These three areas are the best places to buy a home right now

With spring comes the buying and selling season in residential real estate. Many may still be nervous to dive into the market and many more may still be stuck in underwater mortgages. Still, if you have the means real
estate can be a solid investment - especially in these areas outlined by real estate expert and author, Shari Olefson.
Dallas/Fort Worth, TX
When it comes to finding a good deal, Olefson says, “What we’re really looking for is markets where there’s still a significant number of properties that are underwater - meaning the homeowner owes the bank more than the home is worth. And in markets like Dallas and Forth Worth you still have anywhere between 20% and 40% of homeowners with a mortgage that are underwater.”
Bad news for the homeowners to be sure, but there’s also opportunity. Olefson notes that the area has solid jobs in technology and a growing population. That and the relatively low prices in this still-recovering market make it a good place to buy.

[Click here to check home loan rates in your area.]

“You don’t want to ever be paying more for a home than about two and a half times the area median incomes are,” she notes. “So in areas like Dallas and Forth Worth we still have that happening.”

San Bernardino, CA

The housing profile here is much the same as in Dallas/Fort Worth but Olefson says there’s an added bonus in this market: Higher rent prices.

“When you’re talking about rental income...you look at the annual amount of rental income and you divide that by what you’re going to have to invest in the house (called the cap rate). That formula works out well in San Bernardino not so much because the home values are excessively low but because they’re getting good rents there.”

Florida

The Sunshine State was one of a few ground zeroes of the housing crisis and in cities like Jacksonville, Orlando, Tampa and yes, even Miami, Olefson says there are still some really good deals to be had.

Using Jacksonville as the example she notes, “you have as many as 40% of the homes with a mortgage that are underwater which is huge. Because of that you’re seeing higher levels of inventory. When there’s more homes available it’s just supply and demand. It tends to drive down prices. In the Jacksonville area you can pick up a home for around $100,000 and you can rent it out for maybe $1,200-$1,300 a month and the numbers look really good."

As for the broader housing market all across the country Olefson says we should expect housing values to appreciate somewhere between 3% and 6% over the next few years. That means simply buying a home and hoping to sell for a profit in a few years may not get you the biggest bang for your buck.

“We’re not looking as much at making money because of huge appreciation in general in the market,” she says. “We’re looking at making money because those assets are still undervalued because of the crisis the rest of the nation has recovered from but these areas have not.”