For those who wanted to buy an investment home, Texas was the place to be in the first quarter, according to a report from HomeVestors, the We Buy Ugly Houses® people, and Local Market Monitor.
Dallas-Plano-Irving, Texas topped the list, with San Antonio, Texas coming in second. Although Grand Rapids-Wyoming, Michigan fell to third, their numbers remain strong. Orlando, Florida follows in fourth and Atlanta-Sandy Springs-Marietta, Georgia rounds out the top five.
"Good job growth is driving prices higher in our markets, mainly in business services but also tourism (Orlando, San Antonio), finance (Charlotte, Dallas) and manufacturing (Grand Rapids),” said Ingo Winzer, president and founder of Local Market Monitor.
However, price increases could change the dynamic in future years.
While the prices of homes have now recovered from the recession in Texas, Florida and California, the report predicts some markets in these states will be over-priced in another year - with the risk of a boom and bust down the road.
"Over the last year, we have seen an increase in population and job growth,” said David Hicks, HomeVestors® co-president. “However, housing prices are increasing significantly faster than incomes. As a result, home sales are slowing, limiting the housing demand. Therefore, investors need to be careful where and when they invest.” Winzer concurs saying, “Prices are still at or below the income price - and a couple of years away from being too high. Yesterday's opportunity becomes today's risk once prices move higher than they should. This is especially true for investors in rental properties and especially now that the deep discounts at which properties could be bought have largely disappeared.”