Deals Are HERE for These “Thawing” Real Estate Markets

Dave:
For the past few years, we’ve all heard that the market has been stagnant, but maybe now as we enter 2025, the market isn’t actually as frozen as a lot of people think. So the question is, which cities are starting to thaw and why does it matter for investors? In today’s episode, we’re exploring emerging data that shows how some markets are beginning to heat back up, right when everyone else thinks real estate is on ice. Hey everyone, welcome to On the Market. I’m Dave Meyer, and today we got a special episode talking about thawing markets where potentially there are better deals starting to come on the market. We’re talking about gems that might be overlooked in markets that have really strong fundamentals to talk about this today we have our in-house data guru, Austin Wolff, who’s been digging into the numbers to find these hidden opportunities. Austin, great to have you on the show. Thanks for being here.

Austin:
Great to be here.

Dave:
Thank you for doing all the homework for Kathy and I so that we can just benefit off of all of your great research. We appreciate it.

Austin:
You’re welcome.

Dave:
And as I alluded to, we also have Kathy Fettke joining us today. Kathy, thanks for being here.

Kathy:
Oh, this is one of my favorite topics. I’m excited.

Dave:
Thawing markets is your favorite topic.

Kathy:
Just markets. Okay. Just hot markets. Where the best place to invest is. You know, I’m all about it.

Dave:
Yeah. Well good. We’re gonna have a fun conversation. And Henry Washington was supposed to be with us, but he is on a cruise celebrating his 10th wedding anniversary. So congratulations to Henry and his wife on their anniversary. Some well deserved time off, and uh, we’ll have him back on the show soon. But the plan for today is, as I said, Austin’s done this research. He’s gonna walk us through the data and then each of us is going to pitch a market we think is in the midst of thawing out a little bit and might have some new opportunities, but have good long-term fundamentals. ’cause as I think Austin’s gonna tell us, there’s kind of this interesting dynamic going on in the market right now where some of the markets that have really good traditional indicators of strong markets are the ones that are quote unquote thawing, where there’s more deals on the market, which can be a little bit confusing, but we’re gonna help you make sense of all of it here today. So let’s jump in. So Austin, what has been the market situation where it’s felt so stuck and difficult to find any momentum and like what has led to that situation?

Austin:
Yeah, historically, over the past two years, active listings have been down across the board in the United States. But what’s interesting is in November of 2024, which is the most recent, uh, data set that, that I have access to, thanks to realtor.com, active listings is actually the highest it’s been since January of 2020, which is before the pandemic. So what I think that that might mean is perhaps more buyers have started to overcome this sticker shock of the high prices and the high mortgage rates, and also that throughout time people just have to move due to life events. So, uh, I think that this rising inventory signals that more people are ready to sell and, and sellers most of the time are also buyers. So more people are ready to sell and then buy or sell and then move. So I think that activity is starting to heat back up again, uh, across the board. And of course this can change from market to market, which, which we’ll get into, but I think across the board activity is up, which is, uh, generally a good thing for the economy and, and for investors as well.

Dave:
Well, just to be clear, when you say activity is up, do you mean sales activity or new listing activity?

Austin:
Sales activity is slightly up, but right now active listings is really the indicator that I’m looking at, which, which can lead to higher sales, but not necessarily.

Dave:
Okay, because I, I think the key thing here though is when we talk about some of these markets is that active listings can go up because there’s more people selling or because there’s less people buying mm-hmm . Right? That’s right. So I just, right. Just wanna make sure when we’re talking about these markets that, and everyone listening should pay attention to that because just think about that for a minute. Like, active listings just measures how many products are on the market for sale at any given point, but you can get that by more people choosing to list. Or you could have the same amount of people listing, but just less people are buying. So more things are staying on the market. So when we talk about thawing, I wanna make sure that we draw these distinctions between like why things are, are thawing and what’s really driving some of the behavior in each of these individual markets. Kathy, just before we get into some of the, you know, methodology here of how we’re gonna analyze these things, just anecdotally, in your personal experience as an investor, are you seeing any shift in the market?

Kathy:
We actually saw a bit of a shift in the amount of time it takes to rent a property.

Dave:
Interesting.

