10 Best and Worst Markets for Real Estate Investors – Developments
Tulsa, Okla., Albany, N.Y. and San Diego, Calif. have shot onto the list of the 10 best markets for conservative residential real-estate investors, according to an updated report by Local Market Monitor, Inc. Since its earlier ranking in August, Phoenix and Naples, Fla. are no longer among the most dangerous markets for investors, the company says.
The Cary, N.C. firm, which analyzes trends for lenders, builders and investors, compiled its newest Investor Suitability report using data through Sept. 30 for 315 U.S. markets. The firm is known for its housing-market forecasts using “equilibrium” home prices, what home values probably should be in relation to population, job growth and income. Knoxville, Tenn., and Greenville, S.C. dropped down the list of favorable markets.
The report excludes towns with less than 200,000 residents and focuses on price-appreciation rather than rental income. High-ranking areas for investor suitability are places where there’s a positive three-year home price forecast, employment is stable and only a small share of jobs are in highly volatile industries such as construction and financial services. The best markets for conservative investors show signs of price stabilization; dangerous markets are those where it appears prices will fall further and probably won’t turn around soon because of poor local economies. Speculative markets are those with higher upside potential, but more risk.