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Unknown
for ten years
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Unknown
the smart money had a simple play buying the Sun Belt.
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Unknown
Follow the moving trucks.
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Unknown
The play kind of blew up. The markets that everybody chased are
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Unknown
leading the country in price decline.
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Unknown
So they boomed. Another busting and the markets. Nobody makes YouTube videos about are quietly posting some of the best returns in America.
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Unknown
Now this is part two of the 2026 Market Report breakdown. So
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Unknown
I'm going to show you exactly where the money moved. So let's get into it
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Unknown
okay. Let's talk about the regional divide.
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Unknown
Here's the single biggest story in this entire report. The old winners became new laggards. And it happened fast okay. The Sun Belt and parts of the West are really cooling. Florida, Texas, Arizona, the places that everybody piled into during the pandemic. Everybody's moving to these places. They're softening on oversupply and the regions leading the country on price growth and flip are return on investment right now.
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Unknown
The Rust Belt, the Midwest, the northeast is wild right now. The places that were really, I would say road off is boring or, you know, not not not they weren't really growth, right? They almost felt like they were dying now.
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Unknown
On the report. There's there's a part in here that talks about Kansas City. So Kansas City middle America is just like proof of this. It's up 8.6%. Well Columbus, Ohio now I'm a Michigan guy. So Columbus, Ohio. And that that whole crew, I'm not I try to stay away from it, but it's up 6%.
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Unknown
It's a booming market. Cleveland Ohio is up almost 6%. Pittsburgh's almost up 6%. New Jersey, Connecticut Illinois is all up in the fives. Now, if you look at the downside, if you're looking at the report, you look at the downside, like where who's down Cape Coral Florida. Brutal. We've got an investor in our altitude community guys incredibly elite.
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Unknown
His name is Kevin. He's a just a amazing investor. Made it 20 flips going on at any given time. They're down almost 10% now. That's the worst decline in the nation in that Cape Coral market. Even where I'm at. The Tampa metro has been down about 6%, palm Bay down six, North Paw, Florida down six and 28 of the 53 largest metros in the country fell year over year.
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Unknown
So the herd ran to the Sun Belt and then the spread moved to the Rust Belt. Okay, so the market has moved. That doesn't mean you necessarily need to move markets, by the way, if that's how your operation is built, and we have people built like that where you can pick up and move virtually, you just have to become an elite operator.
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Unknown
You have to analyze deals right by at the right price. You have to be excellent at your flipping operations. Now let's talk about why the Sunbelt craft. Because if you think about this. Why did the markets, with all the momentum suddenly just roll over? I think there's three reasons that I can come up with this assessment, and they all matter for how you really read any market one, they overbuilt.
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Unknown
So when everybody knows people are moving somewhere, builders flood in. Your Doctor Horton's of the world are just building as fast as they can. So Florida and Texas put up an enormous amount of new supply. And now there's more. I don't know if there's too much, but quite a bit. And it's it's all chasing the same bars. You have all these new homes available, right.
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Unknown
The second thing that really is interesting here is insurance, especially in Florida, like premiums went through the roof and some properties are flat out hard to insure period. So that crushes the value because people think in terms of monthly payments, right? Part of your monthly payment for being a homeowner is principal and interest from the lender, but also taxes and insurance.
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Unknown
Right now, if insurance goes way up, some in some cases hundreds of percent in Florida, depending on the market. If you're on the coast, all that stuff that crushes the value, it definitely shrinks the buyer pool. So we're going to spend real time on insurance in episode four because it's that important. But I just want to leave that for you here now.
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Unknown
Now, the third thing that I have on this report is the migration tailwind started to fade. So people are still moving to these states like Florida is one good example because it went crazy, but not at the frenzy pace that justified the price run up and the supply build. So when the music slowed in, the supply was already built.
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Unknown
Prices really didn't have anywhere to go but down in some cases. So just those three things overbuilt insurance migrations faded. So just keep that in mind as you look at your market. Now here's why I think also migrations kind of lying to you. So now I want to bust like a piece of conventional wisdom that a lot of the gurus are still preaching.
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Unknown
Follow the migration by where people are moving. Well, let's look at what the data actually shows. Okay, so Texas is the number one. And for migration and in the whole country Florida's number two actually. And both of them are leading the country on price declines. So there's a kind of a conflict there. Meanwhile, Ohio gained on price while actually falling in population rank.
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Unknown
People left Ohio on net and prices still went up because supply was tight. So in migration, coming in doesn't always equal appreciation. And if it does, it's possible that it does. When you see if I see a migration pattern come in at the beginning of 26, looking at 25, it's not going to affect my prices. There's a delay on effect, so it might rebound my prices.
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Unknown
But you go, hey, I just it's January. U-Haul puts out this one way migration report every year. So you get recency of data. Florida's number one Florida and Texas are number one and two. But Florida softening. What the heck is going on. Well that just tells me in maybe six, 12, 18 months, Florida has the opportunity with one data point to potentially rebound.
