The notorious Colorado home where Chris Watts strangled his pregnant wife to death before murdering their two young daughters has finally hit the market—nearly four years after the unthinkable crime.
Offers are due on Tuesday on the five-bedroom, four-bathroom home in the Denver suburb of Frederick priced at $660,000. The listing follows a failed foreclosure sale and years of a legal sort of limbo. The family of ShanannWatts, Chris Watts’ wife, put a $6 million lien against the home that any future owners could have been forced to assume. That was enough to deter any potential buyers previously.
However, Chris transferred ownership of the home to Shanann’s estate through a quitclaim deed dated March 25, according to property records. The deed listed Shanann’s father as a representative of the estate.
The murder of Shanann and the couple’s children—Bella, 4, and Celeste, 3—on Aug. 13, 2018, shocked the nation. It was also the subject of the 2020 Netflix documentary “American Murder: The Family Next Door.”
After their deaths, multiple liens were put on the property. Shanann’s parents, Sandra and Franklin Rzucek, won a $6 million wrongful death lawsuit against their son-in-law. That debt was applied to the home in the form of a lien. The local homeowners association also has liens on the property for unpaid dues. Any new owners could have been responsible for those debts, which were attached to the property.
The Watts also owed about $350,000 on their mortgage. They purchased the home for just under $400,000 in May 2013, according to Realtor.com® data.
“Shanann’s parents, who are the line holders, can release the lien at the closing,” says Denver-based bankruptcy attorney Clark Dray, who works with foreclosures. He is not affiliated with the property or the sellers. This means new buyers wouldn’t have to worry about owing the parents $6 million.
Dray expects the proceeds of the sale will be used to settle debts.
“The mortgage portion will get paid off, the HOA will get paid off,” he says.
The nearly 4,200-square-foot home is being sold as is, according to the listing. To discourage looky-loos who just want a peek inside, buyers are required to submit funding commitment letters from their lenders for a minimum of $660,000. And showings are limited to buyers with accepted bids who must be accompanied by their real estate agents.
The address of the home was also altered from Saratoga Trail to Frederick Dr. on the listing.
“I wish them luck, but I would put it down as the family being optimistic,” says real estate appraiser Randall Bell, CEO of Landmark Research Group. He specializes in real estate affected by tragedies or disasters. “These are just tough sells. It’s a gruesome crime, and it’s not where a lot of people want to go home and relax with that kind of history.”
Compounding the problem, the home continues to attract a lot of attention. In September, neighbor Chuck Burr, who lives two doors down from the Watts home, told Realtor.com that multiple cars drive by each hour on weekends. Some folks stop and take photos, while others have attempted to break in, prompting calls to the police.
The unwanted notoriety is “annoying and it can go on for years,” says Bell.
Chris Watts killed his pregnant wife during an early morning argument. He had told Shanann he was having an affair with a co-worker and wanted a divorce. She threatened not to let him see his daughters. He strangled her and then smothered their two daughters to death in the family car.
Shanann’s body was found buried in a shallow grave at Anadarko Petroleum, Chris’ work site. Their two daughters were discovered in oil tanks at the site.
Chris initially went on TV begging for his family’s return. But after he failed a polygraph test, he eventually confessed to the murders. He is now serving multiple life sentences in prison.
Spring heat waves have already shattered records across many parts of the country this year—weeks before summer’s even begun. It’s little surprise that, after two-plus years of living through a grueling, global pandemic, many Americans are chomping at the bit to trade quarantine lockdowns for cool, seaside breezes; back-to-office dreariness for sun and surf euphoria; and homemade sourdough for fresh fish tacos with a squeeze of lime and Dirty Shirleys on the boardwalk. What’s not to love?
Now just imagine that this fun-filled escape isn’t limited to a weekend or two away at the shore. During the worst of COVID-19, many wealthier Americans flocked to the nation’s beaches in search of their own real estate slice of sand and sea, inflating prices along the way. But here’s the news: There are still spots where regular folks can find deals on great beach retreats, whether as a primary home, a vacation abode, or an awesome investment. They do exist. You just need to know where to look.
That’s where the data team at Realtor.com® comes in. We prowled the coasts to find the nation’s most affordable beach towns where buyers can live the dream—without draining their bank accounts.
“The U.S. has over 95,000 miles of shorelines. But most people, when they think of beach towns, they focus on a few dozen destinations,” says George Ratiu, manager of economic research at Realtor.com. “However, there are a lot of hidden gems, which offer all the benefits of seaside living at a much lower price.”
To figure out the places that boast that perfect blend of affordability with desirability, our data team looked at the median home list prices of more than 1,300 towns located across America’s coastlines from May 2021 through April 2022. They all had at least 30 homes for sale in April, not including pending transactions.
We also wanted to make sure these places were more than just a strip of sand and surf. So we zeroed in on the towns with fun things to do outside the water, too, including restaurants and bars and arts and entertainment venues, using U.S. Census Bureau data.*
Finally, we made sure that each of these towns was actually on the water and not just nearby. We also limited our list to just one place per state to ensure geographic diversity.
You’ve been through an awful lot over the past couple of years. It’s time to hit the beach already! Let’s dive in.
Gangsters (“Boardwalk Empire,” anyone?), former President Donald Trump, and casinos are probably the first things that come to mind when folks think of Atlantic City. While many of those gambling institutions had been struggling for years, they’ve been raking in record profits since COVID-19 restrictions have started winding down—which most likely indicates there have been a whole lot of people coming to town.
