HomeUnion Ranks the Best Seasonal Bargains for Investment Housing

The top three metros to find bargains based on seasonality are Pittsburgh, San Francisco and Milwaukee.

IRVINE, Calif., Nov. 16, 2016 – HomeUnion, a leading online real estate investment and management firm, has released a list of the biggest seasonal bargains for investment housing, and found that the winter off-peak period can be the best time of the year to acquire single-family rentals (SFRs). Nationally, the average cap rate for SFRs during the winter months was 6 percent last year, compared to 5.3 percent in the summer. The new Seasonal Single-Family Rental Investment Advantage Report also found that investors pay 7.2 percent less per square foot for the same property during the winter as they do during the spring and summer buying season.

“Based on seasonal cap rate fluctuations, our study conclusively found that early winter is the best time to acquire SFRs,” explains Steve Hovland, director of research for HomeUnion. “In many metros, median home prices drop substantially during the colder months, while rent losses were marginal for investors. Winter is the perfect time to acquire solidly performing SFR assets in cold-weather metros such as Pittsburgh and Chicago, as well as in the Sun Belt markets of Jacksonville, Tampa and Greenville, S.C. These markets all ranked among our top 20 metros,” he says. For properties that need a little TLC, a winter purchase can give contractors ample time to bring the property up to a level that maximizes rents as the spring renting season commences.

“We also discovered that school quality isn’t as important to investors in the winter: Buyers interested in neighborhoods with high-ranked schools make up a greater proportion of sales during the summer compared to the winter,” Hovland adds.

Here’s a complete list of the markets offering the biggest discounts during the winter months:

Metro Area Cap Rate Increase Temperature Spread 2016 Winter Median SFR Price 2016 Summer Median SFR Price 2016 Average Winter Rent 2016 Average Summer Rent
Pittsburgh 31.4%  47 $69,000 $87,000 $1,000 $1,180
San Francisco 21.8% 17 $920,000 $1,200,000 $3,900 $4,360
Milwaukee 19.3% 54 $70,000 $92,000 $1,100 $1,190
Philadelphia 18.8% 46 $127,000 $161,300 $1,420 $1,520
Chicago 18.3% 52 $128,000 $225,000 $1,460 $1,560
Columbus 18.2% 48 $110,000 $149,800 $1,200 $1,350
Boston 18.1% 46 $247,000 $300,000 $2,020 $2,130
Cincinnati 16.3% 47 $74,900 $115,000 $1,090 $1,200
Cleveland 16.0% 47 $62,000 $80,100 $1,100 $1,150
Greenville, S.C. 15.9% 38 $86,250 $140,000 $1,130 $1,220
Detroit 15.9% 51 $120,000 $163,000 $1,210 $1,390
Oklahoma City 15.2% 44 $85,000 $100,000 $1,060 $1,130
Palm Beach 15.2% 15 $235,500 $275,000 $2,130 $2,280
Seattle 12.8% 27 $320,000 $437,200 $1,910 $2,090
Birmingham, Ala. 12.0% 37 $76,700 $110,000 $970 $1,050
Washington, D.C. 11.8% 45 $255,000 $333,300 $1,800 $2,020
Tampa 11.7% 21 $109,100 $130,000 $1,160 $1,210
St. Louis 11.5% 49 $85,000 $105,000 $1,050 $1,100
Jacksonville 11.4% 27 $103,900 $166,800 $1,160 $1,250
New York 11.3% 45 $310,000 $408,000 $2,090 $2,300
San Jose 11.1% 24 $742,000 $1,050,000 $3,350 $3,470
Houston 10.7% 30 $145,100 $170,000 $1,500 $1,610
Minneapolis 10.4% 59 $146,000 $179,000 $1,380 $1,490
Austin 10.2% 34 $219,300 $257,700 $1,560 $1,680
Portland, Ore. 10.2% 33 $260,000 $300,000 $1,660 $1,760
Salt Lake City 9.6% 54 $187,500 $251,500 $1,260 $1,380
Oakland, Calif. 9.4% 24 $428,000 $545,000 $2,510 $2,700
Denver 8.1% 43 $283,000 $335,000 $1,810 $1,970
Baltimore 7.9% 45 $173,000 $200,000 $1,520 $1,660
Miami 7.8% 14 $192,400 $215,400 $1,850 $1,990
Dallas 7.7% 38 $136,500 $178,600 $1,440 $1,530
Orange County 7.6% 15 $615,000 $716,600 $2,900 $3,250
Phoenix 7.6% 38 $161,900 $186,000 $1,110 $1,200
Memphis 7.2% 43 $82,400 $89,400 $980 $1,040
Indianapolis 7.0% 49 $87,000 $106,200 $1,060 $1,100
Atlanta 7.0% 37 $104,000 $117,000 $1,130 $1,180
Orlando 7.0% 21 $147,800 $165,000 $1,240 $1,280
Los Angeles 6.8% 18 $455,000 $550,000 $2,380 $2,530
Nashville 6.5% 42 $129,900 $150,000 $1,220 $1,300
Sacramento 6.2% 40 $260,000 $306,000 $1,440 $1,570
San Antonio 6.0% 32 $125,000 $157,700 $1,300 $1,380
San Diego 5.6% 12 $452,000 $495,000 $2,290 $2,460
Las Vegas 4.9% 49 $178,300 $204,000 $1,250 $1,310
Raleigh, N.C. 4.9% 39 $147,500 $180,000 $1,200 $1,350
Kansas City 4.8% 49 $92,000 $106,875 $970 $1,080
Charlotte 4.6% 38 $110,000 $137,000 $1,130 $1,170
Riverside 3.9% 30 $250,600 $272,000 $1,590 $1,670

Sources: HomeUnion Research Services, Maponics

www.HomeUnion.com

 

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About HomeUnion

HomeUnion is an online real estate investment management firm. Based in Irvine, Calif., it provides all the services needed for individuals to invest remotely in single-family rental (SFR) properties. The company uses a combination of research and data-driven proprietary analytics to incorporate over 110 million homes and 200,000 neighborhoods into their database, and then delivers its solutions to an on-the-ground infrastructure that currently serves 18 locations. HomeUnion’s role spans the lifecycle of the investment transaction: identifying sound investments, handling all aspects of acquisition, maximizing income, protecting asset value, and selling the asset when the time comes.

 

Media Contact:
Stacey Corso
Communications Manager, HomeUnion
stacey.corso@homeunion.com
415.672.6460

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