BYTHE NUMBERS
LOCAL MARKET MONITOR
Playing it Safe THESE 10 MARKETS MAY NOT BE ‘FLASHY,’ BUT EACH HAS A BALANCED ECONOMY WITH STEADY GROWTH.
purchasing at least 10 properties in a calendar year) account for less than 3 percent of all single-family purchases so far in 2016 and where the potential gross annual rental yields for properties purchased in 2016 is at least 10 percent. The five most-populous counties making the list were Phil- adelphia County, Pennsylvania (10.1 percent potential gross
17 Single Family Rental Millennial Meccas
Prince George's County Maryland 25.6%
Philadelphia Pennsylvania 28.7%
Richland South Carolina 30.1%
Onslow North Carolina 37.6%
Duval Florida 25.2%
Saint Louis City Missouri 29.3%
Ector Texas 26.4%
Oklahoma Oklahoma 25.2%
28 Best Low Competition SFR Markets
Pct Institutional InvestorPurchasesJan-July2016
Baltimore City Maryland 28.1%
Bell Texas 30.1%
0.9%
3.6%
by Ingo Winzer
El Paso Texas 25.8%
Woodbury Iowa 2.4%
Yuma Arizona 2.5%
Muscogee Georgia 27.7%
t some point—and very early signs suggest it will be sooner rather than later—the economy will slow down. When that happens, the value of an investment A
growth during this expansion. When the national economy suffers, every local market suffers. But these 10 markets have a good chance of getting mild symptoms only. •
vestment might have an expiration date in the next five years, you can minimize your risk by investing in markets where the local economy will be least affected. Our Top 10 markets can be considered “safer” because they don’t have concentrations of high tech, finance or manu- facturing jobs. They’ve had good but not spec- tacular growth, and they don’t have very high or very low average income. Instead, they have a balanced economy with steady
Carroll Georgia 25.4%
Escambia Florida 25.7%
Philadelphia Pennsylvania 3.6%
Monroe Michigan 1.8%
Ocean New Jersey 0.9%
Oneida NewYork 2.1%
Milwaukee Wisconsin 26.3%
Westmoreland Pennsylvania 2.2%
Orange NewYork 2.2%
Kendall Illinois 2.3%
Gloucester New Jersey 1.9%
Sullivan Tennessee 2.7%
Kent Michigan 1.3%
Richmond Georgia 27.0%
in single-family rent- al property could be affected in two ways. The sales price of the
Richmond City Virginia 33.1%
Millennial (20-34) Pct. of Population
DeKalb Illinois 1.6%
Wicomico Maryland 2.6%
IngoWinzer 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
Kenton Kentucky 2.3%
25.2%
37.6%
Alamance NorthCarolina 2.9%
Atlantic New Jersey 1.3%
SaintClair Michigan 2.1%
Sussex New Jersey 2.4%
Citrus Florida 2.1%
Lackawanna Pennsylvania 2.5%
Camden New Jersey 1.7%
RichmondCity Virginia 1.3%
property could go down, and there could be fewer people willing to pay the rent you want. Long-term investors are willing to go through slow periods, but if your in-
We only included counties where Millennials—those born between 1981 and 1997 — accounted for at least 25 percent of the population in 2014 and where the Millennial population grew from 2013 to 2014. Lastly, all counties on the list have a potential gross annual rental yield of at least 10 percent for properties purchased in 2016. The five most populous counties making the Millennial mecca list were Philadelphia County, Pennsylvania (10.1 per- cent gross annual rental yield); Milwaukee County, Wisconsin (13.1 percent); Prince George’s County, Maryland, in the Washington, D.C., metro area (10.1 percent); Duval County, Florida, in the Jacksonville metro area (11.2 percent); and El Paso County, Texas (11 percent). Counties on the list with the highest share of Millennials were Onslow County, North Carolina, in the Jacksonville metro area (37.6 percent of population millennials in 2014); Richmond City, Virginia (33.1 percent); Bell County, Texas, in the Killeen-Temple metro area (30.1 percent); Richland County, South Carolina, in the Columbia metro area (30.1 percent); and St. Louis City, Missouri (29.3 percent). HIDDEN GEMS And finally, we identified high-yield single-family rent- al markets that are hidden gems, undiscovered by the big institutional investors who have dominated some markets, pushing up prices and compressing yields in those markets. We narrowed the list down to 28 hidden gems by including only counties where institutional investors (those entities
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 Univer- sity. Winzer resides in Cambridge, Mass.
Miami Ohio 2.8%
Ulster NewYork 1.5%
Lexington SouthCarolina 2.8%
Macomb Michigan 2.5%
Volusia Florida 2.2%
www.localmarketmonitor.com
annual yield); Macomb County, Michigan, in the Detroit metro area (11.4 percent); Kent County, Michigan, in the Grand Rapids metro area (10.1 percent); Ocean County, New Jersey (10.4 percent); and Camden County, New Jersey, in the Philadelphia metro area (11.8 percent). Counties making the list with the lowest share of institu- tional investor purchases were Ocean County, New Jersey (0.9 percent); Kent County, Michigan, in the Grand Rapids metro area (1.3 percent); Atlantic County, New Jersey, in the Atlan- tic City metro area (1.3 percent); Richmond City, Virginia (1.3 percent); and Ulster County, New York, in the Kingston metro area (1.5 percent). •
3-YEAR POPULATION GROWTH (%)
LATEST JOB GROWTH (%)
2014 POPULATION
AVG. HOME PRICE (000)
AVG. MONTHLY RENT
3-YEAR PRICE FORECAST (%)
LOCAL MARKET MONITOR
712,220
$315
7
$1,119
3.9
27
Charleston, SC
819,743
$273
4
$1,194
3.7
31
Tacoma, WA
1,883,051
$305
9
$1,232
3.7
30
Austin, TX
1,245,764
$234
3
$1,133
3.4
20
Richmond, VA
1,757,912
$249
6
$1,016
3.1
27
Nashville, TN
2,314,554
$321
4
$1,071
3.1
33
Portland, OR
1,953,961
$184
3
$927
3.0
15
Indianapolis, IN
2,277,550
$210
6
$1,011
2.9
17
San Antonio, TX
Daren Blomquist is senior vice president of ATTOM Data Solutions, parent company of RealtyTrac. RealtyTrac is a leading supplier of U.S. real estate data, with nationwide parcel-level records for more than 129 million U.S. parcels that include property characteristics, tax assessor data, sales and mortgage deed records, AutomatedValuation Models (AVMs) and 20 million active and historical default, foreclosure auction and bank-owned properties. www.RealtyTrac.com
3,459,146
$237
3
$1,042
2.8
19
Minneapolis-St. Paul, MN
852,715
$189
2
$871
2.6
15
Knoxville, TN
Source :: Local Market Monitor
90 | think realty magazine january :: february 2017
thinkrealty . com / mag | 91
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