Everyone seems to have a list of best markets for investing in real estate today, including Forbes. They recently came out with their Top 20 List – and not surprisingly, many of the cities were the same as Real Wealth Network’s list.
Forbes dug into the numbers with the help of a North Carolina-based company that tracks housing markets. It says Local Market Monitor used data from 300 markets, to come up with the best places to invest this year.
Many cities on this list are good for both rental investing and a place to call home. The states with the most hot spots are Texas and Florida but there are three cities in California, and one in the Northeast that may surprise you.
Local Market Monitor says that home prices in every city on this list are expected to grow by at least 17% in the next three years. Many are also below the full market value compared to historic prices and income level.
Most are also below the national average of $268,000. Data on population and job growth is from 2012 through 2015.
Topping the Forbes list is Dallas, Texas. It rose from the sixth position on the Forbes list last year. Home prices have been rising an average 9% per year and, according to Local Market Monitor, will top the list for appreciation by 2020. Strong population and job growth are contributing to those gains. Homes are considered undervalued with an average of $233,000.
We started recommending Dallas as a great investment back in 2005, when home prices were around $134,000. Everyone told us then that “nothing happens in Texas,” but we knew Dallas and Houston had highest job and population growth in the country, while housing prices were 26% undervalued. Investors who bought then hopefully held onto their properties!
Jacksonville, Florida, is second and the first of four Florida cities on the list. As with most cities on the list, Jacksonville is also seeing a 9% annual home appreciation rate. Job growth has been 4.1% and population growth 5.1%. Home prices are averaging $225,000. That’s about 8% below historic prices when you take income levels into consideration.
Our preferred turnkey income property team in Jacksonville is offering investors fully renovated properties for about half that average home price, so there could be an even higher upside there.
Orlando, Florida, comes in at third place with population growth that’s hitting 7.2%. Job growth was 4.4%. Average home prices are $219,000. Our preferred turnkey income property team in Orlando is also offering investors fully renovated properties for about half the average home price, so there could be an even higher upside there. No wonder there’s a wait list!
Seattle is fourth on the list with higher home prices and strong appreciation. Prices rose 12% last year for an average price of about $416,000. Local Market Monitor says population and job growth are so strong builders are having a tough time keeping up. That’s also creating a strong rental demand in Seattle, but unfortunately it’s tough to get cash flow on a $416,000 property.
West Palm Beach came in 5th, Home prices there have been going up about 11% per year and now now average $313,000. Job growth has been about 1.9% with a population growth of 4.7%, probably due to incoming retirees. Local Market Monitor says despite the rise in home prices, these homes are still undervalued.
Salt Lake City made the list as number six. Annual home price growth is about 8% but homes are now at full market value. The average is $277,000.
Tampa – St. Petersburg made number seven on the list. Home prices there are averaging $213,000 with a 9% price appreciation. Population growth has been strong at about 4.5%. Tampa is also on our Real Wealth Network list of best cities to invest, and our team is able to find properties for half that median home price – but not for long.
Nashville, Tennessee, is eighth on the list with 9% annual home price growth. Three-year population growth in Nashville has been the fastest on this list at 6%. Homes there are still underpriced by about 7%. The average price is $249,000.
Fort Worth, Texas, is ninth, with home prices rising 9% for an average of $206,000. Job growth rose 5.2% from 2012 to 2015.
Grand Rapids, Michigan, is tenth. It dropped from the first position last year. Home prices are the lowest on the list at an average of $166,000. Local Market Monitor says that Grand Rapids and Atlanta “still hold bargains”. It says: “All these markets have upside price potential without the risk of a local bubble.”
On the second half of the list, in 11th position, is Sacramento, California, where home prices are averaging $291,000. That’s a bargain for California!
Charlotte and Raleigh, North Carolina, take the 12th and 13th spots. The average home price is a little cheaper in Charlotte at $235,000 which is 11% undervalued. In Raleigh prices are 15% undervalued with an average of $254,000. They have both experienced a rapid three-year population growth of 5.7% in Charlotte, and 7.1% in Raleigh.
San Diego, California, hit the list in the 14th position. Average home prices there are $436,000 with a 6% appreciation rate. Job growth rose about 2.2% and population grew 3.6% during 2012 and 2015.
Las Vegas is 15th with a $200,000 average home price. That’s about 15% undervalued, according to Local Market Monitor. Las Vegas was hit hard by the financial crisis but people have been moving back in at a rate of 5.9%. Job growth has been about 1.9%.
Boston, Massachusetts made the list in 16th position. It’s the only Northeastern city to do so. Average home prices are $371,000 with a 6% appreciation. They are still considered slightly undervalued.
Columbis, Ohio, is 17th and tied with Grand Rapids, Michigan, for the most undervalued cities. Local Market Monitor says prices are still 25% below their historic ratio of price to income. Average price is $207,000 with a population growth rate of 3.9% and a job growth rate of 1.6% from 2012 to 2015. The job growth rate was the lowest on the list.
Atlanta, Georgia, was 18th. It’s the largest city on the list with 5.6 million people. Population grew 4.7% between 2012 and 2015. Home prices were up 8% last year, but Local Market Monitor says they are still undervalued by about 17%. The average price is $213,000.
Phoenix, Arizona, is on the list at 19th best city for buying a home. Prices were up 7% last year with an average of $243,000. Population grew by 5.7% from 2012 to 2015.
Source: Best Buy Cities: Where To Invest In Housing In 2017 – Forbes
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