What are currently the hottest real estate markets?

Question

Hi everyone, I just joined the BP community and am considering making my first investment. My question is - what are currently the hottest real estate markets in the US, and more importantly, how do you evaluate real estate markets as a whole?

I'm currently considering Houston, Dallas, Austin, Nashville, and Chicago (the former 4 because of the relatively low housing costs, and Chicago because I used to live there and am somewhat familiar w/ the neighborhoods). The TX areas have already appreciated quite significantly over the past couple of years - is there more room to grow? I'm looking for a set of criteria on which to evaluate the potential growth of a market. At the very least, I want to avoid property value decreases. My goal is to generate cashflow, and any added appreciate is a bonus. I'm comfortable investing ~$20-25K (so ~$100K property value assuming 20% down).

Gonz Trevino · Answer

I'm prospecring in that area. Officially I don't own a house there but I do less than 10m away in New Braunfels. I'm waiting to pounce on a good deal in San Marcos. :)

Jorge Aguilar · Answer

@Gonz Trevino  are you currently investing in the San Marcos area?

Saberian Younger · Answer

Yup alot of tech here in Austin.

Hugh Ayles · Answer

In Austin many of the jobs are computer related - Apple, Google are the biggies increasing jobs here.

We are getting a little manufacturing.

I don;t think the energy sector had much presence here so we have not felt the affect of the rapid build up or decline.

Steve Burt · Answer

Where are all these jobs coming from in Texas? The energy sector is beaten down, and for Fort Worth in particular, there are not that many big companies HQ'd there

Scott Beck · Answer

Welcome @Jimmy L. to the BP community.

For Texas related real estate information check out the Real Estate Center at Texas A&M website (www.recenter.tamu.edu/). This site contain information on the Texas economy including an outlook for where the economy is headed. You can find a lot of information on specific Texas markets on this site.

Good luck!

Charlie Kleindinst · Answer

Other than studying the MLS, I get a lot of Realtor insider news letters which really help me determine what's going on in the market as a whole. Also networking with other real estate professionals will help you understand where markets may be going.

As of October 6th :

Austin has come out on top in a study of large U.S. cities with the  fastest-growing economies since the recession of 2008, according to a comprehensive study by  WalletHub.

WalletHub, is a personal finance company, that compared the socioeconomic  strengths of more than 500 U.S. communities in order to put together its study.

Quote: "Austin topped all large cities with a cumulative score of 67.91. Two  other Texas cities — Fort Worth and Corpus Christi — are in the top five  on the large-city rankings — at No. 3 and No. 5, respectively. Also in  the top five are Miami, Florida, at No. 2, and Denver, Colorado, at No. 4"

Austin is still in the top ten cities of any size.

Below is a list of  the top 20 cities of any size, with the fastest-growing economies.

1. Odessa, Texas

2. Frisco, Texas

3. Midland, Texas

4. Mission, Texas

5. College Station, Texas

6. Killeen, Texas

7. Kent, Washington

8. Bryan, Texas

9. Austin, Texas

10. Round Rock, Texas

11. McKinney, Texas

12. Edinburg, Texas

13. San Marcos, California

14. Pharr, Texas

15. Allen, Texas

16. Concord, North Carolina

17. Miami

18. Fort Worth, Texas

19. Denver

20. Asheville, North Carolina

If you need a snap shot on the Austin market or a particular area I'd be happy yo help. Just PM me.

Nadav Givoni · Answer

Jimmy,

I'm here living in Austin and compared to SF the home prices look good, but...I'm not sure how much more appreciation you're going to see if you throw your hat into the ring right now.  I've been keeping an eye on the MLS and there's been a recent round of price decreases on properties in central austin in the last few weeks.

I can't say with any level of certainty that things are slowing down, but I would try to get a hold of a local real estate agent and try to get a picture of home sales and trends.

I would also look at the long term growth of Austin, employment, etc and where the city is heading.

My 2 cents.

If you have any questions you can ping me directly.

Regards,

Nadav

Jimmy L. · Answer

Thanks. Any advice on what high-level trends to look for in evaluating a market? i.e. employment growth, income levels, etc.