MARKETS & TRENDS
Small Packages LESSER-KNOWN MARKETS CAN PROVIDE HIDDEN GEMS WORTH THE INVESTMENT.
by Ingo Winzer
he 2008 recession was felt most sharply in small- er markets across the country as unemploy- ment soared and home prices plunged. Many of these markets have still not recovered, but that doesn't mean they aren't good places to invest in real estate. A major advantage for investors is that the downside risk in a good many of these smaller markets is now minus- cule. Even better, in some of them demand for housing has picked up, as you can see by the recent rise in home prices. We're showing a dozen markets with population un- der 300,000 where the current risk of investing is LOW and where the upside is very good. These aren't household names for most people, you'll have to get a map to find most of them (I did too). The ratio of prices to rents is good in all of them; you'll be able to directly rent out a single-family home. And pur- T
chase prices are generally low. Take precautions: drive a hard bargain, get all the return you need from the rental income (not from equity apprecia- tion), stay away from the lower end of the investment price range, and take time to find a favorable location. But take a good look at these markets, because the risks are low, the returns are good, and you won't find much competition (yet). •
Ingo Winzer is president of Local Market Monitor, which analyzes conditions in 300 U.S. markets, using such economic data as home values and growth in employment and population. Winzer, who has analyzed real estate markets for more than 20 years, was a founder and executive vice president of First Research, an industry research
company that was acquired by Dun & Bradstreet in March 2007. He is a graduate of MIT and holds an MBA in finance from Boston University. Winzer resides in Cambridge, Mass.
78 | think realty magazine :: february 2020
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