Those aforementioned notions, plus the devastation wrought on the city and boardwalk during Hurricane Sandy a decade ago, are probably why Monopoly City offers far more affordable home prices than other Jersey Shore destinations. However, those lower prices have been drawing in an increasing number of new residents who want to enjoy the sandy beach and coastal breezes along with the plethora of restaurants, entertainment venues, and outdoor activities in “America’s Playground.”
Prices in the Atlantic City metro, which includes the surrounding towns, were up 18.8% from April last year, according to the most recent Realtor.com data.
For just $95,000, beachgoers can get into this historic studio condo on the boardwalk or, for $310,000, this one-bedroom condo on the beach with views of the ocean and the sunsets over the bay. But these days, house hunters need to be decisive.
“The high-rises right by the beach are doing good” in terms of sales, says Nancy Vasta, broker and salesperson with Glen Cove Real Estate. “Now, you’ll see one condo left in each high-rise, where before you could go and see five or six.”
Since the start of the pandemic, there’s been a rush by buyers across the country to gobble up South Florida real estate.
In popular Palm Beach, for example, the average price of a condo exploded 52% in the first quarter of the year compared with just one year earlier, to a median $1.6 million, according to the Serhant South Florida Report. However, Deerfield Beach, located halfway between Palm Beach and Miami, still offers deals near the surf at a fraction of the price—as long as you move fast.
Older buyers can find some of the most affordable waterfront options, including this two-bedroom condo on the Intracoastal Waterway asking just $299,222 for 55-plus buyers. Younger buyers can also find their own bit of beach without breaking the bank, including this $400,000 one-bedroom condo right on the ocean.
Though the beach is surely the most significant draw to this waterfront town—which is why the homes closer to the Atlantic cost significantly more than the ones inland—there is still lots to do. Locals fish the pier, walk the boardwalk, hang out at a wide range of local bars, and dine at trendy new restaurants along with old classics like beachside seafood spot the Whale’s Rib.
This seaport city, which was the second-largest whaling port in the world back in the “Moby Dick” days, sits at the mouth of the Thames River (hence the name), which empties into the Long Island Sound. So it boasts a whole lot of waterfront property.
Water babies can find homes with a view starting in the mid-$100,000 range. For example, this two-bedroom condo is asking $149,900 while this two-bedroom condo with a seasonal dock space available (for a fee) is listed at $255,000.
Both are less than a 10-minute drive from Ocean Beach Park, a New England beach with sugary sand, a boardwalk, and, for those who are afraid of sea life, a pool. There’s an amusement park for the kids, plus plenty of restaurants, bars, and arts centers when your skin needs a break from the UV rays.
Just 40 minutes away from Southampton, in the notoriously exclusive Hamptons on Long Island, Mastic Beach doesn’t get the same sort of rich and famous resort crowd as its world-famous neighbor. But this working-class beach town has a lot to offer ocean lovers who can’t afford a multimillion-dollar “summer cottage.”
It boasts great Italian, Latin, and American restaurants, historical sites, parks, and, of course, a nice sandy beach (located just across the bridge).
It’s possible to buy a single-family house with waterfront views starting in the $200,000 range. Options include this $275,000 two-bedroom house with views of the Pattersquash Creek and docking available through Mastic Beach Property Owners Association. For those with a heftier budget, there’s this two-bedroom house on a canal with a dock right out the back door for $600,000.
Myrtle Beach has long been a busy tourist destination with millions of vacationers flocking to its shores, golf courses, festivals, and growing arts scene. The boardwalk, amusement park, and other entertainment are popular summer draws as well. But the area is becoming a popular place to call home, too.
In fact, U.S. News & World Report ranked Myrtle Beach the fastest-growing city in the U.S. in 2021–22. A wide range of new residents, from retirees to remote workers, have been lured to what some still refer to as the “Dirty Myrtle” by the mild weather, low taxes, and affordable homes. (The nickname is possibly due to Myrtle Beach’s higher than average crime rate.)
There are tons of waterfront homes to choose from, whether buyers are making a full-time move or seeking a vacation rental such as this two-bedroom condo on the market for $289,900 with killer views of the ocean or this historic five-bedroom beach house with views of the ocean and a pier from the front porch for $595,000. Yes, please!
This is not an error. Southern California does, in fact, offer affordable homes right near the beach. There is just one small caveat: Buyers must be 55 or older.
Leisure World, a gated retirement community located just 12 minutes from the sands of Seal Beach, offers serious deals, including this two-bedroom condo with an expansive patio for $299,000 and this one-bedroom condo on the community’s lovely greenbelt asking for $175,000.
“If you are over the age of 55, it’s a great opportunity,” says Melinda Elmer, a Realtor® with Century 21 Masters. But the town overall “is not necessarily cheap.”
Those special deals skew the data for the entire beachside community. Buyers under the age of 55 must expect to spend significantly more, probably close to $1 million, for a stick-built home. However, it is possible to find manufactured and mobile homes for much less, including this two-bedroom home for $455,000.
This Gulf Coast tourist destination is known for its clean beaches, fantastic fishing, and world-class birdwatching. It boasts 10 different sites on the Great Texas Coastal Birding Trail, which features the planet’s sole migrating flock of over 265 whooping cranes, which passes through the Aransas Wildlife Refuge every winter. It’s no wonder Rockport is a favorite among ornithologists.
