Investing in real estate is much like making strategic investments in the stock market: Markets must be chosen carefully in order to maximize the long-term value of this investment, taking advantage of short-term and long-term trends. In real estate, there are decidedly some “winners” and some “losers” among major cities and metropolitan areas across the United States. Before investing in real estate, it’s important to understand the markets that are ripe for the biggest growth in home values over the long-term, since this can result in a significant accrual of wealth for smart investors. While the economic recovery’s rising tide continues to lift all boats, these markets are rising quite a bit faster than average and represent the best choice for today’s investors.
1. Austin, TX
Austin has developed a reputation for being “weird,” but there’s more to this city than its cultural diversity. In fact, Texas’ capital city has quite a bit going for it. As the political center of one of the country’s most populous states, Austin has ample opportunities for public servants, lobbyists, and lawyers. As a tech and entertainment hub, Austin also shines in terms of its white-collar job growth. As the home of the University of Texas at Austin, the city is also a major draw for the “eds and meds” that will drive the 21st century economy.
What does this mean for real estate investors? A growing population, rising home values, and long-term growth projections that make for a sound investment. According to industry experts, the Texas city ranks first nationally for investment, second for home building, and fourth overall for real estate investment.
2. Denver, CO
Colorado has become the center of a new progressive political movement as well as high-tech and “green” jobs. The state, notorious most recently in the national press for legalizing marijuana, also has some of the best regulations on the books for tech startups and green businesses. As these two sectors continue to grow their overall representation in the American economy, Colorado’s largest city of Denver continues to grow both its resident population and its home prices. The city was named the second-best investment market to watch for 2016, and the most recent Case-Shiller Index report notes that local home prices are expected to increase by at least percent during the upcoming year. Homes in Denver also sell much faster than the national average, according to Realtor.com, making it an excellent market for sellers and investors alike.
3. Miami, FL
Miami continues to grow and evolve as a major gateway to the Caribbean and South America, giving it a reputation as an international center of finance and investment. The city, which is also a hub of vacation and retirement activity for Americans from all corners of North America, is also an excellent choice for buyers and investors looking to maximize their return on a mortgage or cash payment. The city’s homes are expected to appreciate in value by at least 18.7 percent through the end of 2016. Given Miami’s excellent, beachfront location and its ability to draw top talent from the United States and abroad, this diverse market is a perfect fit for buyers and investors who want a quick, almost guaranteed return on their initial investment.
4. San Jose, CA
Some of California’s real estate markets have been through tough times in recent years, but that’s not the case in San Jose. This growing technology capital, located just a short distance from San Francisco, has recently been identified for high-tech campuses built by Apple and others. The city continues to grow its overall population, led by software and hardware engineers who are setting foot outside of the more traditional San Francisco tech scene. The city’s homes are expected to appreciate significantly in the year ahead, as well as over the long-term, as companies like Facebook, Apple, Tesla, and Google grow their office space and expand into entirely new communities close to their San Francisco headquarters.
Real estate markets are on the rebound, but some are faring far better than others. In states like California, Texas, and Florida, cities are growing because of their proximity to high-tech jobs, excellent weather, and recreational opportunities that maximize the value of each property bought and sold. These markets are the one to watch as 2016 gets underway and real estate investment season begins anew.