With More Buyers’ Markets Emerging, Real Estate May Be a Great Place to Invest Your Money

More residents of expensive coastal cities are looking to relocate and reap the benefits of less pricey locales

Source: Mansion Global

The best investments are often made by taking the road slightly less traveled. 

Instead of investing in properties in expensive coastal cities such as San Francisco, Seattle or New York, many are focused on midsize cities and growing vacation spots. These regions often offer more property for less money, plus a lower cost of living overall. 

“The values here are still really good,” said Kathleen O’Donnell, principal broker at the O’Donnell Group Realty in Portland, Ore. “We are the least expensive city on the West Coast to live in in every respect, from dining to education to the cost of housing.”

These smaller markets also often offer a more casual vibe than big metro areas. And buyers from high-priced markets like California, Illinois and New York have noticed. 

“We are attracting a lot of people out of the Northeast and the Midwest due to the quality of life and the cost of living here,” explained Jessica Babington, broker-in-charge at Trump International Realty Charlotte in Mooresville, North Carolina. “Also our tax base is extremely low, so it’s causing a lot of people to look our way.”

Luxury homes in these regions are often far less expensive than similar houses in larger markets, with more features and amenities. Each area differs, however, so it’s important to find an agent who is a specialist in high-end homes there.

Buyers can ensure they are working with a trusted agent by ensuring they have industry designations that set them apart, such as the Certified Luxury Home Marketing Specialist (CLHMS) from the Institute for Luxury Home Marketing (ILHM).

Agents with this special distinction have completed hours of training and must prove experience serving buyers and sellers in the upper-tier. 

“Every luxury market is so local and so different,” according to MaryAnne Simmons, a broker with eXp Realty and based in Lexington, Kentucky. “You have to work with someone experienced.”

More for Less

Buyers can often purchase homes that are larger and with more amenities in smaller markets, added Ms. Simmons, who is also licensed to sell real estate in Florida and the Carolinas.

“You can get a heck of a house for $1 million in Kentucky,” she said. “The same house could cost $5 million or $6 million in another market.”

The example she gave had more than 7,000 square feet over several floors, with ample outdoor space. It also featured a great room with 20-foot ceilings, oversize windows and French doors, high-end finishes, top-of-the-line appliances, four fireplaces, an outdoor kitchen and firepit and a three-car garage.

Lexington has long attracted wealthy buyers with equestrian interests, Ms. Simmons noted. But her clients often have family in mind when they’re shopping for a second home. 

“Many people buy to be near children and grandchildren,” she said. “And they want space to host them.”

That’s particularly true in places like Naples, Florida, where Ms. Simmons also regularly represents buyers. Her clients look for investments that can evolve with them, starting out as vacation homes that may serve as a rental and eventually shifting to a postretirement home. 

On the east coast of the Sunshine State, buyers are attracted to the slower pace and the family-friendly communities of Broward County. For example, prices in Fort Lauderdale are less expensive and traditionally less volatile than in Miami, according to Debbie Wysocki, an agent with Florida Luxury Homes Group, part of Keller Williams, Fort Lauderdale.

“Luxury condos have been overbuilt in Miami, which has brought prices down,” she said, adding that Fort Lauderdale has not seen that pace of development. 

Ms. Wysocki also pointed out that homes in Fort Lauderdale recovered faster after the economic downturn in 2008. 

“Clients who took advantage of price opportunities then saw prices rebound in 12 to 14 months,” she said. 

It’s again a buyer’s market for luxury homes, with a large selection of homes available for more than $3 million, Ms. Wysocki noted. Although political and economic uncertainty may slow some buyers down, others could get good deals on property for acting now.

Luxury Lifestyle

Many buyers are looking to escape high tax liabilities and natural disasters when they look to real estate in Arizona, according to Jordan Ayan, an agent who leads the North Scottsdale Luxury Real Estate Team at the Lifestyle Collection, under Keller Williams Realty in Arizona. 

“We’ve got buyers coming from two major areas right now, California and Illinois,” he said. “California buyers are coming here because they want to escape high taxes, the lack of government control over issues like homelessness and the wildfires. For my Chicago clients, it’s mainly the taxes.”

Arizona has become so popular that inventory is at an all-time low, Mr. Ayan noted. Not only do buyers save money, they appreciate safety and the way of life there. 

Many new residents work remotely, he added. Others are moving operations to the desert, where there’s a pro-business government and plenty of land on which to build and expand.

“We have a lot of businesses moving into the area,” Mr. Ayan explained. “And when I say businesses, I mean big businesses like insurance companies and medical companies that are bringing a new population here that is demanding good housing.”

Charlotte, North Carolina, has also attracted myriad businesses in the past few years, Ms. Babington said. That’s not only causing property values in the city to jump, but in surrounding towns like Mooresville, which is about 15 minutes away on Lake Norman. 

Both areas are seeing new projects under development to accommodate the needs of the influx of new residents. And they predict that growth will continue in these smaller markets, even as some large markets experience a downturn. 

“This is a market that’s poised to be very strong in the future,” Mr. Ayan said.

And although value and a better standard of living are strong draws, they aren’t always the most important reasons.

“People come because the opportunities are plentiful,” Ms. Babington explained. “They end up falling in love with the community and the people, and that’s what keeps them here.”

Filed under: Headlines by Alec Reimon
No Comments »