Like most places, if you want a house right near the beach, which is actually on the other side of the bay, it costs quite a bit more. However, there are still some relative deals such as this three-story two-bedroom house on Mustang Island on the market for $599,900.
Just 30 minutes outside of Boston, this historic coastal town boasts 22 acres of protected shoreline, including multiple beaches and parks that make up the Lynn Shore & Nahant Beach Reservation.
Despite the town’s long-term nickname “The City of Sin,” which dates to Prohibition, Lynn is becoming known for its diverse population and its recently revived downtown. The walkable area offers a wide range of dining experiences, from upscale Italian and American to affordable Cambodian and excellent Mexican. It’s the kind of dining scene you’d expect to find in a major city but in a chill beach town.
Buyers who want to live near the water without giving up the culture of an urban environment can find great deals on homes here. They include this one-bedroom condo with waterfront views and an in-ground pool minutes from the beach for $279,000. There is also this fully renovated, three-bedroom house within walking distance to the shore listed for $650,000.
Morehead City and its surrounding towns are a playground for maritime enthusiasts. It’s a top stop on the Intracoastal Waterway. The protected 3,000-mile inland waterway hugs the East Coast from Massachusetts to the southern tip of Florida along the Atlantic Seaboard, then goes up the Gulf Coast to Brownsville, TX.
Morehead, about 150 miles southeast of Raleigh, NC, is also known for great boating, fishing, and nearly every type of water sport one can imagine in both the sound and the Atlantic. Like some of the metros on this list, the mainland city is protected by a barrier island, Bogue Banks, which boasts gorgeous beaches with powdery sand and plenty of room to spread out for a fun day by the ocean.
In those beachside communities like Atlantic Beach, buyers can find condos with beachfront views starting in the $300,000s, including this two-bedroom condo asking $359,000 and this two-bedroom condo with a boat slip on the market for $522,400.
This quaint coastal town on the east end of Narrangansett Bay exploded with new full- and part-time residents at the height of the COVID-19 shutdowns. People from New York, New Jersey, and Boston took up residence in waterfront homes with expansive outdoor spaces.
Part of the reason it’s become so popular over the past couple of years is that it’s a close drive to larger towns and cities like Newport, RI, a much pricier, coastal destination about a half-hour away, and Boston, which is about an hour’s drive. However, the rolling hills, stone walls, 600-acre conservation area with miles of walking trails, and coastal views make Tiverton a desirable destination on its own.
Buyers can check out this two-bedroom cottage with a large deck and amazing views of the water listed at just $439,000. Those who don’t mind a bit of elbow grease might find it easier to get into fixer-uppers like this $295,000 three-bedroom home that looks over the Stonebridge portion of the Sakonnet River.
“If you want to go to Boston for a day, you can drive halfway and take the T into the city,” says Amanda Nickerson Toste, broker associate and partner at Coastal Properties Group. “But it is still a farm coast community where you will get stuck behind a tractor on your way to work.”
* All entries include at least one arts, entertainment, or recreation venue and at least five restaurants or lodgings per 1,000 households, using U.S. Census Bureau data.
For more than 15 years, George Ratiu has been studying the housing market. He’s the senior economist and manager of economic research at Realtor.com, where he focuses on trends in global economies and real estate markets. He’s also a former manager of research programs at the National Association of Realtors, where he specialized in housing statistics, international and commercial real estate market performance and more. (Realtor.com is owned by the same parent company as MarketWatch.)
So we asked Ratiu: What do buyers need to know about the real estate market now?
1. Mortgage rates will likely continue to rise
“The surge in rates pushed the monthly mortgage payment for a median-priced home $550 higher than a year ago, a significant increase considering that most households are also feeling the squeeze of higher prices for food, gasoline, cars and clothing. Just as importantly, rates are expected to continue rising as the Federal Reserve tightens credit flow,” says Ratiu, who predicts that if the pace of increases continues, we could soon see a 6% rate on 30-year loans.
2. There aren’t enough homes for sale—which makes your choices more limited
One thing to keep in mind is that inventory remains limited as the number of homes for sale is still below last year when buyers were competing intensely. “The main reason for this shortage is the fact that builders have not matched the pace of construction to population and household growth over the past decade,” says Ratiu. In fact, there’s a shortfall of nearly 6 million homes, according to research from Realtor.com, and that makes it difficult to find enough homes for all the buyers looking for a property.
3. Home prices will likely keep going up in many markets, but not nearly as fast
Ratiu predicts that prices will also continue to increase due to the fact that there are still more buyers than homes for sale. “In many markets across the country, buyers are finding that they may still be outbid by someone with a cash offer or a higher down payment,” says Ratiu.
But due to sharp increases in interest rates and inflation, he says we’re nearing the top of the price growth curve. “In some markets, sellers are finding that buyers are beginning to spend more time looking and are less willing to waive contingencies, insisting on home inspections and asking homeowners to fix a property’s shortcomings,” says Ratiu. What’s more, he says in about a dozen cities across the country prices have declined over the past few months, an indication that the market is beginning to return toward more balance.
“We can expect prices to continue rising in the months ahead. For consumers, the bottom line is that higher expenses are leaving less money in their pocket at the end of each month, just as rents and home prices continue rising at double-digit rates,” says Ratiu.
