Salt Lake City and San Jose, California are among cities where home listings disappear within 37 to 40 days from March 2018 and February 2019, according to a report.
Sales in recent months signaled the arrival of spring, when more people start to look for homes. However, it seems that even when houses go off the market quickly in major cities, many still prefer to rent than purchase their own property. High home prices and a lower net worth serve as the primary factors for their decision, and this means that property investors should still look into apartments as a lucrative venture. If you’re concerned about financing an acquisition, FHA loans are a common option because of their lower interest rates.
Expensive Home Prices
It still took sellers around 83 days to close a transaction just like last year, which could mean that many remain priced out of the market. In Salt Lake City, the time it took to sell a house only involved 37 days compared to 29 days in the previous year. The longer time may reflect the high median price of $397,000 in the Utah capital that makes it too expensive for the average American.
The market in San Jose surprisingly showed a different situation. Sellers closed deals within 30.1 days, compared to just 22 days last year. The median price of $1.1 million also unfazed several buyers. Despite the longer time on the market, the 124% increase in sales meant that buyers wasted no time in putting their names on the deeds.
Why Multifamily Properties Remain Profitable
Instead of buying a house and then flipping it for a resale, you should consider acquiring a multifamily property especially if you plan to invest in Seattle. The market has somehow reached its peak in February after median prices hit $592,000, as evidenced by more owners and investors who put their assets on the market. It only took sellers to close a deal in 19 days during the same month last year, but listings in the previous month stayed nearly twice as long on the market at 37.1 days.
While four to five weeks of staying on the market are still short, the transactions could involve deep-pocketed buyers. If you truly want to cash in on the property market, renting a building seems a better option. Millennials are more likely to rent a condominium or an apartment than any other generation, due to most of them still grappling with student debt.
Instead of selling your property, you may want to consider doing some improvements to add more units or upgrade certain facilities. There are several options to finance a renovation, such as borrowing from FHA multifamily lenders or credit unions.
It’s a good time to buy a home if you have the money, which isn’t the case for a lot of Americans. Most people will continue to rent and postpone their plans of finally owning a house. As an investor, you should see this as an opportunity to invest in a strategic multifamily building.