Kathy:
Two of what has been the hottest markets in North Dallas and in Palm Beach of Florida, it took about three, or it might’ve been four months to rent our property out, but it was over the holidays and during an election, you know, so there was a lot of uncertainty at that time, but that is surprising to me that in these areas that would just lease up just, I don’t know, six months ago or a year ago so quickly that it took a little bit longer. So I don’t know what that’s about. Maybe there’s just more inventory that needs to be absorbed in these areas, but that surprised me a little bit.

Dave:
That raise a good point. ’cause so far we’ve been talking about inventory as it refers to homes for sale, but also inventory in terms of rentals, uh, is also hugely important here. Um, so that’s a good segue. Austin, when you did this analysis and did sort of looked into the data, what were you looking at? What were the variables that you look for when you’re trying to find a market that may be loosening up a little bit so that there’s more deals than for investors to seriously consider?

Austin:
Yeah, what I’m specifically looking at is days on market. That’s number one. Number two, these listing sites that offer this data, Zillow, redfin realtor.com, they also have this other metric, uh, which I find very interesting. It’s essentially average page views per property in a given market. Hmm. So for example, there, there’s a small market on here, Oshkosh, Wisconsin, and they don’t have a lot of properties for sale relative to Dallas, for example. But more people are viewing properties for sale in this smaller market relative to the amount of properties for sale in the market than they are in Dallas. So one way you can think about that is, okay, the amount of people that are interested in the buying the property versus the amount of properties for sale, that’s another way that these listing sites measure demand for a given market. So again, just to wrap that up, I use days on market as well as, uh, realtor dot com’s demand score, which is average page views per property just to measure demand across all the markets in the United States.

Dave:
Yeah, it, it’s something that I, I’ve actually seen just monitoring a couple markets right now that we’re starting to see days on market go up in a bunch of different places. And personally, I actually have been noticing it mostly for two to four units, which feels like the first time in a really long time where I’ve been able to see two to four units and think about it for more than like a minute. Whereas single family homes, at least in the markets I’m looking at, are still extremely hot right now. I don’t know, Kathy, if that’s, that’s something you’ve observed as well, that might just be in the markets I’m in.

Kathy:
Yeah, I mean it’s, it’s always changing, right? I mean, right now I’m in Los Angeles County and we’re gonna see a big change, right? In days on market, it was a little bit slow. And I think that’s gonna change overnight because what 14,000 people are now gonna be looking for a place to live. So things, things are always changing, always in flux. It’s so important to have boots on the street to understand really what is going on. I know when I started investing, I would look at the hot markets list and be like, Ooh, I wanna, I wanna go there. I wanna invest in the hottest market in the US and while I still do, you know, we need to look at what hot means to us as investors.

Dave:
Yeah.

Kathy:
Right. So if you’re looking at the hottest market where sales are happening the fastest, well that’s, that’s a great place to be a real estate agent, right? You’re gonna have lots of activity, might be a great place to be, a wholesaler or a flipper might not be the best place to be a buyer, right? ’cause you’re gonna have lots of competition, you know, you also don’t wanna be in a market where nothing’s selling, right? That’s really not great for anyone. So kind of finding that balance of hot but not too hot, just nice and warm . Totally. Yeah.

Dave:
I mean, I, I think about that a lot. You know, I invest in a couple of long distance markets now, and I don’t want to be in a place where things are only on the market for a couple of days. Yes, you’re probably gonna get more appreciation there, but that doesn’t work for my strategy. I don’t have an advantage in that market. I have a disadvantage in that market. And so it doesn’t work very well for me. I’m here right now visiting a market where I put out an offer two weeks ago and they let me come visit it before, before signing an offer. Like that’s how it used to be. That has, it’s been quite a long time since I’ve been able to do something like this. Um, but for me as an out-of-state investor, like that’s the kind of market I look for. And so just keep in mind, we’re talking about thawing in terms of deals opening up.

Kathy:
Yeah.

Dave:
It doesn’t necessarily mean that they’re gonna be super abundant. It doesn’t mean that the market is ice cold. It just, at least to me means that there’s some semblance of balance in the market where buyers and sellers do what they should be doing, which is having some dialogue and that there’s a balance in any sort of negotiation or discussion of price.

