Top 20 Hottest Real Estate Investment Markets for 2010
In a national housing market fueled by tax credits, some areas hit bottom in early 2009 - at least for entry level housing. Multiple-offers and bidding wars continue in these areas despite an ongoing use of strategic defaults, notices of default proportionate to unemployment levels, legislation changes, government sponsored loan modifications, and a growing shadow inventory. If the national real estate market is like an ocean, with peaks, troughs, and tides, then where then should a real estate investor look for residential investment property?
FinestExpert.com's first annual Top 20 Real Estate Investment Markets, analyzes over 10,000 real estate markets according to the US Census data (covering over 95% of the US population) to identify the most suitable places for real estate investors to seek stable and growth oriented areas.
It is not enough for the home prices to be dirt cheap with no where to go but up (because they could hobble along at depressed rates for a long time). If it were that simple, real estate investors would be in a "land rush" to get back into the rust-belt.
Stabilizing and turning-around housing prices follows basic supply and demand principles. San Francisco based FinestExpert.com compiled a collection of key factors, such as strong employment, rental markets, and growth levels as offset by foreclosures, that combine to determine the "best" real estate investment markets.
It is important to note that these top 20 markets are identified as good buy-and-hold real estate investment markets (vs. a quick fix-and-flip … although those deals certainly exist as well). Consequently cash-flow positive properties were a critical component - which takes into account home prices, hyper-local rents, plus taxes, insurance and other operating expenses. All this information is wrapped up in FinestExpert.com's FE-Score5, the first of its kind quantitative rating system to score residential real estate as potential investment property. On a scale to 1,000, a truly hot cash-flow deal is any rating above 850.
Co-Founder, Robert Boyer said, "Everyone wants a deal, no matter what market they are in. FinestExpert.com tracks property prices and values to compute an effective "discount" for every property, thus allowing users to easily find the golden nuggets." In the table below, the column "discounted properties" documents how many listings (and the percentage of total listings) that are at least 10% below their estimated value.
For the first-time homebuyer, a good cash flow deal represents the ability to own for less than it would cost to rent. These make excellent starter properties, especially for someone who may want to one day become a real estate investor.
The Dallas-Fort Worth-Arlington, Texas metro area heads the list of best real estate investment markets for 2010, with twelve specific places to consider detailed at FinestExpert Blog (www.finestexpert.com/blog). The first subgroup is comprised of high-volume, active real estate regions to attract investors nationwide.
1. Dallas-Fort Worth-Arlington,TX (http://www.finestexpert.com/s/Fort-Worth-Texas/discounted-investment-properties-for-sale): 4,206 discounted properties, 773 cashflow positive
2. Houston, TX (http://www.finestexpert.com/s/Houston-Texas/discounted-investment-properties-for-sale): 5,563 discounted properties, 1,500+ cashflow positive
3. Tulsa, OK (http://www.finestexpert.com/s/Tulsa-Oklahoma/discounted-investment-properties-for-sale): 905 discounted properties, 211 cashflow positive
4. San Antonio, TX (http://www.finestexpert.com/s/San-Antonio-Texas/discounted-investment-properties-for-sale): 3,547 discounted properties, 496 cashflow positive
5. Salt Lake City, UT (http://www.finestexpert.com/s/Salt-Lake-City-Utah/discounted-investment-properties-for-sale): 1,137 discounted properties, 22 cashflow positive
6. Phoenix, AZ (http://www.finestexpert.com/s/Phoenix-Arizona/discounted-investment-properties-for-sale): 8,426 discounted properties, 2,000+ cashflow positive
7. Indianapolis-Carmel, IN: 1,257 discounted properties, 299 cashflow positive
8. Denver-Aurora, CO: 6,449 discounted properties, 562 cashflow positive
9. Oklahoma City, OK: 1,085 discounted properties, 212 cashflow positive
10. Charlotte-Gastonia-Concord, NC-SC: 3,348 discounted properties, 296 cashflow positive
This second list is composed of smaller areas worthy of consideration to more regional investors. In such cases, the strength lies more in the market as a whole than in available deals.
1. Ames, IA
2. Des Moines, IA
3. Southaven, MS
4. Killeen, TX
5. New Orleans, LA
6. Madison, WI
7. Midland, TX
8. Maricopa, AZ
9. Little Rock, AR
10. Nashville-Murfreesboro-Franklin, TN
Sources:
1 - Employment from US Dept Labor - Bureau of Labor Statistics - bls.gov/news.release/metro.t01.htm
2 - Rents organically collected nationwide by FinestExpert.com
3 - Growth - Population from US Census Bureau at census.gov/popest/cities/cities.html
Building Permits from US Census Bureau at census.gov/const/C40/Table3/t3yu200911.txt
4 - Foreclosures from RealtyTrac via marketwire.com/press-release/Realtytrac-1066597.html
5 - FE-Score from FinestExpert.com
About Finest Expert: Finest Expert provides technological solutions to instantly find investment worthy residential real estate opportunities, nationwide. They apply extensive investing and analysis experience to provide the first of its kind, nationwide real estate search for residential investment property based on property financial characteristics as well as the more common property and location characteristics. 10,000,000-plus homes for sale, foreclosures, and rental listings are processed and pre-analyzed weekly to enable real estate investors to replace hours of number crunching with just a few clicks.
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