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Where are the most recession-proof housing markets? We take a look at the data for 2023 and how to protect your real estate investment on the rental market.

Where are the Most Recession-Proof Housing Markets in 2023?

Recessions are unpredictable. In fact, experts can’t seem to agree on whether the US is or isn’t headed for recession in 2023. This uncertainty itself can bring instability to the real estate market, with many people waiting to see what happens before they put their money in a home. 

In the past, recessions have often triggered dramatic drops in housing prices, which can be good news for homebuyers, but bad news for homeowners, mortgage holders and anyone without good job security. 

Thankfully the housing market looks very different now than it did in 2008, when the Great Recession hit. There’s been a shift in supply/demand and more homeowners have had an opportunity to build equity in their homes off the back of historically low interest rates. This has made the market less fragile and many areas have even held quite strong despite rising interest rates. 

But where are the strongest markets in the US? Which states will be most resistant to huge drops or deemed to be “recession-proof” housing markets? While no one can be certain, many real estate analysts have weighed in on this topic recently. In this article, we’ll give you a brief overview of some of this data. 

Which housing markets are at risk during a recession?

Recession or not, we already know that the housing market shifted in 2022 from years prior. Interest rates spiked from historic lows and after a pandemic fueled buying frenzy in regional markets, prices began to slow and settle. Supply is starting to open up as homes stay on the market longer. 

Real estate researchers at Redfin noted that some of the pandemic’s hottest markets are the ones most likely to experience a downturn. After outpacing other markets in price growth and migration, they are now at risk of losing the value gained since 2020. 

Redfin predicts the top 10 housing markets most at risk of a downturn in 2023 are:

Most of these markets are now facing either unaffordability with interest rates rising on top of high prices, or people returning back to other regions after moving during the pandemic. 

Which housing markets are tipped to be the most resilient in a recession? 

The same Redfin data lists markets that are still affordable in Rust Belt metropolitan areas as the most resilient housing markets. 

Redfin predicts the top 10 most resilient housing markets of 2023 will be:

This list is based on a risk assessment of the markets with the lowest chance of a housing downfall if the US enters a recession. Factors influencing these scores include lower price volatility, low debt-to-income ratio and affordable housing. When houses remain affordable, they are more likely to attract buyers and investors. 

Boston is a notable outlier on this list, however price growth didn’t hit this area quite as hard when many migrated out during the pandemic, pushing up prices in other regions. 

Single family homes are resilient real estate assets

Housing markets play a big role in the price and value of homes, but the type of home plays a part too. There’s no such thing as a “recession-proof investment”, but in terms of real estate, single family homes can hold tremendous value. 

Large single-family homes, particularly in spread-out neighborhoods, typically remain in high demand and are more likely to hold their value in a recession (or any kind of economic downturn). 

Single-family rentals can make for resilient investments too. In a recent article, Roofstock reported that single-family rentals (SFRs) have provided nearly identical returns to the stock market — but with far less volatility. This makes owning a single family home an attractive investment option to build or diversify your portfolio. 

If you own a single-family home in a market affected by a downturn, you won’t get much in the way of appreciation on your home until things bounce back. However, if there’s scarcity for single-family homes and you can offer good space in a nice neighborhood, it’s likely that demand will remain steady for your home on the rental market and price decreases won’t hit as hard as the apartment market.  

In fact, when homeownership declines, people are likely to stay renting for longer, opting for a single-family home with more space to stay long-term and even grow their family, rather than choosing a cramped apartment. 

Protecting your real estate investment during a recession

There are two key ways to protect yourself during a recession: 

1. Have a stable source of income (positive cash flow)

When interest rates rise and the risk of residents falling behind in rent increases, this might bring little peace of mind to owners of rental properties.

Belong is turning this around and making it easier for homeowners to protect their single-family home investments during a recession. For starters, we’ll ensure your rental income is stable and predictable, by optimizing the rental price for your market and guaranteeing rent every month. Regardless of when your residents pay, you’ll always know exactly how much income will be coming in and when. 