Kathy:
Yeah. Like one example is the number one market on this list is Springfield, Massachusetts. And, um, it’s, it’s hardly anything on the market. And so if you’re, again, if you’re a seller, well that’s, that’s really in your favor. If you’re a buy and hold investor, like you and me, um, then you, then you’re looking at tax institution. Yeah. That’s fun to say by the way, not Massachusetts, but Tax Institution. Um, it, it’s a, it’s a high it tax state, so it’s a tough place to do business. And when you’re in the long term buy and hold, you’re doing business for a long time in that state. So, and again, there’s so many more factors to look at and always as usual, know your strategy first.

Dave:
Well, yeah, that, that’s sort of why I wanted to make this episode. I think it’s such a smart concept that Austin came up with here, is because the cool part of what’s happening in the market is that some of these markets, I mentioned this a little earlier, but some of these markets that are quote unquote thawing are really good buy and hold markets. And to me, this creates this really interesting opportunity because I can now have leverage in conversations. I can be more patient as a buyer, but I still have a lot of confidence in some of these markets to be growing three years from now, five years from now, 10 years from now. And for me personally, I don’t really care if it’s the fastest growing market in 2025 or in 2026. I want it to be in the top quarter of fastest growing markets over the next 10 years consistently. Like that’s what I would look for. And it feels like even though things are expensive and financing costs are high, that there’s more deals in those types of markets right now than there was a year ago. And that gets me fired up. So Austin, if you think sort of similar to my premise like that in a market that is more of a buyer’s market, which means prices might not go up immediately, that I, I am personally think that those offer some opportunities right now. Like how would you go about measuring that?

Austin:
Two things. Number one, I would measure days on market. And number two, the listing sites, they offer the average page views per property. So how many people are viewing these actual properties for sale relative to the amount of total properties for sale? And we see in the Midwest and uh, the North Atlantic that the amount of page views per property is, is higher there than it is in the south and the southwest. And what I find interesting is there are a lot of markets in the south and southwest that have really strong fundamentals. Uh, there’s markets in Florida, markets in Texas, we have Phoenix as well that have seen a high number of days on market and low page views per property. They are essentially buyer’s markets right now, which is really good for us because again, a lot of great markets with great fundamentals as of right now have started to become buyer’s markets. It might be a little bit easier now to find deals in these good markets with these solid, uh, underlying fundamentals.

Dave:
Yeah, I, I agree. I think my, the caveat, I don’t know, maybe I’m wrong about this, but I would want there to be higher days on market. Not because there’s a reduction in demand, but because there’s an increase in supply. I don’t wanna see a decrease in demand in, in any market I represent if there’s an increase in supply, to me that’s just the market stabilizing. We’ve had such low supply for so long that seeing an increased supply, that’s just normal. That’s just going back to healthy. But if I start to see supply going up and demand going down, that, that would worry me a little bit. Personally, I don’t know if you looked at that at all, Austin.

Austin:
Yeah, I took supply into account as well, uh, when I was coming up with this, this list of buyer’s markets with, with good fundamentals. First of all, all of these markets did have an increase in supply as well as an increase in the number of households and an increase in the number of jobs. And so we have those good underlying fundamentals there. I also wanted to make sure that, uh, supply wasn’t outpacing demand either, which there could be an argument made that, that actually might be a good thing for investors maybe. But I, I didn’t think so because if supply starts to outpace demand, it might be a while until you see your property appreciate. So this ruled out Austin, Texas for me, as far as this analysis went, just because the growth of supply is outpacing the growth of demand. So, uh, that, that sort of took Austin off the board. But, you know, we have places like Nashville and, and Dallas on this list that are right now buyer’s markets, but still have really strong household growth at the moment. So those, those might also be good picks, uh, for you as well. If, if you’re looking to invest in, in those kinds of premier, good fundamental markets.

