• Zero Flux
  • Posts
  • New Report: Most expensive and cheapest counties to buy a house

New Report: Most expensive and cheapest counties to buy a house

Plus, Medical Outpatient Buildings Investments on the rise and 6 more RE Insights

Hey

If you have not received an email in a while, as a reminder you signed up on Zero Flux - A daily newsletter with 5-10 actionable real estate trends.

If you would like to unsubscribe, here is a quick link

Please note: I send an email most weekdays at 6:00 ET, so if you don’t see the email in your inbox in the future, please check your spam.

A Quote

"The most contrarian thing of all is not to oppose the crowd but to think for yourself."

- Peter Thiel.

Today’s Rates

Real Estate Trends

2023 Rent Growth Strong in Some Midwest Markets link

Image

  • The Midwest emerged as a leader in apartment rent growth in 2023, with more than one-third of the top performers nationwide. Stable demand and limited new supply underpinned significant price increases.

  • Fargo and Madison stood out within the largest 150 apartment markets, with effective asking rents climbing around 6% in 2023. This growth reflects robust regional market health.

  • Lincoln and Champaign-Urbana also saw notable rent growth, approximately 5% in 2023. These markets demonstrate the broad-based strength across the Midwest.

  • Smaller Midwest markets like Youngstown-Warren-Boardman, Grand Rapids, Dayton, Akron, and Omaha experienced around 4% rent growth. This indicates widespread regional momentum.

  • Among the 50 largest markets, Cincinnati and Chicago were the top performers, each with 3.6% rent growth in 2023. This underscores the competitive advantage of Midwest markets in attracting renters.

  • Only two Midwest markets, Kalamazoo and Fort Wayne, fell below the U.S. average for rent growth in 2023. This overall success story highlights the Midwest's solid market fundamentals.

Enjoy the newsletter? 🙏 Please forward to a friend. It only takes 10 seconds. Writing this one took 3 hours. 🙂

Multifamily Development Upsizes on Height, Unit Counts link

  • The trend toward larger and taller multifamily buildings is being driven by a mix of relaxed zoning laws and strong investment in smaller cities. This shift is enabling the construction of projects at scales previously unseen, with developers focusing on maximizing profitability through increased unit counts.

  • Between 2021 and 2023, over 2,900 new buildings with more than 200 apartment units were added in U.S. cities, marking a 17% increase compared to the previous three years. This growth not only reflects changing market dynamics but also highlights an evolving approach to multifamily development amid rising construction costs and land scarcity.

  • Despite a slowdown in rent growth, the current real estate market, characterized by record pricing and limited inventory, continues to bolster the renting appeal. This environment is prompting the construction of taller buildings, underscoring a sustained demand for rental housing in an era of affordability challenges and demographic shifts.

What are the most expensive and cheapest places to buy a house? the Map link

Image

  • Home prices rose 4.4% from December 2022 to December 2023, with mortgage rates doubling since early 2022 to 6.8%. The current housing market is described as the least affordable in recent memory.

  • Renting is now cheaper than buying in 47 of the 50 largest U.S. metropolitan areas, according to a 2023 Realtor.com analysis. This shift makes renting a more attractive option for many Americans amidst skyrocketing home prices.

What are the most expensive housing markets in the U.S.?

  1. Santa Clara County, CA: $1,583,130

  2. San Mateo County, CA: $1,573,470

  3. Marin County, CA: $1,454,450

  4. San Francisco County, CA: $1,332,660

  5. Nantucket County, MA: $1,313,450

Where is it cheapest to buy a home in the U.S.?

  1. Todd County, SD: $42,940

  2. Cochran County, TX: $50,140

  3. McDowell County, WV: $50,960

  4. Cottle County, TX: $53,690

  5. Stonewall County, TX: $57,140

Risks

Scammers Use Agent Deepfakes to Fool Buyers, Sellers link

  • High-tech scammers are employing deepfake technology to hijack real estate transactions. A financier was tricked into wiring $25 million by scammers who used deepfakes to impersonate his colleagues in a live video call.

  • The evolution of scam tactics has reached a point where spotting fraudulent communications is increasingly challenging. CertifID reports a shift from easily spotted misspellings to highly convincing, fraudulent communications that mimic real interactions.

  • The importance of vigilance and secure communication methods in the real estate industry has never been more critical. Experts stress the need for education, verification of information, and the use of encrypted communication to protect against sophisticated scams.

It would mean a lot if you could reply (even with a ‘Hi’ or any feedback) to this email - it helps with deliverability and ensures the email lands in your inbox. 🙂 

Off Topic

Mapped: Breaking Down the $3 Trillion African Economy by Country

Image

Location Specific

Why Inland California Housing Is So Exposed To Downturn Risk: Report link

  • Inland California, alongside parts of New York City and Chicago, faces high risk in a housing market downturn. Attom's report highlights 50 communities vulnerable based on affordability, unemployment, and underwater properties in Q4 2023.

