BYTHE NUMBERS
BYTHE NUMBERS
MARKET INDICATORS
LOCAL MARKET MONITOR
Top 10 Real Estate Markets for Business & Healthcare HEALTHCARE AND BUSINESS SERVICES CREATE STRONG JOBS MARKETS AND SOLID HOUSING.
by Ingo Winzer
espite political wrangling, health- care will be a growing portion
because housing construction hasn’t kept pace with demand. In Silver Spring, Denver and Boston, apartment buildings or single-family homes converted to multiple units are the best option, while in the others single-fam- ily homes can be rented out directly. •
well as some relatively lower-paying ones, such as the janitorial staff positions involved in maintaining these facilities. Mainly though they produce a lot of jobs in the middle, and jobs for younger people who tend to be renters. This Top 10 list shows markets where healthcare and business services already provide a large portion of local jobs and where healthcare jobs have been increasing at a good clip. In these markets, investments in rental properties should have a long run
4 Positive Market Characteristics that MakeAnyMarket Better EVERY MARKET IS UNIQUE, BUT CERTAIN ASPECTS ARE A BONUS.
of the U.S. economy as Americans get sicker and older and as science spits out new drugs
and treatment options. A growing local health- care industry not only provides jobs directly, but also through the
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 employ- ment and population. Winzer, who has
many associated business services it needs in order to function. Healthcare and business services
by John Trautman
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. www.localmarketmonitor.com
A
lthough every real estate market is unique and holds its own particular set of opportunities, there are four posi- tive market characteristics that make any market in which they occur a little bit brighter. Can you have a good real estate market without all four of these characteristics? Absolutely! But if a market does have even one or two of them, it’s a good sign for an investor that there may be some good potential awaiting. LOWCOST OF LIVING The cost of living index measures the cost of goods and services needed for living, such as groceries, clothing, utilities, housing, transportation, health care, building materials, and eating out. For example, Phoenix, Arizona, has a low cost of living, especially given that it is such a big city. The cost of living in Phoenix is 34.6 percent lower than in Seattle, Washington, for a comparison. A person making $50,000 a year in Seattle would only have to make $32,692 in Phoenix to maintain their current standard of living. TAKEAWAY Low cost of living gives potential renters more disposable income, allowing you to create a positive cash flow on investment properties.
their money and more households can potentially own their own homes. This makes a market attractive to both buyers and renters, since most Americans still want to eventually purchase their own property. It also makes a market attractive to landlords and turn- key investors, who can build out portfolios of multiple properties much faster than they might in an area with high real estate costs. TAKEAWAY When you can purchase below market or simply at a relatively lower cost, you more easily create a cash flow that allows you to produce income from your real estate investments. LOWPROPERTY TAXES When you think about cash flow, you have to include all of the costs associated with owning property. Taxes can be a big chunk of the cost. Make sure you consider property taxes and other associated assessments and fees that may come with a property before you invest.
both include some high-paying jobs such as doctor, lawyers, and financial advisors, as
HEALTHCARE & BUSINESS SERVICES JOBS
3-YEAR POPULATION GROWTH
2017 POPULATION
HEALTHCARE JOB GROWTH
TOTAL JOB GROWTH (%)
HOME PRICE/ RENT RATIO
LOCAL MARKET MONITOR
3,524,583
-32%
-7%
3%
2.8%
20
Minneapolis-St. Paul, MN
768,918
-32%
-6%
6%
4.6%
21
North Port-Bradenton, FL
676,909
-31%
-6%
6%
4.3%
21
Boise City, ID
1,422,789
-34%
-6%
5%
2.9%
21
West Palm Beach, FL
526,295
-33%
-6%
3%
2.4%
19
Portland, ME
1,984,537
-40%
-5%
3%
2.4%
23
Boston, MA
1,273,568
-31%
-5%
7%
3.0%
21
Raleigh, NC
1,285,438
-37%
-5%
2%
2.2%
28
Silver Spring-Frederick, MD
> Continued on :: PG 113
2,814,330
-31%
-4%
6%
2.1%
27
Denver, CO
John Trautman is an active real estate agent and investor in the Phoenix area. He may be reached at john@realestateki.com.
1,038,583
-35%
-4%
3%
2.4%
16
Grand Rapids, MI
LOWCOST OF REAL ESTATE Lower real estate costs mean buyers can get more house for
Source :: Local Market Monitor
110 | think realty magazine :: december 2017
thinkrealty . com | 111
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