Kathy:
And my company at Real Wealth, we have sort of our finger on the pulse of what investors are doing as, as does BiggerPockets, right? That, you know, you get feedback on what people are doing. And we get so much feedback in the number one city where people still have been buying is Dallas. And I say that every time and it’s I’m sure getting very boring, but you know, it’s just got those fundamentals right, where we know that there’s strong job growth, we know that there’s strong population growth, but as Dave said, there’s been a lot of new supply coming online to try to keep up with all of that. So as long as you know that it’s a buyer’s market, which means you have less competition, you can negotiate a better price in a hot market as far as fundamentals and, and the economy, but you have this, this blip, you know, where you get to get a little bit of a discount or at least you’re not seeing prices go up quite as quickly. The flip side is, like I said, it might take a little bit longer to rent

Dave:
Mm-hmm .

Kathy:
Because of that increased inventory, but if you’re looking over the long term, it’s gonna all work out. You know, I I I’m not upset that it took three months to rent my Dallas property because I know what’s coming and I know that this, uh, extra supply is eventually going to, you know, be absorbed.

Dave:
Yeah, I generally agree and have a similar philosophy, like buy a good asset now and place with high demand 10 years from now, you’re not gonna regret it. We are gonna dive into which markets are heating up right after the break, so don’t go anywhere. Welcome back to On the Market. I’m here with Austin and Kathy talking about thawing real estate markets. All right, enough methodology and philosophy here, Austin, lay it on us. What was the first market that came up using your calculations? What was the number one market?

Austin:
Yeah, I would say number one is relative. Uh, if we’re just looking at total job growth as as our benchmark number, Dallas, Texas would be number one speaking Kathy’s language. Yeah,

Dave:
Absolutely.

Austin:
Yeah. 12% job growth over the past five years is, is crazy, especially for a metro of that size. One of the largest metros in the United States grew at an, at an outstanding number, and right now it’s a buyer’s market, so it might be a good time to to get in there. Um, another market that I want to mention is, is Nashville and Phoenix. Relatively the same thing, greater than 10% job growth over the past 10 years. Right now it’s a buyer’s market. But then I went a step further. I wanted to see which markets we’re a little more affordable for, uh, let’s say the rookie investor, which markets had a median price lower than the national median of, of $420,000 that still had good fundamentals. They’re not gonna have as good fundamentals as Nashville or Phoenix or Dallas. So I sort of took the foot off the gas in terms of, uh, growth metrics while being able to trade off affordability.
There. We get metros like San Antonio, new Braunfels, we get Oklahoma City. There’s a market in Alabama called Auburn that I don’t know much about, but I think I’m gonna start researching more into it. And Bowling Green, uh, Kentucky, uh, just about an hour and a half outside of Nashville, which is also interesting that I would like to personally, uh, look at. But all of these markets that I just mentioned, they’re about $250,000 to about $300,000 in terms of their median price. You’re gonna get properties that are more expensive, less expensive, but these have still solid fundamentals. They’re growing, they have been growing and right now they’re currently buyer’s markets. So those ones are the ones that are most interesting to me at this current moment.

Dave:
All right. Well Kathy, I was gonna ask you, but I know you’re in on Dallas, but what do you make of some of the other ones Austin mentioned?

Kathy:
Yeah, you know, it was really funny because right in my own neighborhood, a Thousand Oaks was on there and Oxnard

Dave:
Really my eyes just like glaze over California when I’m looking at any of these

Kathy:
A hundred percent. And, but it was kind of like, I agree because when you have a big city like LA where it’s getting more and more expensive because there’s just not enough space to bring on more supply, it’s hard. So, you know, people have to move out into the suburbs. So if you compare LA to just an hour away, it’s still somewhat commutable difficult in la but it’s commutable. But I thought, you know, comparatively it is somewhat more affordable in Thousand Oaks, it might be a million dollars for a house instead of 2 million. The problem is, I, it’s California, like you said, and the wildfires terrify me. I live here, I own property here, and it’s, it is scary all the time. And now insurance is gonna be outta control. So even though it could make sense, it’s still not something I’m, I’m willing to do. But if you are concerned about that, we’ve talked about this on past shows, then you wanna probably be in the Greater Lakes area because uh, when I interviewed the CoreLogic person in charge of, uh, of climate change, he said that was the least affected. And I don’t think anyone in Cleveland’s gonna be upset if it gets a little warmer there. Right, right.