When it comes to debt, you’ll always know where you stand too. Unlike traditional property managers, Belong never charges hidden fees for the essentials in taking care of your home. If unexpected costs do arise, such as maintenance or repairs, there’s no need to max out your credit cards. All Belong homeowners are pre-approved for our innovative Split It financing option. This allows you to access our extensive vendor network and spread the cost over the term of your lease agreement, keeping your cash flow positive and debt down. 

Discover Belong PRO, the best alternative to Property Management in Seattle, Redmond, Oakland, and many more cities across California, Florida and Washington State.

These regular and seasonal maintenance jobs are key to keeping your rental property profitable and in good shape all year.

The Annual Maintenance Checklist for Rental Homes in Florida

The Florida rental market has heated up like no other, making places like Miami and Tampa ideal locations to own an investment property. But a home in disrepair isn’t going to attract good residents or the right price for the market. Regular maintenance on a rental is key to keeping the home profitable and in good shape — identifying any issues or necessary repairs before they become costly headaches. 

While Florida really only experiences two seasons a year (hot and less hot), it’s not immune to wild weather. This annual maintenance calendar will give you an idea of the kind of repair, prevention and maintenance items you should cross off your list every season for a rental home in the Sunshine State. Some of these items you can ask your residents to manage, but some you will need to check for yourself in annual or quarterly inspections. Or, if your home is looked after by Belong, we can handle the lot — from speaking with the residents about issues to making repairs with our extensive network of professional contractors. 

Homeowners should also be aware of their obligations under Florida’s landlord-tenant statute to keep the property in good repair and ensure the home is habitable. If you fail to do so, your resident has the right to withhold rent, provided they issue you with a notice of their intent. You will be given seven-days notice to correct the defect/s and the resident can’t be forced to pay rent or threatened with eviction during this period. 

Spring Maintenance Checklist for Florida Rental Homes

Spring is the end of the dry season in Florida, which makes it the perfect time to tackle any maintenance issues and inspect for any leaks or cracks before the wet season begins. Servicing your HVAC or air conditioning unit and cleaning out filters is another must, before the mercury rises and contractors get busier (and more expensive!). 

It’s also a good time to do an annual inspection of smoke alarms, plus any fire extinguishers, CO detectors, and sprinklers to make sure they are working properly. 

Check the HVAC or air conditioning unit and clean filters before summer hits 

Inspect and test any fire safety systems such as fire extinguishers, CO detectors and sprinklers 

Mow the laws and remove any weeds as they start to appear

For homes with pools, have the water checked and cleaned to prepare for summer

Hose down any decks — if they need maintenance, now is a good time to reseal and treat for rot 

Check for leaks in the ceiling or any signs of water damage to repair before summer and fall rains set in and problems deepen 

Summer Maintenance for Florida Rental Homes

May to October is the wet season in Florida, making summer hot and humid. When the moisture and humidity rises, so too does the mold so be sure to make sure there’s no damp spots or moisture damage in the home and that rooms are being kept well ventilated. You can recommend that residents use basic moisture absorbers (such as DampRid) in dark areas that attract mold, like closets and laundry rooms.

If your home is prone to infestation, or your residents have concerns, now is the time to inspect for insects and rodents after the spring breeding season. 

Florida is also prone to severe storms and hurricanes, with the season peaking around August - September. You can check your address on FEMA’s Flood Map to find your flood zone category and risk of property damage during summer and fall. If you are at risk, check your insurance coverage and look at the National Flood Insurance Program. 

If your home has hurricane shutters installed, be sure to check their condition and make sure any electrical systems are functioning or hand-cranks are moving easily. If you don’t have any installed, now would be a great time to consider them to protect windows from flying debris. They also offer great insulation and protection from burglaries for your residents.  

Inspect and control any pest infestations such as insects and rodents

Check any supplied appliances such as refrigerators and washing machines

Check insurance coverage before hurricanes and storms set in 

Check property for any damage or loose fittings that could become an issue during storm season

Fall Maintenance for Florida Rental Homes

If your rental home has a lawn and yard, the big dose of sun and rain may have encouraged it to get a little unruly. Your trees may have also been damaged during summer storms. Fall in Florida is a good time to give gardens some love to ensure you maintain curb appeal and function. 