4. Sellers will still have an advantage, but it won’t be quite so extreme
Sellers are likely to retain the upper hand in most markets across the country. However, their advantage is starting to wane given the combination of high prices and higher interest rates—which are pricing millions of buyers out of the market. Ratiu says the slowdown in demand is noticeable as sales of both new and existing homes have been declining over the last couple months. “Twenty percent of homeowners indicated that they plan to move forward with pandemic-delayed plans this year and list their properties for sale. The increase in supply will lead to more competition among sellers, shifting the market more towards buyers,” says Ratiu.
5. Don’t let FOMO land you in a house you don’t love
The main takeaway for buyers this year is that housing markets are already in a noticeable transition from the frenzied pace of 2021. With financial and economic pressures mounting, Ratiu says it’s important not to let the fear of missing out lead you into rushing what’s the largest purchase of most people’s lives. “The pace of new construction is picking up, more homeowners will be ready to list their houses and with rising interest rates, prices are already adjusting to the slowdown in demand. Patience is generally viewed as a virtue and may also be a key ingredient in this year’s search for a home,” says Ratiu.
A megamansion in Music City hit all the right notes with real estate gawkers this week. A $50 million price tag? Check. Over-the-top opulence inside and out? Check. A premium 50-acre parcel in one of the nation’s most coveted cities? Check, check, and check.
As a result, the most expensive home in all of Tennessee is this week’s most popular home on Realtor.com®. Looky-loos couldn’t get enough of the sprawling estate in Nashville’s swanky Belle Meade neighborhood. Designed in 2001 by Ferguson & Shamamian Architects for billionaire Dr. Thomas Frist Jr., the nearly 20,000-square-foot estate comes with a 9-acre building site.
You also clicked on a sweet and affordable barndominium in Texas, a dome fixer-upper in North Carolina, and a boffo Bauhaus-style home in Massachusetts. And in this week’s most obvious viral ploy, a midcentury modern in Nevada was hilariously staged with troll dolls and a toy Scooby-Doo Mystery Machine van.
For a full look at the week’s 10 most popular homes, simply scroll on down.
Why it’s here: This geodesic dome home offers 1,750 square feet of living space. But a buyer must be prepared to bring this home back into shape.
With its low list price, there should be room in the budget for a buyer to create a dream dome home. The spacious living area has a 20-foot ceiling, and the primary suite is located on the first floor.
Why it’s here: Built in 1800, this adorable and affordable three-bedroom farmhouse has been modernized over the years.
Full of charm, it features new paint throughout, laminate wood flooring in several rooms, modern light fixtures, and a kitchen with butcher block counters. There’s also an attached storage area, a carport, and a shed.
Price: $120 million
Why it’s here: It’s baaaaaack. Villa Firenze just can’t seem to stay off the market. The massive mansion was sold at auction last year for $51 million. It’s now listed at more than double the winning bid.
This Mediterranean-style estate features a two-story rotunda library, ancient stone fireplaces, and a primary suite with dual baths and a lavish office. There’s also a resort-style pool with a two-bedroom pool house, a child’s maze, a fully equipped gym, and a gift wrapping room.
Why it’s here: This Bauhaus-style home was built in 1937 by architect Nathaniel Saltonstall as his personal home. Saltonstall founded Boston’s Institute for Contemporary Art.
Besides Saltonstall, the impressive seven-bedroom home has had two other owners. The first-floor entry opens to a curved three-story, glass-block stairway. Other noteworthy features include six fireplaces, a solarium with terrazzo flooring and round windows, a greenhouse, and a separate three-bedroom guesthouse.
Why it’s here: Built in 1855, this stately three-bedroom home offers 4,181 square feet of living space.
The brick beauty features 12-foot ceilings on the first floor, a mudroom with a sink and pantry, and three staircases. The primary suite comes with a walk-in shower and a separate tub. Beautifully modernized, the residence sits on a half-acre lot.
Why it’s here: You won’t believe the shades of shag carpeting in these listing photos. The tan, red, and royal purple hues hint at the house’s 1972 roots.
In addition to sporting color wheel interiors, the three-bedroom home sits on nearly 42 acres overlooking the Bitterroot Mountains. There’s a three-car garage and mechanical room, a sauna, as well as a barn.
Why it’s here: This viral listing in Northern Nevada was a success. The ’70s-era home was hilariously staged with vintage Russ troll dolls, racking up thousands of clicks. There’s even a vintage tube TV in the living room.
Built in 1972, the home will take you back in time with its mirrored tile accent walls, wood paneling, green shag carpeting, popcorn ceilings, and gold-trimmed ceiling fans.
Price: $50 million
Why it’s here: It’s the most expensive listing in all of Tennessee, and it’s over-the-top opulent. Let the speculation begin on whether the next owner will be a titan of the business world or an A-list entertainer.
On a 50-acre lot sits this massive five-bedroom home with 19,811 square feet of living space. Highlights include a porch with a fireplace, a tennis court, swimming pool, two-story great room, and wood-paneled library with built-ins.
Americans looking for relief from the increased cost of, well, everything won’t find a salve in the housing market. As gas prices and food costs continue to soar, so too do rents.
The median rent in the country’s 50 biggest metropolitan areas soared 16.7% annually, to hit a new high of $1,827 in April, according to a recent Realtor.com® report. In fact, that price point is the highest in the U.S. since we began tracking rental prices. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)
Following a dip in rents brought on by the COVID-19 pandemic and temporary, nationwide tenant protections, rents have been soaring. If price growth rates continue at about the same level, median national rents will break $2,000 per month sometime this summer.