Dave:
, I mean, I’m in the Midwest right now is literally one degree. This morning when I was walking around, we could use another degree up here. I’m not, not to make light of the situation, but yeah, I get what you mean. .

Kathy:
So, so there was another, um, city on here that we just reviewed, just vetted it, went through a really, really tough vetting process. And it was Fort Wayne, Indiana because it’s just outside of, uh, Indianapolis, it’s close to Michigan. There’s not been a lot of builders coming in to bring in supply, but there is demand. And so we are working with a builder there who’s, you know, it’s gonna be hard to buy existing because there’s not enough there. But if you could work with a builder who could bring on new supply, then it’s an opportunity. So we’ve just looked at that city and I was happy to see it was on this list.

Dave:
I was researching Fort Wade myself like three weeks ago. It’s a good market.

Kathy:
Yeah,

Dave:
There’s a lot of fundamentals there. Yeah. Well, what are you gonna do? Build to rent?

Kathy:
Yeah, to build to rent. Um, that’s kind of been our model and some of these areas where there aren’t other builders. And, and like I said, it’s some of these Midwest towns. We have bought so many older homes in all over Ohio, Detroit, you know, Indiana and Pennsylvania for sure. You’ve just gotta know when you buy an older property, you’re gonna have higher CapEx. That’s, that’s the bottom line. It’s just old stuff, right? It’s like the difference between buying an old car and a new car. You’re gonna have more problems. And I’m just at a stage in life where I don’t want those problems. Build me a new one. My tenants are gonna love it too. We’re not gonna have to talk to each other , right? They’re gonna have a nice house that works and I’m gonna get my income. That’s my thing. Yeah,

Dave:
I, I agree. Even, you know, in Denver bought a lot of old properties, they’re, they can be a pain in the butt, but I would caution people against looking just, this is a tangent, uh, at the year built, but really the year the thing was fully remodeled. Yes. Like I was in one earlier, today is 1890. Someone bought in 2002, gut rehabbed it. So really, you know, it’s, it’s a different situation but it, that is a hundred percent the challenge in the Midwest is, at least for me, is trying to find something that’s gonna be relatively low maintenance for, for my style of investing.

Kathy:
I wanna give one tip there. One tip on renovation happened to us in Chicago where uh, we bought properties that were renovated but they weren’t done with proper permits. So the new owner, again, this is Illinois, this is Chicago, it may not be like this anywhere. Even though the new buyer came in and bought it and didn’t know about that.

Dave:
Yeah, you have to remedy it.

Kathy:
They had to remedy it, it’ll them a lot of money. So if you’re gonna do that, just check with the city that it was done with permits.

Dave:
We still have a few more markets to cover. So stick around. We will wrap up our discussion and share some tips for turning data into real investment strategies right after this. Welcome back to on the Market. Let’s jump back in. I’ll throw out one that the days on market has gone up like quite a lot over the last year, 15 days. So it’s now up to 64 days on market, which feels so ridiculous ’cause like that’s a totally normal amount of time for something to be on market, but not the last five years. But 64 days on market on Austin’s ranking of hotness, it’s towards the bottom. So this is like if you were just scrolling through the list, you’d come to the city that I think has like almost everything going for it. I don’t know if you guys have looked here, but Savannah, Georgia I think is like one of the strongest fundamentals markets out there.
The median home price is 343,000. It’s a great price in a city that I’ve never actually been, but from what I hear is an excellent quality of life is a really cool place. You look at some of the stuff like the renter price ratio is nearly 0.6, which in today’s day and age is like a reasonable probability of getting cash flow. You look at the job growth, it’s solid. You look at household formation, it’s above 12%. The unemployment rate is 3%. Like there’s so much good fundamentals in this market and you know, I have a lot of fear about Florida and the Gulf Coast and although Savanna does have some hurricane risk, it’s not in the Gulf, which to me is where we’re seeing the most risk. It’s not right as close to some of those high risk weather and climate areas. So I really like savanna. I’ve always been interested in the market and seeing it sort of fall down in terms of quote unquote hotness to WA now where you have some ability to negotiate, guess we genuinely interested in a market like that?