While you won’t see the traditional colors of fall the way you would in Vermont, there are Floridian trees that will drop their leaves and clog your gutters. If your home has one, make sure gutters are cleared as clogs can saturate your roof and cause leaks. 

Inspect roof and gutters, clearing out any debris 

Check bathroom caulk and grout for any potential issues and leaks before winter

Check garbage disposals as these get frequently clogged and lead to repair issues

Check insulation and drafts around windows and doors to fix before winter

Winter Maintenance Checklist for Florida Rental Homes

No need to worry about snow plows or frosty pipes, winters in Florida are the mildest in the US. However, as a homeowner you still have a responsibility to your residents to provide heat, especially hot water. Don’t neglect the water heater in your rental home — a yearly flush can prevent pipes from bursting and let you identify problems or leaks before they get worse. No hot running water gives residents cause to stop paying rent, an outcome far more expensive than maintenance. 

Florida rental owners take note: These regular and seasonal maintenance jobs are key to keeping your rental property profitable and in good shape all year.

The Annual Maintenance Checklist for Rental Homes in Washington State

With a diverse cultural scene, spectacular national parks, and a strong job market fuelled by big Seattle-based employers, life in Washington state is an enviable one. The Pacific Northwest is an attractive and liveable location and with Seattle’s renter population growing at twice the rate of the owner population, it’s a great place to own a rental property. 

But a home in disrepair isn’t going to attract good residents or the right price for the market. Regular maintenance on your Washington rental is key to keeping the home profitable and in good shape. 

This annual maintenance calendar will give you a general idea of the kind of repair and maintenance items you should cross off your list every year for a rental home in Seattle or the Greater Washington State. Staying on top of the condition of your home can save time and money in the long run, helping to identify any issues and necessary repairs before they become costly headaches. 

Some of these items you can ask your residents to look after for you, but some you will need to check for yourself in annual or quarterly inspections. Or, if your home is looked after by Belong, we can handle the lot — from speaking with the residents about issues to making repairs with our extensive network of contractors. 

Read More: Find Out Who Outshines the 7 Top-Rated Property Managers in Washington

Spring Maintenance Checklist for Seattle Rental Homes

When spring cleaning time hits, it’s also time to get on top of home maintenance jobs — which includes any rental homes you own. When spring blooms, gardens can get overgrown and pests might make themselves at home for breeding season. The best prevention for rodents is a clean yard with no trash near entry points, so now is a great time to trim trees and hedges, clear away any debris or rubbish and have a rental inspection to make sure your home is in good condition inside and out. 

While Washington state doesn’t get a huge amount of snowfall, these conditions have been on the rise in recent years, so it’s a good idea to check that any ice and heavy falls haven't caused issues for the home over winter. When snow starts to melt, water can seep into cracks and leak into your home, so check for any damage and seal any issues before they worsen. 

Mulch lawns as needed to improve water retention and minimize hose watering

Check the HVAC or air conditioning unit and clean filters before summer hits

Check the exterior of the house for any signs of damage or dirt buildup over winter — it might be a good time to give sidings a clean 

Check the roof and guttering for cracks and leaks

Ask residents to make sure food containers are sealed and trash cans are not too close to entrances in the home

Summer Maintenance for Seattle Rental Homes

Summer may not always clear the cloud in Seattle, but the city’s rainy reputation is put on hold with milder, dry conditions. If spring has been too wet, make summer the time you check your home for any cracks or leaks to repair before wet conditions make a comeback. 

Summer also brings out pests after the spring breeding season. Unfortunately, rats and mice love the Puget-Sound region, so if your home is prone to infestation, or your residents have concerns, now is the time to inspect for rodents and/or insects. 

If your property has a chimney, it will also need a regular checkup. Chimneys remove dangerous gasses from the fireplace or furnace to keep the air breathable, so it needs to be inspected before the weather cools and it gets used by residents. 

