Another "Best/Worst Markets for Real-Estate Investing" List
A recent article in the Wall Street Journal describes the best and worst markets for conservative real estate investors, based on data from Local Market Monitor in Cary, NC.
The report, focusing on potential price-appreciation, rather than rental income, looked at just single-family homes. It analyzed data similar to that used in the firm’s housing-market forecasts—“equilibrium” home prices, which predict what a market’s home values should be in relation to incomes, job growth and population.
The new report says if you’re a conservative investor, the best markets are where there is a low probability that home prices will fall further. The top five are:
- Durham, NC
- Huntsville, AL
- Indianapolis, IN
- Knoxville, TN
- Lexington, KY
In these markets, according to the report, income is growing moderately and employment is stable because a large percentage of jobs are in healthcare, education, rather than construction and financial services.
Experts caution that education and healthcare jobs could see cuts later in the economic cycle, so these areas could yet experience some downturns.
The so-called speculative markets are those where investment housing values could continue to fall but then could appreciate more than 3% – 5%, according to the study. These are better for investors willing to take more risks, and include:
- Hagerstown, MD
- Jacksonville, FL
- Port St. Lucie, FL
- Modesto, CA
- Myrtle Beach, SC
“Dangerous” places for real-estate investors, where home prices are still falling and local economies are unstable, include:
- Reno, NV
- Las Vegas, NV
- Naples, FL
- Orlando, FL
Rounding out the “10 Worst” markets for single-family real-estate investment properties are Phoenix, AZ, Prescott, AZ, and four Florida cities: North Port, Fort Myers, Daytona and Lakeland.
The rest of the “10 Best” markets are Jackson, MI; Oklahoma City, OK; Little Rock, AR; Greenville, SC and Winston-Salem, NC.
As with any investment, real-estate investors must do their homework—especially when buying in areas where they do not live, know the local market or have good real estate contacts. Caution is always key!
August 25th, 2010 at
Finally some good news about Knoxville real estate! Thank you!!! Now, calling all buyers the time to get off the fence is now. When people start buying homes jobs are created - lots of them! Take advantage of the lowest rates in history and buy yourself a home.
August 29th, 2010 at
Fair and honest assessment of the market. I live in SWFL and can tell from first hand experience that a market turnaround is going to be long and difficult. Keep up the good work.
November 18th, 2011 at
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