Cities with the Best Foreclosure Opportunities for Investors

Currently, thousands of investors are working hard in the purchase of homes and are allocating a large portion of their capital to the U.S. real estate market to achieve a significant presence in the sector.

So far this year, investors have recorded the highest percentage of home purchases. They are the ones constantly taking big steps to improve the property market, as has been evident since 2023.

Investors are classified as small (those who buy 10 or fewer homes), medium (between 11 and 50), and large (50 or more homes). According to specialist reports, small investors today represent 62.6% of total home purchases in the United States, a significant proportion compared to previous years.

On the other hand, although medium and large investors have decreased by 3.8% and 13.9%, respectively, compared to previous years, the report indicates that their activity increased during the pandemic as larger and more resourceful companies acquired additional properties.

However, when home prices and mortgage rates reached new peaks, larger investors withdrew, and the proportion of small investors began to increase again, the report states.

The metropolitan areas where investment is most sought after are those that have not been greatly affected by inflation and high interest rates; therefore, housing affordability is much more economical and viable.

The most favorable properties for investors are now located in the metropolitan areas of the South and Midwest, where prices are low, and rents are rising. Likely, to ensure a steady flow of income, the balance will tip toward the area with a larger and more affordable rental housing market.

One of the most attractive property markets is in the state of Missouri, where the city of Springfield had the highest share among all the larger metropolitan areas studied in the U.S., with 20.5% of sales. Meanwhile, the cities of St. Louis and Kansas City had 18.9% and 20.1%, respectively.

In the South, the areas that saw great market improvement due to more affordable home prices and rising rental rates were the cities of Birmingham in Alabama and Memphis in Tennessee.

Other cities that are seeing an increase in investor activity include Montgomery (Alabama), Savannah (Georgia), Springfield (Massachusetts), Ohio (Pennsylvania), Peoria (Illinois), and Youngstown-Warren-Boardman. However, these areas remain below the national average of the entire U.S. market.

Available foreclosures:

Springfield, MO: 150

Kansas City, MO: 200

St. Louis, MO: 180

Birmingham, AL: 170

Memphis, TN: 160

By Elias DaSilva | September 17, 2024.