Personally, I'm not bullish on these parts of the country in the next few years. Florida is nearly uninsurable. Tons of development/investment activity going on. Same with Phoenix, and here in Denver.
Sure, there's inbound migration to the cities and states you are referencing, but there's also a glut of supply coming online. And, that inbound migration, I'd bet, is about to slow big time when we look at 2023 data and trends. Texas people have their #Don'tMesswithTexas thing and will beat me up, but it's pretty dang hot, property taxes are extremely high, there's a TON of construction/development bringing on new supply, and frankly the politics are at a point where some residents are leaving, and others may refuse to move there. I wonder if folks are too high on the "business friendly" dynamic in the state, and the net inbound migration in the recent past, and are overweighting those benefits, without really factoring in the risks of investing in parts of that state. Similar concerns in Florida right now. So I'm going to go ahead and #MesswithTexas. I think Texas real estate is among the most likely in the country to underperform from a returns perspective over the next few years. I dislike Tennessee and North Carolina less, but wonder if they won't have more muted risks a step removed from those brewing in Texas and Florida.
Nearly all of the 1.6M units under construction are in the south and west (sunbelt and SE). Huge percentages of that are in Florida and Texas specifically.
Honestly, I like "boring" towns in the Northeast, midwest, and maybe even Southern California for the next few years.
Why SoCal in that list? Because California has been beaten up so badly by mismangement at the governmental level. I'd argue it has the same but opposite political problems as Texas, but that the exodus already happened there and is priced in. It's still the best weather in the country (world?), and eventually, someone will clean up the streets and bring back some sanity. Even if that political miracle doesn't happen, nobody is assuming huge growth in SoCal, like they are in other parts of the country. Furthermore, SoCal, relatively speaking, isn't THAT much more expensive these days than other parts of the country that have shot up in recent years. Even if the prospects aren't great, SoCal doesn't have a the same runup in prices that other places that are, frankly, less desirable, did over the past few years.
All that to defend a minor point on SoCal - I'm probably still preferring the midwest and Northeast to SoCal. But, just know that some people will think I'm crazy for even typing out the idea that SoCal might be an OK investment in 2023. I personally don't think it's crazy, and would rather be there than in Austin, TX right now.
Not a lot of new supply, relatively speaking in the NE, Midwest, and SoCal. Not a lot of migration, and many of these places didn't boom like the rest of the country over the last few years.
Millennials, I bet, are going to be moving back to where they grew up to settle down and raise families. I bet these places are lower risk and higher upside than other parts of the country.