Kathy:
Oh yeah. I think we have a new team now in that market. Again, it’s the same thing I just said. You’ve got a city like Atlanta that 20 years ago that was a market that was like cheap. You were buying properties there for a hundred thousand dollars in the city and or less, you know, during the downturn was like $30,000 properties and now it’s expensive. So, you know, people move out, they move out into the suburbs when cities get too expensive. So looking around these big cities and into, you know, within 20 minutes from work is usually the best. But people are willing to be 30, 40 miles out now for affordability, especially if they don’t have to go into the office every day. You know, if it’s three or four days a week, they could do the commute.

Dave:
All right, so those are just a few of the cities that we’ve picked outta this list. We will put this in the BiggerPockets resource hub. So if you wanna check out the list that Austin’s put together, go to biggerpockets.com/resources and we’ll make sure that that’s up there for you. Or we’ll put a link in the show description below. But before we go, Kathy, lemme just ask you, you know, in these types of markets, what’s the move like, you talked a little bit about new construction, that that’s one strategy, but in these other markets that good long-term fundamentals maybe better ability to find deals right now, what do you advise investors to look for other than like built around or new construction?

Kathy:
Well, again, if you’re buying an older home or an existing home, you just have to make sure that you understand the age of everything in that home and plan for it. So if you get a great deal on a property because you negotiate with a seller and say, I know this roof is going to be replaced in a few years and I know this HVAC is too, so therefore I want this discount because I’m gonna have to do it. That’s negotiating and you can’t do that kind of negotiating in a hot market. That was the thing that was so hard to watch. New investors, not even in some cases be able to do an inspection. You know, it’s like, no, you know, we’ve got a hundred offers on this, no inspections. And then you’re just dealing with something you don’t understand. So I have no problem with buying older homes.
As long as you understand the condition of everything in that property, what it’s gonna cost you to replace it. ’cause you will have to replace it eventually. Will that extra expense come back to you in some way? Is, is the value of the property going to go up as a result? Is the area going up in value? And if not, don’t do it. You find out you’ve got $50,000 worth of capital expenses coming in the next five years and this is not an appreciating market and you’re paying, you know, you’re not getting enough discount. That’s just, that’s not a good deal.

Dave:
Yeah, absolutely. And I think especially in these kinds of markets, to me I would wanna find B plus a kind of neighborhoods.

Kathy:
Yes. Yes.

Dave:
’cause there’s increase in supply. What usually happens is the areas that are, you know, secondary, tertiary, they don’t have to be bad neighborhoods, but they’ll take longer to recover. Um, once things start to come back up, if you can find something where you can negotiate in a really prime neighborhood, it’s really, I think it’s low risk. Nothing is without risk, but I would not be concerned about a market quote unquote cooling. If that means that I get to negotiate for an a neighborhood. Like to me that’s kind of the best

Kathy:
Situation. Yes.

Dave:
Because I’m waiting five to 10 years and I have very little concern that my properties are gonna be in demand 10 years from now. Whereas sometimes in some of these markets where they’re building new subdivisions or you’re just looking for a deal or a cheaper deal, you buy somewhere that could appreciate. But it’s more of a gamble in my mind, especially if you’re an out-of-state investor. Like for me, when I go to a new market, I’m not as big of an expert as everyone. Like my agents are great, my property managers are great, but I wanna just take the layup, like find me something that’s super easy.

Kathy:
Yep.

Dave:
That’s just like, I know this is great and I’m not gonna have to worry about it. That’s my best advice.

Kathy:
You don’t have to be an Olympic champion. That’s exactly how I’d use Austin’s report is look at what areas are, are normally hot, but they’re loosening up. There’s more inventory and now you can get into a better neighborhood. Yeah, yeah, a hundred percent. That’s, that’s how you use the

Dave:
List. Alright, well Austin, thank you so much for doing this research. Again, you can check it out on biggerpockets.com/resources. And Kathy, thank you so much for coming and lending your expertise for both of you both in the LA area. Very glad to hear that you’re both okay and, and are, um, you know, sympathy and hope goes out to everyone who was impacted by, uh, all the terrible fires in their area. So hopefully you and your neighbors are on the, the road to recovery.

Kathy:
We are. Thank you.

Dave:
And thank you all so much for listening. We appreciate you and we’ll see you for another episode soon of on the market.