“Rent growth had been really high,” says Joel Berner, senior economic research analyst at Realtor.com. “We expected that to taper off, and it just hasn’t,”
The immediate forecast doesn’t look good for renters. Pandemic slowdowns in construction and more renters leaving their families’ homes and looking for places to live have tightened up the market. That’s enabled landlords to seek higher and higher monthly rents.
The surge in for-sale home prices and rising mortgage rates plus the rash of corporate investors buying up properties have only exacerbated the matter. Many folks who would have bought a home of their own are having a hard time doing so—and are forced to remain renters. That’s keeping demand for rental housing—and the ensuing competition for it—high.
“A squeeze is really being felt, especially by folks who might be first-time homebuyers,” says Berner. “It’s more expensive to [get a mortgage] without a good down payment, but it’s hard to save for a down payment when your rent is spiking.”
Where rents are up the most
Nationally it’s hard to be a renter, but certain regions offer greater challenges than others. Surprisingly, one of those is in the Sun Belt. Cities throughout the U.S. South have seen the greatest year-over-year increases in rent as local real estate markets have boomed.
The problem is pronounced in Miami, where annual rents have grown a staggering 51.6% since last year. Increased demand has crashed into a relative lack of multifamily rental unit construction in Florida, causing surges in nearly every major city in the state. The challenges in Miami are such that tenants are offering over the asking price for apartments in the hopes of winning in a tough market.
“We’re finding multiple offers on rentals,” says Jeffrey Corriolan, a Realtor® at Miami’s eXp Realty. “If something’s listed for $3,000, they’re offering $3,150.”
Corriolan adds construction is booming in Miami, but the units can’t come on the market fast enough to keep pace with demand. He’s taken to warning clients to get their ducks in a row before making offers.
“If you see a rental, know that it’s not going to be on the market long,” he says. “You’re going to want to put in your best offer and have all your documentation prepared in advance.”
Is there a glimmer of hope for renters?
There are some signs that the surging rental market will level off. With more rentals coming online and price cuts being seen on for-sale listings that are moving less rapidly than during the post-pandemic peak, it’s possible rents will cool down as well.
“At some point, those prices will have to level out,” says Berner. “In the meantime, it’s hard to go from renting to buying. But there are some encouraging signs from a first-time homebuying perspective and that will eventually have an effect on [the rental market].”
Signs of a cool-down are starting to appear, even in ultrahot markets like Miami.
“It does feel like it’s slowing down right now,” says Corriolan. “Instead of there being 10 offers on a listing, it’s five offers right now.”
Homebuyers are facing increasing competition for properties from large, deep-pocketed investment firms. Many are losing bidding wars to corporations offering all cash to turn more affordably priced houses into rentals, or to flip them for resale.
Institutional investors made up about 13% of home sales in 2020, according to a recent report from the National Association of Realtors®. That was an increase from 2020, when institutional investors made up about 11.8% of home sales. However, it is still below the peak in 2014, when investors represented about 15.7% of all homebuyers.
“The presence of institutional buyers when there’s a limited supply of homes for sale is one more challenge that is piling up for first-time homebuyers,” says Gay Cororaton, a senior economist at the NAR. “Investors tend to pay in cash, and sellers like that. This is really hurting first-time buyers.”
To figure out where investor purchases made up the largest percentage of home sales, NAR analyzed property deed records from Black Knight and looked at real estate market data from the U.S. Census Bureau’s American Community Survey. NAR also surveyed more than 3,600 Realtors® about institutional buyers.
NAR defined institutional investors as companies, corporations, or limited liability companies. These include financial firms that may receive the financing for these purchases through hedge funds and pension funds.
Large investors flocked to the South. In Texas, they represented about 28% of buyers who closed on properties, according to the report. That’s more than a quarter of all of the home sales in the state.
The state with the second most investor purchases was Georgia, at 19%. It was followed by Oklahoma, at 18%; Alabama, at 18%; Mississippi, at 17%; Florida, at 16%; Missouri, at 16%; North Carolina, at 16%; Ohio, at 16%; and Utah, at 16%.
The South is “where people are migrating,” says Cororaton. “That’s where the jobs are. That’s where the market opportunities are.”
Institutional investors paid about 26% less for those homes than the median purchase price in the states where those properties were located, according to the report. That’s likely because about 42% of the homes they bought needed repairs.
Home sellers were more likely to accept their offers because they paid in cash, bought the homes as is (so sellers didn’t need to make repairs), and provided a guaranteed purchase date.
About 42% of the single-family homes bought by investors were turned into rentals. The rest were flipped or later resold.
“Homeownership is the primary source of wealth creation for many Americans,” says Cororaton. “So if more and more institutional investors are purchasing the limited number of homes on the market, this means limited opportunities for regular folks to build wealth.”
Large investors are heading to areas that have larger millennial, renter, and minority populations and where lots of folks are coupling off to form new households. They also want to be in areas where residents have higher incomes and plenty of new folks are moving into the community. And they’re always looking for places where rents and prices for homes for sale are rising quickly but there isn’t a glut of rental housing—so they can turn a profit.
“It’s a vicious cycle,” says Cororaton. “Institutional investors are saying prices are rising, mortgage rates are rising so more people will want to rent. But they’re taking away opportunities from homebuyers.”
