Housing Prices Heating Up: What Landlords Need to Know

[Selina Gray]

The housing market never ceases to surprise us. December marked a big moment: for the first time since mid-2022, home prices increased year-over-year in all 50 of the largest U.S. metro areas. Yep, every single one.

Prices jumped by an average of 6.3%, with the national median hitting $427,670. But the real fireworks were in places like Cleveland, where prices soared 15%, followed by Milwaukee (14.5%) and Philadelphia (14%). Meanwhile, Florida—once the darling of pandemic homebuyers—saw much smaller gains. Tampa barely moved the needle with a 0.5% uptick.

So, what’s driving this? Two big factors:

1. A Tight Inventory: Fewer homes for sale mean buyers have limited options.

2. Buyers Adjusting to Higher Rates: After a year of climbing mortgage rates, people seem to be saying, “Well, this is the new normal.”

But here’s the kicker for landlords: many potential buyers are choosing to rent instead. Why? Renting is still the more affordable option in many areas, especially as new rental supply hits the market.

Spotlight on the Midwest

If you own rentals in the Midwest, congrats! Cities like Cleveland and Milwaukee are seeing demand heat up, even as local buyers grapple with affordability challenges. This could be your moment to shine as rental properties become the go-to choice for those priced out of buying.

Meanwhile, in Florida…

Things are cooling off. Tampa, Orlando, and Jacksonville saw modest price growth, with a mix of new home builds and cautious buyers keeping the market steady.

What Does This Mean for You?

Whether you’re eyeing new investments or managing your existing properties, here are a few takeaways:

• Keep Tabs on Local Trends: Cleveland’s affordability edge isn’t what it used to be, but it’s still attractive to out-of-staters. Meanwhile, places like Florida offer stability with slower price gains.
• Leverage the Rental Market: With buyers on the fence, renters are your bread and butter. Position your properties as the perfect solution for those waiting for their “dream home.”

As always, keep your investment strategies sharp and your coffee sharper. The housing market may have its quirks, but it’s still full of opportunities for savvy landlords like you.