MARKET BREAKDOWN
HOT MARKETS 2018
Think Realty’s Hot Markets for Real Estate Investors in 2018 THE TOP MARKETS RIPE WITH OPPORTUNITY FOR INVESTORS IN THE COMING YEAR.
by Carole VanSickle Ellis
E very year, real estate analysts, experts, and economists release assorted “top hot markets” lists related to housing. These lists should always be taken with a healthy dose of context. As Svenja Gudell, chief economist at Zillow and this month’s Think Realty cover story feature says, “Economists, like meteo- rologists, should be taken with a grain of salt.” The truth of the matter is this: We can forecast the future, but we cannot predict it with certainty. Furthermore, when it comes to hot markets in real estate, most of these lists do not actually cater to the active real estate investor but rather one of two populations: owner-occupants and renter-occupants, or water-cooler analysts and newshounds. Thus, these lists are generally highly entertain- ing but generally irrelevant in and of themselves to a truly active, invested portfolio builder. To fill the gap, Think Realty Magazine has compiled a list of hot markets for real estate investors in 2018. These markets share a number of attributes, which we’ll itemize below, but you will notice that they run the gamut in terms of size, home values, and demographics. What they do have in common is that we believe they are well-positioned to not only support ac- tive real estate investors engaged in deliberate, knowledgeable investment strategies, but also to offer a low enough barrier to entry to relatively new investors that the market is not exclu- sionary of new and beginning investors.
To that end, our five hot markets offer a compelling combi- nation of the following attributes: • Solid commuter suburbs • Growing populations or population segments according to reliable data sources, including but not limited to the U.S. Bureau of Labor Statistics (BLS) and the Census Bureau
1 SALT LAKE CITY, UTAH
• Ranked number three on the top city list from Pricewater- houseCoopers and the Urban Land Institute • Provo ranks 7th on TechNet’s 2018 emerging tech hubs list • Ranked 14th on Forbes’ 2017 Best Places for Business and Careers list CONCLUSION Salt Lake City has a relatively small population, access to an international airport, well-developed public transit, and sits in the crossroads of major highways, making it well-posi- tioned to grow and support a growing suburban population. Tight inventory and rising rents could make market entry with a fix-and-flip or wholesaling strategy challenging, but building a single-family or multifamily rental portfolio is an affordable, and likely profitable, cash-flowing option.
CSA: Salt Lake City-Ogden-Provo, UT CSA Population: 2.5 million (2010 Census) Unemployment: 3.0% (BLS, October 2017)
• Solid jobs ecosystems not reliant on a single industry
• Multiple options for investor entry into the market or a prime opportunity for a specific, credible strategy
NOTABLE FACTS
• Relatively strong housing affordability based on cost of living, median income in the area, and median income of any incoming buying population • Proximity to a major metro area or inclusion in a metro- politan combined statistical area (CSA) Note: Not all markets on our list meet all criteria, but they do meet a compelling number of these requisites.
• Utah is one of only four states to experience double-digit job growth since the Great Recession • Salt Lake City’s cost of living is two percent lower than the national average • The city’s nickname, “Silicon Slopes,” indicates the burgeon- ing tech industry and existing tourist/hospitality industry, a combination that makes the market extremely attractive
48 | think realty magazine :: january 2018
thinkrealty . com | 49
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