00:06:38:23 - 00:07:01:16
Unknown
So, you know, my migration really tells you the long run demand where the kind of the floor is. And that's useful. But if builders over build ahead of that demand, the new supply swamps up. A lot of the new arrivals like pulls it all in and kind of negates it to a certain degree. So demand matters. But supply discipline I think is really what is protecting price.
00:07:01:16 - 00:07:25:18
Unknown
Now let's talk about some of the builder stuff. Right. Let me put a number on that supply problem because it is wild. And almost nobody I don't think is really talking about this in a data driven way. So existing home supply sits around four and a half months, like I mentioned in the previous episode. So new home Supply is sitting at nine in a 9.7 months.
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Unknown
So I'm talking about new new built houses here. Not like new homes to the market. So existing homes only four and a half months, but brand new homes are sitting at almost ten months. So the balance line is 5 to 6. So new constructions carrying nearly double a balanced level of inventory. So should you care about this as a flipper because that builder three streets over from your flip is sitting on unsold inventory.
00:07:52:23 - 00:08:13:12
Unknown
And he's probably going to do whatever it takes to move it. You're talking price cut, price cuts, rate by downs, closing costs, credits free upgrades. You got to put yourself into the buyer shoes. I'm sitting. I'm looking at your flip. It's nice. You did a great job. But I can get a brand new house for a less payment.
00:08:13:13 - 00:08:30:17
Unknown
My payment would literally be less buying a brand new house. Maybe it's even a little bit smaller. What are your buyers going to do in your market? That's the question you need to ask if you're competing with a bunch of new construction. Now, it's not just resale homes. You're you're competing with. So I think that's what you really have to keep in mind.
00:08:30:18 - 00:08:54:19
Unknown
You need to look at your market. If you're competing with new new houses, like you need to be looking deeply at that now, it's a real threat and it's a real threat to your exit, and you have to underwrite for it, especially in the metros that are like just gluttonous with new construction. Okay. So let's use let's let's talk about how to use migration the right way.
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Unknown
Right. So if migration alone is a trap, how do you actually use it? Here's the framework to think about this. Use migration for the long run demand floor. So like you know it's probably not going to go under this. If people keep arriving, then you have a durable base of renters and buyers over a period of time, probably over six months.
00:09:15:09 - 00:09:36:00
Unknown
That lowers your risk. On the whole, we're typically in a flip project at 3 to 9 months to pay on your skill level, so keep that all in mind. It lowers your risk on the hold of that property, even if it's a short term hold like a flip. Now use supply and price data for the actual by decision before you buy anywhere.
00:09:36:01 - 00:09:55:03
Unknown
Check months of supply. Literally just had an agent. We're taking this property to market and you know, of course ask her how we're marketing it, blah blah, blah, blah, blah. All this stuff she's going to do to make a sell. And I also asked her, what are the months of supply in this specific city? Like, what's the days on market in this city?
00:09:55:04 - 00:10:16:05
Unknown
So before I buy or make a sell decision, it's going to tell me what's happening right now, which is what my deal lives and dies on. Okay. And then I want you guys to treat high growth, high supply markets as a cash flow and deep discount play to not just an appreciation bet. So you can still win in Texas and Florida.
00:10:16:06 - 00:10:33:17
Unknown
You just went on the buy. You win on having an exit that can cover your debt with rent. So if if you got to turn something into 30 or DSR, like, can I cover all my debt on rent so that I can buy and wait right and not worry about writing and appreciating market up? Because that's a bet that we don't control.
00:10:33:17 - 00:10:56:16
Unknown
So the lesson of this whole episode is that the headline and the opportunity have kind of split apart, and the hype is in one place while the spread is in another. So stop following the moving trucks on their own. It's a one data point. Start falling some supply data to now. On the next episode we're going to get specific.
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Unknown
Okay, I'm going to walk you through the ten markets in my mind. And based on the data that are actually printing money right now, and also the ten everybody is scared of and why some of those scary markets are exactly where you should be hunting. That is going to be in part three. So if you want to read the full report, the 2026 House Flipping Market report, just click the link in the show notes.
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Unknown
It's completely free, by the way. Just something that I'm passionate about is the data. So we put that together for our community at seven Figure Flipping. We want to give it to you guys. So here's your homework. Now I want you to find out two things about your market. How much new construction is going up near where you buy.
00:11:37:13 - 00:11:59:17
Unknown
Feel free to use AI to help you and what your months of supply is in your market. Like what are the months of supply? So if you're competing with a wall of new builds, you're underwriting scouting account for those. So here's what I need you to do right now. Go drop a comment in the comment section of wherever you're listening to this or watching this weather.
00:11:59:19 - 00:12:19:17
Unknown
After you do this quick research. What is your market on the up list or the down list? So I got top ten. Bottom ten. Where are you at on that list, and what are you seeing on the ground that maybe the data is missing? Now if you're on Apple or Spotify, do not forget to leave me a five star review.
00:12:19:17 - 00:12:28:05
Unknown
It helps me to find more investors to share good information with. I hope you guys got a ton out of this one, and I'll see you on the next one.
