Investing in real estate is simple on the surface, but market intricacies and anomalies can alter what would normally be a sound investment. Investors typically look for either short-term, or long-term, return on value, but market fluctuations may change short-term investments into long-term investments. A sound real estate market will coincide with a strong or growing job market, which encourages home-ownership and brings attracts new individuals to the area.
Grand Rapids, Michigan
Grand Rapids is located between Detroit and Chicago, serving as a mid point between the two big Midwestern economic centers.
According to the W.E. Upjohn Institute for Employment Research, unemployment has fallen 9.2 % since 2009. Employment is expected to continue to rise, with predictions pointing to an addition 2.5 % growth in 2017 as the W.E. Upjohn Institute reported. By combining key industries like life science, aerospace and defense manufacturing and information technology, with the traditional automobile manufacturing market, Grand Rapids has set itself up for continued economic growth.
The real estate market should benefit from the influx of money, and continued growth gives positive signs to investors. As more prospective tenants move to the area, investing in rental properties before the prices shoot up seems like a wise move.
The availability of land for development gives investors an option to buy before valuations increase.
The last economic downturn hit Florida particularly hard. The market in the Sunshine State is volatile, depending heavily on retirees and their perceived value of moving south. After the recession, the economy turned back into favorable conditions, but housing prices remained low. This, combined with the stabilization of financial markets, attracted many retirees back to Florida.
Since then, house prices have been on the rise, posting a 10.7% increase over the last year, and predicted to rise another 2.8 %, according to Zillow.
Tampa becomes attractive due to its ability for investors to buy low and sell high, or buy and hold onto homes as their value increases. As long as the economy stays strong, retirees will continue to move to Tampa, buy homes, and require services, which should further prop up the area’s economy.
San Antonio, Texas
The San Antonio market is driven primarily by low availability and high demand. Land prices are at a premium, making home building a difficult prospect. But the market is still undervalued, according to a 2016 Forbes Report. Healthy job growth, and the resulting population influx, has been pushing home prices upward.
Investors should look to get purchase real estate before the market balances itself. Zillow reports a low median home price of 131,000 dollars; with home values increasing 6.4 percent over the past year and an expected further 4.3 percent increase within the next year.
Homeownership should continue to become more and more non-viable, pushing the need for rentals. There is however, limited time to get in before the market overvalues. Low interests rates in Texas are further pushing consumers to snap up all available housing. It won’t be that long before the barriers to entry are too costly to consider San Antonio as an economically feasible option.