Which states have the best long-term potential?

[Tyler D.]

A lot of the investing strategy that I see here tends to aim for immediate/ short-term gains. Either with immediate cashflow or quick appreciation in currently booming markets. 

Cheap midwest states offer cashflow. TX and FL are booming, etc.

But I want to take a step back and talk about the long-term potential of different states. I have my opinion on which states offer the best long-term potential, and I'd like to know yours as well. As I see it, there are a few factors to consider:

History: Markets with a record of success have that success priced in, and vice versa. Big cities in CA and NY are absurdly expensive and often cashflow negative because they have a track record of appreciation that is expected to continue. Rust belt cities and dying small towns have the opposite. Low prices, high cashflow based on previous failure. 

When choosing states for their long-term potential, I'd prefer to choose states with a bad history (and a bright future), to get them at low prices.

Economics: The #1 driver for success of a city/state (and its home prices) is its economics. People willingly spend huge sums of money to live in big economic centers like NYC because of the opportunities that are available there. Currently, big cities, specifically those in CA and NY are facing issues such as high taxes, increased crime, etc. This combined with rising remote work opportunities are driving people to cheaper areas. 

I don't know exactly how this will play out, but I wouldn't bet on the currently expensive states like NY/ CA. We might see a long-term rush to the suburbs/ smaller towns, or it might be a temporary blip before we see people move back to the major cities. Still something to consider.

Weather: Specifically changes in weather. the world is slowly getting hotter, and some southern states like AZ are so hot that you basically have to stay locked inside in the summer. Interestingly, the states that most are flocking to now like TX and FL are the most vulnerable to temperature increases, and the states most insulated from this (northern states) have been being moved away from for years.

A shift up in temperatures over the next few decades could flip the current migration trend and see people in the south moving north. 

Overall, considering all of these factors, I see the great lakes states as holding the most long-term potential. They have a negative recent history, and are very cheap compared to the rest of the US. For a city of its size, Chicago is ridiculously cheap compared to NYC/ LA. 

Additionally, the great lakes states are very insulated from future climate changes and would actually benefit from them. Increases in global temperatures would make winters shorter and less harsh. 

Economically, they are not great currently. But they have excellent infrastructure due to being economic hubs of the past, and current transportation hubs. 

What are your thoughts on the best states for long-term investing potential?