How to Choose a Good Market

[Dana Boyd]

I live in California and as we know, its a huge state! There are a lot of very expensive areas but there are also some cheaper areas if you know where to look. Trying to narrow my choices of a good market to invest in and wondering if anyone has any advice. Any tips on how to pick a good market? What factors should be considered? What indicators should I look for? Any tips at all are very much appreciated. Thanks! 

[Rami Aweti]

Hi @Dana Boyd

The first step is identifying which market you are in. In real estate, there are primary, secondary, and tertiary markets. These markets can feed off another during a market cycle. Let's look at the Bay Area as an example: San Francisco (primary), Oakland/East Bay markets (secondary), and Sacramento (tertiary). The growth in San Francisco spills over to the East Bay and eventually makes it's way to areas like Sacramento. If the market crashes (not that I think it will), you want to be looking in the primary and secondary markets. 

The next variable is population growth. You can find city data here or see if your nearby cities show up on the fastest growing cities list. These are all good resources to use in conjunction with a Zillow search. I wrote an overview on this topic here as well.

Let me know if you have specific questions about your local market and I'd be happy to help!