Most Americans probably have never heard of the best place to live in the nation.
The Huntsville, AL, metropolitan area topped the annual list of the best places in the country to live, according to the recent ranking from U.S. News & World Report. The affordability of the aerospace hub, about 90 minutes north of Birmingham, and its variety of good-paying jobs helped it rise to the top.
“The biggest priorities for consumers and for people looking to move to a different part of the country were housing affordability and quality of life, says Devon Thorsby, real estate editor at U.S. News & World Report. “The last couple of years during the [COVID-19] pandemic really changed how people view their homes and where they want to live.”
The report looked at the 150 largest metropolitan areas and then ranked them based on affordability, desirability, and quality of life. The rankings took into account local job markets, crime, and the quality of local high schools and hospitals. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)
Huntsville displacedBoulder, CO, as the top spot. The Huntsville area is home to a Meta (formerly Facebook) data center and an IBM outpost, and soon it will be the headquarters of the new U.S. Space Command, which will oversee military operations in space.
The median home list price in the metro was $400,000 in April—about $25,000 less than the national price tag, according to the most recent Realtor.com® data. In 2018, Realtor.com found that Huntsville had one of the best commutes in the nation.
“Even with the run-up in prices, we’re still very affordable,” says local real estate broker Matt Curtis, of Matt Curtis Real Estate. “There are a lot of restaurants and entertainment venues coming to the area.”
The sweet spot for buyers are four-bedroom, three-bathroom homes in the area typically on about a quarter of an acre or less. These 2,000- to 2,600-square-foot homes, built within the past six to 10 years, are often priced at $320,000 or so.
However, even with builders putting up homes as fast as possible, there is still a shortage of homes for sale. That’s meant properties are receiving anywhere from five to 30 offers, says Curtis. And many are selling for over the asking price in just a few days. This has made it challenging for first-time buyers even as higher mortgage interest rates are cooling the market a bit.
“That window of opportunity is quickly closing for first-time homebuyers because of rising [mortgage] interest rates and rising home prices,” says Curtis.
Not every metro on the best places list was inexpensive.
Two of the nation’s most expensive housing markets, Silicon Valley’s San Jose, CA, and San Francisco, made the top 10. Real estate editor Thorsby attributed this to salaries generally being higher in these areas, which offset some of the higher home prices. They have plenty of cultural attractions, strong job markets, and lots of things to do.
“They have a lot of the things that people are looking for,” says Thorsby.
Today’s real estate market is as competitive as it gets, and navigating this new reality is something Tracy Tutor understands all too well.
As the first and only female real estate agent on Bravo’s “Million Dollar Listing Los Angeles,” Tutor has had to hustle hard to be seen as a worthy contender. And she’s succeeded, with bragging rights to selling some of L.A.’s most iconic homes designed by starchitects such as Frank Gehry, John Lautner, and Pierre Koenig.
We took advantage of the launch of a couple of new varietals (a smooth vegan shiraz and a chenin blanc) to chat with Tutor about the state of today’s cutthroat real estate market. Here’s what she’s seen—and her top secrets on how homebuyers and sellers can get the edge.
How did you first get involved in real estate?
I’ve been selling real estate for about 23 years now. I first began in my 20s—I was an actress. I went to USC and studied theater. But I woke up after college and I was hustling, going to auditions, and waiting tables, and I said to myself, “This doesn’t feel like I’m in control of my own destiny. I don’t want to do this anymore.”
So a girlfriend of mine said we should go into real estate. She said to me, “You grew up here, you have great contacts.” So I studied, I got my license, then I walked into Sotheby’s and said, “You should hire me.”
How did that work for you?
I remember the manager asked me, “How do you foresee the next couple of years for yourself?” And I said, “Well, I need to make $90,000 a year to pay my bills and survive.”
Then he said, “Most real estate agents typically make $30,000 per year in their first two years.” I told him that won’t work for me, and he said, “OK, you’re hired.”
What did you make your first year?
$30,000. I started at the bottom, and I sat in the bullpen, as they used to call it, and I didn’t know what the hell I was doing and learned the hard way. I learned through failure.
I failed in the beginning more than I succeeded, but I think through failure and the recovery from that, I learned that I had to put in the work, put in the hours.
I eventually joined a team and had that support system that guided me and mentored me. Then by the time I was 26 I made my first big sale, and I was like, “Oh my god! I made six figures? How did that happen?”
How did you first get involved with ‘Million Dollar Listing Los Angeles’?
On Season 9 of the show, I was showing one of Josh Altman‘s properties, and he said, “Hey, I just want to give you a heads up, we’re filming this showing for the show, are you cool being filmed?”
And I said, “Hey, you’re giving me 10 minutes’ notice. I’m in jeans, can you give me a second to get cute?” So I ran to the store and bought a dress. Josh and I are friends, so we had a fun chemistry on camera. So all of a sudden I think they were like, “Oh my god, this could be the first woman!” After the show aired, I got a phone call and they asked, “Would you be interested in talking to us about being on the show for Season 10?”
It seems that in this smoking-hot real estate market, it’s a great time to be an agent.
Well, the market is crazy at all levels, and we’re seeing numbers we haven’t seen. It’s been a ride. But when you’ve been in the business as long as I have, you know that you’ve still got to go to hustle.
