Amidst 2024’s record-high home prices and mortgage rates to match, real estate investors found opportunities in metros across the Northeast and Midwest that managed to remain relatively affordable.
Realtor.com released its list of the Top Markets For Investors in 2024, using listing and public data for the 75 largest U.S. metros. The report analyzed which markets had the best combination of high listing viewership, low home prices, significant price growth, growing inventory, and low rental vacancy.
Topping the list was Dayton, Ohio, where investors made up 13.7% of buyers in the first quarter of 2024, about one percentage point lower than the national average. The metro saw prices below the national average, though climbing, over the past year. The rental vacancy rate in Dayton averaged 4.7% in the first two quarters of 2024, far less than the national average.
“The top investor markets each offer investors a unique combination of advantages,” said Hannah Jones, senior economic research analyst at Realtor.com. “But in general, these are affordable markets that see considerable buyer demand and low rental vacancy.”
On average, the top 10 investor markets drew in nearly twice the listing viewership than the average listing on a national scale over the past year. In addition, home prices were an average of 21.7% lower in these markets. Rental vacancy averaged 4.8%, compared with 6.6% across the U.S. On average, 13.8% of buyers were investors in the top investor markets in Q1 of 2024, one percentage point below the national average, but 4.4 percentage points higher than 2019's average.
“Home prices hovered near record highs and mortgage rates climbed to multi-decade highs over the past year, leading to less-than-rosy market conditions for investors in many markets across the country,” Jones pointed out. “However, some low-priced metros in the Midwest and Northeast have seen sustained buyer demand and still-climbing rent prices, creating opportunities for investors.”
Investor activity was nominal during 2023 after more than doubling during the pandemic, then picking back up this year.
Rounding out the top five were Rochester, NY, which boasted a 14.7% investor share in Q1; Cleveland-Elyria, OH – 17.4%, Pittsburgh – 13.7%, and Knoxville, TN – 14%.
Jones noted in her report that only one Southern market made the list.
“Investor activity and homebuyer demand led to falling inventory and sky-rocketing prices in the South during the COVID-19 pandemic,” she explained. “Over the past few years, buyer demand has softened due to affordability challenges, and inventory, including rental inventory, has climbed. As a result, once-popular investor markets in the South are considerably less appealing.”
Western markets have also remained challenging for investors through 2024 due to higher-than-normal home prices. Two exceptions are Fresno, CA, and Albuquerque, NM, which ranked 25 and 33, respectively, on the list.
