House-buying franchise HomeVestors, and real estate forecaster Local Market Monitor compiled a somewhat surprising list of the top 10 cities that are good bets for real estate investment at the end of 2015. The fourth quarter data ranks 10 metros that will likely be good rental markets and where home prices are poised to increase at a healthy rate over the next few years.
The list did produce some surprises, and a lot of variety. Florida has two cities on the list, only bested by Texas, which has three.
Grand Rapids, Mich., took the top spot on the list, with Orlando coming in second. Tenth on the list is Ft. Lauderdale. The other cities are scattered around the country– two in the Northwest, one in Utah and another in North Carolina.
The criteria used to include markets in the analysis were:
- Population growth of 4 percent or greater
- Current rate of job growth of 2 percent or better
- Low unemployment
The criteria are largely based on the assumption that new residents will move to a city in search of work, rather than the unemployed taking available jobs. Markets with small populations were excluded from the analysis.
For the analysis that produced the rankings, the companies chose cities that have strong job markets, and nearby, healthy industries that are showing employment growth. They say that since housing construction stalled in the wake of the recession, now healthy metros will be constrained by low inventory.
“Due to a shortage of home construction since the recession, local housing markets with a strong economy will experience more demand than supply in the next few years,” said Ingo Winzer, president and founder of Local Market Monitor, in a statement. “This will create higher priced homes and rising rents.”
The complete fourth-quarter 2015 Best Markets Top 10 list for real estate investing is:
- Grand Rapids, Michigan
- Orlando, Florida
- San Antonio, Texas
- Dallas, Texas
- Austin, Texas
- Portland, Oregon
- Seattle, Washington
- Charlotte, North Carolina
- Salt Lake City, Utah
- Fort Lauderdale, Florida
David Hicks, co-president of HomeVestors, pointed out that price appreciation in the cities on the list have increased by at least six percent. And, they are poised to continue climbing. These cities, though, still are a good value for investors. While other cities in the country are seeing price appreciation well into the double digits, these cities have plentiful jobs and reasonably priced housing available– not a pairing that many cities can claim.
