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54 | M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T DATA AROUND THE U.S. Best Markets for Investors Flipping Homes Picking the right market is key to flipping homes, and Realtor.com examined where the highest percentages of home sales are for flipping or renting out. " M ost of these mid- sized cities have strong job growth and lower home prices and a more relaxed life- style attracting millennials," said George Ratiu, Senior Economist of Realtor.com. According to the "10 Best Places to Buy Investment Real Estate" report, real estate investors purchased 7.7% of all homes in Q2 2019, up 0.6% year-over-year and representing the most specula- tion the market has seen since 2013. St. Louis is considered the most appealing destination for both flippers and landlords, with 18.8% of sales identified investment properties. "Twenty years ago, [real estate investors] were all locals," said St. Louis broker and landlord Dennis Norman of MORE Realtors. Now, "we have a lot of investors from California, from Colorado, and even international investors." In St. Louis, investors can pur- chase a move-in ready, single-fam- ily rental in the $30,000 range and then rent it out for $750 to $800 a month to tenants. However, maintenance costs can be high in these older homes, and tenant turnover is high. 1. St. Louis, Missouri 2. Birmingham, Alabama 3. Miami, Florida 4. Tampa, Florida 5. Memphis, Tennessee 6. Las Vegas, Nevada 7. Phoenix, Arizona 8. Orlando, Florida 9. Columbus, Ohio 10. Philadelphia, Pennsylvania The Housing Market's Inventory Problem There were more than 100,000 fewer homes in September than there were in the month prior. T he share of available homes for sale in Sep- tember fell after a slight recovery earlier this year, as Zillow reports there are 102,112 fewer homes on the market than there were last year—a 6.4% annual drop and the lowest level since 2013. Home values, however, saw a 4.8% year-over-year increase and the average home is worth $231,000. "Housing appears to have renewed its place as a bright spot contributing to continued U.S. economic growth. The return of accelerating quarterly price growth, rising sales numbers, and increasing home builder confidence and activity all point to closing out 2019 on a healthy note, despite greater volatility over the course of this year," Zillow Director of Economic Research Skylar Olsen said. Zillow states that inven- tory grew year-over-year every month between September 2018 and February 2019. This trend reversed 44-consecutive months of inventory declines dating back to January 2015 New listings at the beginning of the homebuying season were 8.4% lower than April 2018 and 10.6% below May 2018 numbers. Making matters worse, the Census Bureau revealed that housing starts in September were 9.4% below the revised August number of 1.38 million. The report states that 1.25 million homes were started in September. Housing completions were 9.7% below the prior month, as 1.13 million homes were com- pleted in September compared to 1.26 million in August. The month-over-month drop in single- family housing completions for September was 8.6%. Zillow reports that the sector impacted the hardest are first- time and low-income borrow- ers. Inventory growth among this group reached 6.7% in October and fell 10.3% annually in September. Additionally, 12.7% of homes in the bottom-tier had a price cut in September, compared to 15.7% of middle-tier homes and 17.3% of top-tier homes. San Jose, California, saw the largest fall for home values, as they fell 10.7% year-over-year. Indianapolis, Indiana, had the big- gest increase at 8.1%. "Housing appears to have renewed its place as a bright spot contributing to continued U.S. economic growth. —Skylar Olsen, Director of Economic Research, Zillow