This is one of those moments where the strong survive. Since there’s not a lot of inventory, we have to fight hard for every listing that we have. And we also have to compete at a level with our clients and buyers that we haven’t had to compete at before.
What’s the secret to buying and selling real estate in such a cutthroat market?
That’s when relationships become important. Being ethical and not screwing people over is so important, because if I got 10 offers on a listing, and agent two or agent three screwed me over previously, you’d better believe I’m not going to push that offer to the forefront. Listen, of course, money is always going to win. I’m not disregarding that. All things being equal, though, this industry is full of sharks, so you’ve got to be careful about who you’re swimming with.
What can homebuyers do to make sure they work with the best agents?
You should do your due diligence on the agent. If you know that they’re selling quite a bit in the neighborhood, and you know maybe they sold the neighbor’s house, ask about the experience. They might tell you, “Look, they got me top dollar, but at the end of the day, I hired them and their assistant did all the work.”
In such a competitive market, what’s one move that will give a homebuyer the extra edge?
Be ready to go. You have to be ready to write an offer the first time you walk out the door of the house that you fell in love with. You have to be ready to put pen to paper on the hood of your car outside the house in this market. Having your pre-approval ready, having your ducks in a row, having your 3% potential deposit in an account, and having verification of funds to close the transaction are all elements to being able to function successfully in this market.
What is the one thing a buyer should never do?
Don’t look at houses frivolously. Don’t waste your agent’s time. Remember, we work for free until we close the deal. You may go with your agent on a five-week tour of 30 houses, and if you’re not pre-approved and your cash isn’t ready to go and you don’t understand the process, you’re wasting everyone’s time.
Any other mistakes you see buyers making in an effort to trump the competition?
As a buyer, I would never try to call the seller direct or try to go around my agent—that’s never met with a positive response. It’s nice to have a professional barrier, even in this crazy market. Historically, if you put buyer and seller at a table together, the deal is not going to happen.
With so many bidding wars occurring, how do you know when a house is overpriced?
If the house doesn’t have multiple offers, it’s probably priced a little high. Typically, in this market, after three weeks, if there’s not an offer placed, it might be priced too high, or there might be a problem that cannot be fixed.
From a seller’s perspective, if you’re not getting multiple offers on your house, what should you do?
Take a look at what is selling fast and ask why. They’re probably selling fast because they got everything right. They got the staging right, they got the curb appeal right, they got the price right. And that’s why they’re selling at a premium.
President Joe Biden has a new plan to fix the severe housing shortage that is plaguing America, leading to record-high home and rental prices. The fate of the nation’s housing market hangs in the balance.
The administration’s Housing Supply Action Plan, released on Monday, has an ambitious stated goal: It aims to increase the supply of housing enough to end the inventory shortage within five years.
Much of the plan focuses on providing financial incentives for communities to allow more smaller homes to go up and offer financing for builders who put up more lower-priced housing. The president anticipates the result will be more affordably priced housing available for homebuyers and renters.
“There are some creative ways of tackling the housing shortage. … This plan tries to make it easier to fund building smaller, more affordable units so they actually get built,” says Realtor.com Chief Economist Danielle Hale. However, “it’s unclear how much of a difference all of this will make, especially in the short term.”
Based on demand, the nation is short about 5.8 million single-family homes—which don’t include condos, rental apartments, and other forms of housing, says Hale.
Biden’s plan would make it easier for communities that allow more home construction, including smaller homes and rentals, to receive federal grants. It is also attempting to increase the construction of single-family homes in rural areas.
The president hopes to provide more financing options for builders who preserve and construct affordably priced housing. It would also encourage more manufactured housing, which can include mobile homes, smaller multifamily buildings, and accessory dwelling units. ADUs are usually smaller, standalone dwellings on a homeowner’s property that are often rented out or used for aging parents.
“The Plan will help renters who are struggling with high rental costs, with a particular focus on building and preserving rental housing for low- and moderate-income families,” according to the administration’s document. “The Plan’s policies to boost supply are an important element of bringing homeownership within reach for Americans who, today, cannot find an affordable home because there are too few homes for sale in their communities.”
And the administration hopes new regulations would give homebuyers an edge over investors in many foreclosure auctions. More homes that go into foreclosure that have government-backed loans would be available to buyers who want to live in them and nonprofit organizations for 30 days before the sales would open to large investors. That is an increase from the current 10-day period.
The housing crisis is so pronounced because few homes went up in the aftermath of the Great Recession, when the housing bubble burst. Fast-forward to today, and many millennials are hitting peak homebuying years. They’re a larger generation than Generation X, which came before them.
That means there are more buyers and not enough homes for sale—causing prices to spike.
Renters are feeling financial pain as well. Since many renters can’t find homes for sale, or can’t afford what little is available, they’re forced to continue renting. That extra demand for rentals has boosted prices to all-time highs.
“The housing shortage is a problem that affects Main Street. Most people pay a mortgage or rent every month,” says Hale. “If you want to benefit everyday Americans, tackling the housing shortage is a way to do it.”
Will Biden’s plan solve the housing shortage?
While it’s unclear whether the president will achieve his goal of ending the housing shortage in five years, many believe these new policies can’t hurt.
“It will make a big difference in housing in the very low-income space and government-subsidized space,” says Jerry Howard, CEO of the National Association of Home Builders. But he isn’t convinced it will help most middle-class homebuyers.