Operate automated sprinkler systems if your home has one

Check roof and gutters for cracks and leaks

Check for leaks in the ceiling or any signs of water damage to repair before fall and winter rains set in and problems deepen 

Check any chimneys and ensure they are clear and functioning

Fall Maintenance for Seattle Rental Homes

The rain is coming! While Seattle may not be the wettest city in the US, its reputation as ‘Rain City’ isn’t undeserved and November brings the heaviest falls. Combined with the falling leaves, this makes gutters your biggest priority for home maintenance in fall. If gutters get clogged and water can’t flow, it could saturate the roof and lead to deterioration or leaks. 

Worse still, if left unchecked for winter, water that pools along your roof and in gutters can freeze, creating ‘ice dams’. This can cause expensive dramas — think damaged gutters, torn roof shingles and leaks into your home. 

Mold and mildew is another issue that can creep in during winter and fall months. When residents keep homes locked up tight and crank the heater, the contrast of temperatures mixed with a lack of ventilation = mold and mildew. Remind residents to keep the home well ventilated, such as running exhaust fans in the bathroom during and after a hot shower and opening windows on clear days. You can also recommend that residents use basic moisture absorbers (such as DampRid) in dark areas that attract mold, like closets and laundry rooms. Not only will it save your home, it will save their clothes and shoes.  

Rake leaves/have residents rake leaves and maintain yard

Prune trees and plants of any heat damage from the summer heat 

Shut off any automatic sprinkler systems that have run through the summer

Seattle rental owners take note: These regular and seasonal maintenance jobs are key to keeping your rental property profitable and in good shape all year.

Legislation has a ripple effect on the real estate markets. So which ballot initiatives passed and how will they impact landlords and real estate investors?

Which 2022 Ballot Initiatives Passed and How Could They Impact Homeowners?

We recently wrote about the 2022 Ballet Initiatives that could impact homeowners and the real estate market. This is because property availability, prices and investment potential are all influenced by local factors such as interest rates, economic cycles and legislation.

In a follow up to that article, here are the latest updates (current as of November 17, 2022) on what passed and what didn’t — and the potential impact on real estate investors.

1. Proposition 30: California’s Wealth Tax

California proposed a Wealth Tax to support clean air programs, generating funds for electric vehicle (EV) incentives and wildfire prevention. While wealth taxes aren’t often billed as for millionaires, they work in a similar way to property taxes, where taxes are based on the value of your assets. This include any residential or commercial property you own. This makes it one to watch for any states where you own — or even inherit — property. 

Status: Defeated, with 58% voting ‘no’ on Proposition 30

With the ballot defeated, this is no longer an immediate concern for homeowners and real estate investors in California. That doesn’t mean that wealth taxes aren’t still on the agenda across the country. In fact, voters in Massachusetts have passed a similar measure, approving a 4% surtax on annual income over $1 million to fund education, road infrastructure, and public transport.

It’s worth keeping an eye on this on a federal level too — France, Portugal and Spain are all countries with a ‘wealth tax’. 

King County in Washington State proposed a property tax levy to fund the acquisition and preservation of urban green spaces, natural areas, wildlife and salmon habitat, trails, river corridors, farmlands and forests. The conservation futures property tax level will be charged at a rate of $0.0625 per $1,000 of assessed value for collection in 2023. 

Status: Approved, with 69% voting yes on Proposition 1

For homeowners in Washington state, your property taxes will be affected by this measure from 2023. In terms of how it will affect the Washington real estate market, the conservation efforts that it funds will contribute to a healthy and prosperous community, keeping cities like Seattle desirable places to live. It will protect residents from issues such as excessive heat, poor air quality, or flooding — all of which can contribute to a loss of income for homeowners through reduced rental pricing or repairs to your investment home. 

3. Florida’s Flood Resistance Improvements

Florida’s Amendment 1, ‘Disregard Flood Resistance Improvements in Property Value Assessments Measure’, sought to incentivize homeowners to take proactive measures to protect their property from flooding, with the value of any improvements excluded from property tax evaluation. 

Status: Defeated, despite 57% voting yes. A supermajority of 60% was required for the approval of Amendment 1. 

