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So You're Looking to Invest in
Real Estate?
Maybe you were not the
best in math, and loathed equations. We have, for your examination, a not
so difficult equation (much easier than E=MC2)that
allows you to put some logic into what markets are likely to appreciate
and why.
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12
Months Total Employment Growth/Total Permits |
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The Market’s Total
Employment/Total Housing Units
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The markets expected
to be the best investments over the next five years (based on projected
employment, population and households growing more quickly than housing
supply) are Los Angeles – where demand will be the greatest, exceeding
supply by 81 percent – followed by Salt Lake City and Austin, Texas.
According to the
Meyers Group, an Irvine, Calif.-based housing research firm, 80,000 jobs
were created in Los Angeles County last year, but only 12,000 housing
units (single- and multi-family) were built.
Conversely, some of
today’s hottest home building markets may not be the best place to invest.
“Some of the metropolitan areas with significant building activity are not
necessarily the best places for investment,” said John C. Burns, senior
managing director at The Meyers Group. “Phoenix and Las Vegas are both in
the top 10 in number of permits issued, but are in the bottom third with
respect to investment outlook.”
In general, look for
areas with the highest imbalance between jobs and housing.
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Best Housing Markets (for Investment) Over the Next Five Years
source:
The Meyers Group
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METRO MARKET |
HOUSING DEMAND WILL
EXCEED SUPPLY BY:
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1
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Los Angeles, Calif.
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81% |
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2
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Salt Lake City,
Utah
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48%
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3
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Austin, Texas
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40%
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4
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Tampa, Fla.
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38%
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5
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San Diego, Calif.
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36%
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6
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Orange Co., Calif.
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31%
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7
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Dallas, Texas
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26%
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8
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Kansas City, Mo. &
Kan.
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26%
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9
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San Antonio, Texas
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24%
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10
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Washington, D.C.
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21%
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