“I’m not sure that it’s geared toward what we think is the linchpin of the market: first-time homebuyers,” says Howard.
He would like to see the federal government ease some of the regulations, such as environmental and labor rules, which make it more expensive to put up homes. Many were rolled back under President Donald Trump and then reinstated under Biden.
This newest plan comes on the heels of Biden’s proposed 2023 federal budget. In it, his administration wanted to increase the funding of the U.S. Department of Housing and Urban Development by 21% to expand rental assistance to more low-income tenants, increase the number of affordable housing units available, and help more Americans become homeowners.
The budget, which was released in March, has yet to be approved by Congress.
Biden’s administration is still urging Congress to pass legislation to offer tax credits to build and rehab homes for lower- and middle-income buyers. These properties would not be available to big investors.
The administration has already taken steps to affect the housing market by reducing the duties charged on softwood lumber from Canada. This makes the lumber, used to build homes in the U.S., a little less expensive for builders. Biden has also been fighting racist appraisals and other policies that disproportionately hurt communities of color.
“This is the first time since 1990 that anyone has made housing a federal [priority],” says NAHB’s Howard of the newly produced plan. “We applaud a lot of what’s in there. We think there is more that can be added in it.”
People who agreed to buy homes under construction but haven’t yet closed are facing mortgage-interest rates that could be nearly double what they anticipated when they paid their deposits.
New-home buyers are confronting multiple obstacles this year, from surging mortgage rates to home construction that is taking longer than usual due to supply-chain and labor constraints.
Many home buyers who signed contracts for new homes in 2021 or early this year calculated monthly payments based on near-record-low mortgage rates of around 3% or less. But average mortgage rates have climbed this spring to 5.3%, according to Freddie Mac, as the Federal Reserve started raising short-term interest rates.
The difference can translate into hundreds of dollars more a month in mortgage payments—leaving buyers with the choice of swallowing the additional costs or walking away from the deal and potentially sacrificing the deposit.
Borrowers, so far, have been largely willing to absorb the added costs to keep their purchase, mortgage brokers and home builders say.
Buyers of existing homes face much less interest-rate risk because they usually close within a month or two of signing a contract. Home buyers worried about sudden rate fluctuations can lock in a borrowing rate, often for a period of 30 or 60 days.
Buyers of new homes, which account for more than 10% of U.S. home purchases, often sign contracts and pay deposits several months before their homes are ready.
Supply-chain issues have slowed down construction times and delayed many home closings for additional weeks or months.
“It’s just introduced a lot of uncertainty and volatility into the consumer’s decision,” said Rick Palacios Jr., director of research at John Burns Real Estate Consulting LLC. “The chances of [the buyer] no longer being able to qualify for this home go up significantly.”
Builders can resell homes that fall out of contract to other buyers on their wait lists, Mr. Palacios said. But in an April survey by his firm, some builders reported that their wait lists of potential buyers are shrinking as interest rates rise.
When Lauren Sparks and Taylor Briggs paid a deposit on a new house with a yard in Savage, Minn., last summer, their loan estimate had a 2.875% interest rate. In January, they had the option to lock in a 3.75% interest rate for 75 days, but they decided against it in case the construction was delayed beyond the 75-day window, Mr. Briggs said.
“I had no idea that rates were going to explode as much as they were,” he said.
In February, the couple opted for a 45-day rate lock at 4.375% and paid more upfront to lower their interest rate to 3.625%, Mr. Briggs said. The purchase closed in March.
Most buyers are stretching their budgets rather than giving up on the purchase, unless they are unable to qualify for a mortgage at the current rate, mortgage brokers and real-estate agents say.
Micah Barber and Stephanie Dodoo decided last year to replace their Austin, Texas, home with a bigger house on the same lot. They paid deposits to a builder in September and October and expected construction to start in January. When it was delayed and interest rates started to climb, they considered walking away, Mr. Barber said.
“There’s a quite significant difference, when you’re borrowing a six-figure amount of money, in paying 3.5% and paying 5.5%,” he said. “I have lost some sleep.”
They had initially intended to take out a fixed-rate mortgage but switched to an adjustable-rate mortgage with a fixed rate of 3.75% for the first 15 years after the home is built.
In response to rising interest rates, builders are helping buyers lock in rates. Taylor Morrison Home Corp. Chief Executive Sheryl Palmer said on an April 27 earnings call that the home builder had probably seen more rate locks of six, nine or 12 months in the past 10 days than in the last five years.
Mortgage broker Chris Robson in Fresno, Calif., said many of his clients who are buying newly built homes are opting for nine-month or 12-month rate locks, which can be obtained for a price above the current interest rate.
In some cases, he said, buyers who prequalified at lower rates have needed to pay down or refinance other debts, like car loans, to stay qualified at current rates.
On the plus side, some workers have gotten raises since they were prequalified nine or 12 months ago, which helped offset the effect of the higher interest rate, Mr. Robson said.
Bob and Anna Bergen signed a purchase agreement with a home builder in February, after struggling to find a home in the Detroit suburbs. They expect their house to be finished in early 2023.
“It’s exciting, but nerve-racking at the same time,” Mr. Bergen said. They haven’t shopped around for a mortgage yet, but he is budgeting for a 5.5% interest rate. The couple is also planning to list their current home next year when the new home is ready.
“The financial uncertainty is, I’d say, probably the highest point in any recent history, for how quickly the rates or the housing market could change,” he said.