Florida experiences the highest amount of property value losses due to flooding, which has an obvious impact on anyone investing in real estate in the area. While there won’t be an incentive on property taxes to take a proactive approach to improving your Florida property, it could pay off to do so anyway by minimizing the loss of value or cost of repairs should your property be in a flood zone. There are also resources available for anyone considering investing in Florida to check property addresses for the risk of flooding before purchasing. 

Additionally, in 2022-23, legislation from the Florida House will dedicate $100 million to mitigate the impacts of flooding on homes and businesses. 

Florida Amendment 3 sought to lessen the financial burden on public service workers looking to buy a home in Florida. The Additional Homestead Property Tax Exemption for Certain Public Service Workers Amendment would provide an additional tax exemption on $50,000 of assessed value on property owned by teachers, law enforcement officers, emergency medical personnel, active duty members of the military and Florida National Guard, and child welfare service employees.

Status: Defeated, despite 58% voting yes. A supermajority of 60% was required for the approval of Amendment 3. 

Home values and property taxes are increasing rapidly in Florida and the amendment sought to provide a financial break to essential workers who are supporting the community. While defeated by a single no vote from State Senator Bobby Powell, it was not because he didn’t support financial initiatives for essential workers. “I don't think that us putting another homestead exemption on the ballot alleviates or helps with the situation that we're currently facing. I am of the belief that the priority at this point should be to figure out how we can get police and firefighters and teachers into a home, whether it be first-time homebuyers, whatever it be, we need to figure out how to get them into homes,” said Powell.

For essential workers, this means new initiatives could be proposed in future to support home buying. For real estate investors, it could mean a shift such as a reduction of stock suitable for the rental market if more first home buyers enter the market. 

Other noteworthy ballot measures to watch

1. San Francisco’s Proposition M, the “Empty Homes Tax” 

San Francisco is warning real estate investors that they could face additional taxes for keeping vacant properties, with Proposition M, Create Tax on Certain Vacant Residential Units Initiative.

From 2024, property owners with at least three units that have been vacant for more than six months will be taxed $2,500 - $5,000 per empty unit, with penalties set to increase yearly to up to $20,000. Money collected will be invested in subsidizing affordable housing in the city, including for people over the age of 60. 

Status: Too close to call, projected to pass

Larger and professional real estate investors who hold multiple units will be directly impacted by the measure. To avoid financial penalties they will need to put empty units up for rent or sale. This would increase the available inventory of both rentals and units for sale in San Francisco — having a direct impact on pricing for the city. 

Individual investors, like those that Belong supports, are less likely to be financially impacted by the measures at this stage, with single-family homes and duplexes exempt. That said, it’s a timely reminder that many counties are actively taking steps to reduce empty homes while the homelessness crisis continues to bite and more families are priced out of home ownership. 

It’s not uncommon for homeowners to sit on a vacant home for a variety of reasons. Some have inherited a family home and aren’t sure if they’re cut out for property management. Others move for work and plan to return to the home and feel unsure about renting the home out. If this is the case, Belong has a solution. We find people that will love and respect your home as much as you do, while also doing all the work to ensure it’s looked after and maintained. We can even help you move out if you’re relocating. Learn more about Belong’s unique residential network and homeowner services here. 

2. Pasadena’s Measure H, Rent Control Initiative 

Rent control measures in California are back up for debate, with Pasadena going to vote for Measure H, Charter Amendment For Rent Control Initiative. The initiative would establish an independent board that will limit rent increases to 75% of the CPI increase and provide enhanced eviction protections, requiring homeowners to have just-cause. 

The rent-increase caps do not apply to multifamily rental units built after February 1, 1995, and most single-family homes and condominiums; however, the eviction protections do apply.

This is billed as a win for renters, who have been getting priced out of the rental market or evicted only to have the home listed for a higher price. 

Melanie Kershaw

Mel Kershaw is a Content Lead at Belong. With an extensive background working with technology companies including Eventbrite and Yelp, she’s always looking for ways to create educational and informative articles that simplifies tech and solves problems for her audience.

Lauren Slagter

Tyler Infelise

Flora Fiorillo

Eric Vandekerkhove

Ale Resnik

Lauren Slagter

Tyler Infelise

Flora Fiorillo

Eric Vandekerkhove

Ale Resnik