With the number of active buyers growing rapidly and beyond seasonal normals, more deals are taking place late in the summer. That continues to put a dent on overall inventory volumes. 
• Time on market is still 4 days faster than last year. In addition to the sellers’ market pressures, in which homes sell quickly after listing, measured time on market is also dropping as the share of fresh listings rises Traditionally, market velocity peaks in May, but this year we’re seeing that peak evolve during August.

Data Summary

	Week ending Aug 15	Week ending Aug 8	Week ending Aug 1	First Two Weeks March
Total Listings	-36% YOY	-36% YOY	-35% YOY	-16% YOY
Time on Market	4 days faster YOY	4 days faster YOY	4 days faster YOY	4 days faster YOY
Median Listing Prices	+10.1% YOY	+9.9% YOY	+9.4% YOY	+4.5% YOY
New Listings	-11% YOY	-6% YOY	-11% YOY	+5% YOY

Weekly Housing Trends View — Data Week August 15, 2020

With mortgage rates hovering around historic lows, now is a great time for many people to become first-time homebuyers.

But, if you don’t have healthy savings built up in your bank account, you may be thinking about tapping your 401(k) balance to make a down payment. You are, technically, allowed to do that, but experts generally agree that drawing from your retirement savings is not the best way to achieve homeownership.

If you’re thinking of going down that path, here are some considerations, and a few alternatives.

What’s involved in dipping into your 401(k) to buy a house

Federal rules allow you to borrow up to $50,000 or half the value of the account, whichever is less, to use the money for a home purchase. You won’t owe a 10 percent penalty on the withdrawal if you’re under 59.5 years of age. You can repay the money without having to pay taxes.

However, if you lose your job the money will have to be repaid by your next federal tax return or it will be considered a withdrawal and you’ll be taxed on the sum at your full rate, plus that penalty. In addition, many plans won’t let you make new contributions until you repay the loan.

So this loan can be costly in terms of what you won’t be saving, as well as possibly forgoing a company match on your contributions.

Why borrowing from a 401(k) is a bad idea

“Leave retirement money for retirement,” said Greg McBride, Bankrate’s chief financial analyst.  “There are plenty of other low down payment options, particularly for first-time homebuyers.”

Drawing funds from your 401(k) account is essentially a permanent setback to your retirement finances. “The money you take out, even if you later put it back in, that’s just money you’re replacing,” he said. “You’re always going to be behind where you could have been.”

Cathy Pareto, president of Cathy Pareto and Associates, a Coral Gables, Florida-based financial advising firm, agrees that using 401(k) money toward purchasing a house is ““probably not the best use of those dollars.” She also underscored the logic that that money, once spent, can never fully be recouped.

‘The time value of money is critical to the growth of a portfolio,” she said. Taking money out of a retirement account prevents it from compounding interest. The 401(k) allows employed people to set aside part of their salary tax-free and let that money grow tax-free until it’s withdrawn at retirement. As of June 2020, some $28 trillion is salted away in these accounts.

Plus, Pareto added, some 401(k) plans won’t let you borrow money anyway.

If you have to rely on your 401(k) money, save more before becoming a homeowner

“The ability to save consistently is an important determinant of success as a homeowner,” McBride said. “If you haven’t figured out how to save money before you buy the house, you are not going to figure out afterwards.”

Owning your own home requires financial discipline beyond just saving enough for a down payment.

Unexpected repairs can pop up at any time when you are your own landlord, and you’ll also have to pay for property taxes and other expenses, including possible HOA fees on top of your monthly mortgage payments.

“If you’re having to stretch to buy the house, you have to do a cost-benefit analysis.” Pareto said. “If you’re going to have to commit financial suicide for that, I’m not sure that’s the best decision.”

Alternatives to drawing from your 401(k) to buy a house

“If you’re stretching to buy a house and you don’t have the capital outside of a retirement plan, it begs the question: can you afford to buy the house?” Pareto said. It’s best to build up your other savings accounts before you buy a house. “Maybe minimize what they’re contributing to the 401(k) until they can sure up capital.”

McBride agrees. “If you don’t have a demonstrated track record of saving money, that’s something you want to establish before you take the plunge into homeownership,” he said. “Buying before you’re financially ready can really limit your financial capabilities. Everything about owning a home costs money.”

But, he said, even if you have small balances in your savings accounts, you may still be eligible to buy a home with a down payment smaller than the standard 20 percent.

Especially for first time homebuyers and other qualified applicants, there are a number of federally-subsidized programs that can help you realize that goal, including FHA and VA loans.

Bottom line

Relying on your 401(k) to finance a home purchase is almost never the right decision for most homebuyers. Instead, you’re better off focusing on growing the rest of your portfolio, and earmarking a regular savings account for a downpayment in the future.

https://www.bankrate.com/mortgages/401k-to-buy-a-house/?pid=email&utm_campaign=ed_ho_wkn&utm_medium=email&utm_source=email&utm_adgid=1459842&brid=dd1107ed59d256c8337ffacce2acdbc9136d83ef66208311fa6ce29c124ce2d4