  • Unemployment and poor affordability are significant stressors in these regions. For example, in Riverside County, California, 74% of the average local wage is needed for median home ownership costs, and areas near Fresno report unemployment rates over 10%.

  • The report also points out the resilience of communities in the South and Midwest against housing downturns. This resilience contrasts with the vulnerability of certain areas due to high unemployment or poor affordability.

  • A notable factor in assessing risk is the percentage of underwater homes, with the national average at 6%. However, in some communities, this figure is much higher, highlighting regions with potentially greater financial instability in the housing market.

Tiny Home Generates Big Demand From Desperate Las Vegas Renters link

  • A 160-square-foot tiny home in Las Vegas received over 100 inquiries for its $950/month rental price. The demand reflects the dire need for affordable housing options in the area.

  • The home includes utilities and is fully equipped with a kitchenette, bathroom, and lofted bedroom. It demonstrates how people are willing to compromise on space for affordability.

  • With Las Vegas average rent at $1,990, the tiny home offers a significant discount. The rising rental prices since 2020 highlight the escalating housing crisis in Sun Belt cities.

  • Nevada's legislation has made it easier to create accessory dwelling units to tackle the housing shortage. This policy change aims to increase the rental housing stock through backyard tiny homes.

  • Startups like Samara are entering the tiny home market to meet growing demand. Their initiatives, including in-house manufacturing, signify the potential for tiny homes to alleviate housing pressures.

25% of Sellers in Florida Are Slashing House Prices  link

  • Amid an ongoing insurance crisis and high mortgage rates, nearly 25% of Florida properties are selling for less than their original asking price. This trend indicates a significant price adjustment in the state's real estate market.

  • Florida witnessed the highest home price appreciation during the pandemic, leading some homeowners to sell even at reduced prices. The adjustment seems driven by the desire to cash out on recent appreciations and the impact of soaring insurance premiums.

  • The state has seen a 102% increase in home insurance rates over the past three years, among the highest in the U.S. This surge in insurance costs is contributing to the increased willingness of homeowners to sell, affecting the overall market dynamics.

Pro Member Only Content Below

Medical Outpatient Buildings Investment Activity Ticks Up in Q4

(This content is restricted to Pro Members only. Upgrade)

  • Medical Outpatient Building (MOB) investment volume increased by 15% quarter-over-quarter in Q4 2023 to $2.0 billion, bringing the full-year total to $7.1 billion.

  • MOBs traded at an average of $287 per sq. ft. in Q4.

  • Los Angeles was the top market for MOB investment in 2023 with $448 million, followed by Washington, D.C. with $425 million and Atlanta with $406 million.

  • Average MOB triple-net asking rent increased by 0.4% year-over-year to $23.66 per sq. ft.

  • Net absorption of 2.2 million sq. ft. in Q4 brought the full-year total to 6.6 million sq. ft.

  • Houston was the top market for MOB absorption in Q4 with 780,000 sq. ft., followed by Chicago with 500,000 sq. ft. and Minneapolis with 270,000 sq. ft.

  • The 60 largest U.S. MOB markets had a combined 9.6 million sq. ft. of inventory under construction as of Q4.

  • link

North America Data Center Trends H2 2023 

  • In 2023, primary data center market supply surged by 26% year-over-year to 5,174.1 MW, with an unprecedented 3,077.8 MW under construction, reflecting a 46% increase. Atlanta saw the most significant growth, with construction up by 211% to 732.6 MW.

  • The average monthly asking rate for data center space jumped 18.6% year-over-year to $163.44 per kW/month across primary markets. Northern Virginia experienced the most considerable price hike, with a 42% increase.

  • Preleasing in primary markets is strong, with 83% (2,553.1 MW) of the construction already preleased, predominantly to cloud providers and increasingly to AI-driven demand.

  • The overall vacancy rate in primary markets is near a record low at 3.7%, leading most tenants to renew existing leases due to limited relocation options.

  • Power availability is a more critical factor than geography in data center operators' location decisions, emphasizing the sector's growing concern over energy constraints.

  • Despite material and labor cost increases, construction and investment in data centers continue to rise, fueled by unprecedented demand, particularly from cloud services and AI.

  • Market dynamics indicate strong rental growth and investment interest, suggesting robust market activity and potential for further capital influx into the data center sector in 2024.

  • link

That's all, folks.

Cheers,

Vidit

P.S - Read past newsletters here

Referral Milestones

Discount

Referrals Needed

30% off FOREVER on the Pro Plan

5

50% off FOREVER on the Pro Plan

10

75% off FOREVER on the Pro Plan

15

100% off FOREVER on the Pro Plan

25

Want to sponsor the newsletter? Details here

If you are finding value, please consider helping the newsletter by becoming a paying subscriber

A subscription gets you:

✓ More issues per week

✓ Special reports on new housing studies

✓ Exclusive insights that are usually tucked behind paywalls (which I cover the costs for)

✓ Curated Top 10 lists

✓ The latest updates on prop-tech funding rounds

Join the conversation

or to participate.