HomeVestors Forecasts Higher than Expected Home Prices in Key Cities as Frozen Demand for Rental Housing Thaws
Pent-Up Demand from Rough Winter to Push Spring Prices "Well Beyond" Current Predictions
DALLAS - April 3, 2014 // PRNewswire // - As the Polar Vortex that plunged the country into the deepest deep freeze since the winter of 1912 recedes, HomeVestors of America (the "We Buy Ugly Houses"® people) expects home prices to surge "well beyond what we are already seeing."
That's the word from David Hicks, HomeVestors co-president. "The upward pressure on home prices - economic growth and a history of slow home construction - eased somewhat due to the horrible winter weather," Hicks said. "But we think there are a number of markets nationwide that will run up against a housing shortage that will boost home prices even higher than most of us initially expected as the spring thaw gets underway."
Hicks noted that new quarterly data compiled by Local Market Monitor identifies the markets where conditions are right for home prices to rise, making them prime targets for investors in single family homes as rental properties.
Three Texas cities lead the list - Fort Worth (1), Houston (2) and Austin (3). "The economy has been growing quickly in these markets, there are lots of renters, and there aren't many foreclosed properties to provide competition," noted Ingo Winzer, president and founder of Local Market Monitor.
"In all the major markets in Texas, we are experiencing an actual shortage of properties for sale." Hicks noted. "Our franchises tell us they are quickly selling every house they can buy."HomeVestors' franchises are all independently owned and operated, which means they understand from a local viewpoint what is happening in over 110 markets nationwide.
Other cities making the Top Ten in order include:
- Orlando, which profits from a resurgence in tourism, a business staffed by a lot of workers who rent;
- Nashville, which has a well-diversified economy based on healthcare and business services;
- Seattle, which benefits from the technology boom and a lot of single workers with high incomes;
- Charlotte, which is growing because of a strong business services sector;
- Atlanta, which is also growing because of business services;
- Denver, which benefits from the boom in shale oil and gas; and
- Fort Lauderdale, which features a rapidly-growing retail and tourist industry.
The quarterly data, which is developed by Local Market Monitor, categorizes 300 U.S. markets according to different investor risk preferences including Dangerous, Speculative, Medium Risk and Low Risk.
"Investors should weigh the data carefully according to their risk preferences before making a decision about investing in a market," said HomeVestors co-president Ken Channell. "For those who can handle more risk, markets ranked as 'speculative' and 'medium risk' in the data could provide more upside potential if the purchasers pay attention to sound buying principles and know their local market."
There are nearly 50 markets on the list ranked as "speculative," including seven cities in Ohio and five in New York state, and 164 markets listed as "medium risk," including 11 in Texas and 10 in California.
Of the six cities ranked as "dangerous" (Rockford, IL; Decatur, AL; Johnstown, PA; Anniston-Oxford, AL; Rocky Mount, NC; Decatur, IL) all are characterized by persistently high unemployment and negative job growth.
About the Quarterly Data
The data identifies markets that will be good rental markets and where home prices are likely to increase at a good rate over the next few years. Criteria include markets where:
- The population has been growing at above-average rates (4% or better) with growth coming from people moving there in search of jobs;
- the current rate of job growth of 2% or better; and
- there is low unemployment, so that new jobs will be filled by people who move there, not by unemployed people who are already there.
Markets are excluded that:
- Have a small population because they don't have stable economies;
- with very high home prices because, although they have many renters, they live in apartment buildings, not in single-family properties;
- have very low home prices because they don't have stable renters;
- where home prices haven't increased; or
- where homes are already over-priced.
About HomeVestors of America Inc.
Dallas-based HomeVestors of America, Inc. is the largest professional house buying franchise in the U.S., with over 56,000 houses bought since 1996. HomeVestors recruits, trains and supports its independently owned and operated franchisees that specialize in building businesses based on buying, rehabbing, selling and holding residential properties. Most commonly known as the "We Buy Ugly Houses®" company, HomeVestors strives to make a positive impact in each community. In 2013, for the eighth consecutive year, HomeVestors was among the prestigious Franchise Business Review's "Top 50 Franchises," a distinction awarded to franchisors with the highest level of franchisee satisfaction. For more information, visit www.HomeVestors.com. In 2014 HomeVestors was recognized as the 25th fastest growing franchise by Entrepreneur Magazine and number 126 in the Franchise 500 by Entrepreneur Magazine.
About Local Market Monitor
Local Market Monitor, the premier real estate forecasting solution, offers investors in homes and home mortgages the local market risk intelligence they need to make informed decisions. Using a proprietary formula called the Equilibrium Home Price, Local Market Monitor determines if markets are currently over or under valued, equipping users with a long-term risk and investment perspective. Covering over 300 local markets, Local Market Monitor also presents key investors with a 12, 24 and 36-month home price forecast. The solution includes sorting capabilities allowing subscribers to view and compare real estate markets along various metrics, including an Investment Suitability Ratings to identify opportunities based on individual investing goals. To learn more visit www.localmarketmonitor.com or call 800-881-8653.
SOURCE HomeVestors of America Inc.