2020 has been a hectic year that has drastically changed societies and economies throughout the world. However, this upheaval has also created many unforeseen opportunities in many different areas, real estate being one of them. Real estate of course is all about location, but the most profitable ones, in particular, are often more difficult to determine.
This is because many different factors go into how attractive an area is for real estate investment, ranging from everything to state median household income and median home price, as compared to the national average, to migration and weather. Based on economic trends, the top ten states ideal for real estate investment in 2020 are Texas, North Carolina, Tennessee, North Carolina, Massachusetts, Texas, Florida, Georgia, California, and Washington.
Based on this information on emerging trends in real estate, five categories of markets for real estate investment can be projected to be profitable, as can seven factors that make states good for real estate investment.
Real Estate Categories
The first real estate market category is that of the major capital magnets, which account for over 17% of total relevant transactions over the past three years or so. States that fall into this category include New York, Illinois, California, New Jersey, Texas, Arizona, and Florida.
The second category is determined competitors, which are housing markets that maintain consistent records of inflows of capital as well as solid volumes of annual transactions. States that fall into this category include Pennsylvania, New York, Connecticut, Minnesota, California, Kansas, Nevada, and Maryland, and Michigan.
The third category is areas that are ripe for discovery, which are markets that have populations of at least one million as well as double-digit population growth. States that fall into this category include Florida, Utah, Ohio, Kentucky, Pennsylvania, South Carolina, Oklahoma, Idaho, Iowa, Washington, and New Jersey. The fourth category is markets that meet expectations, which are those that offer the best matches between investment flows and prospects. States that fall into this category include Florida, Virginia, Alabama, Hawaii, Ohio, New Mexico, Nebraska, Arizona, Texas, and New York.
The fifth and final category is thrifty choices, which are the often overlooked markets that fly under the radar, narrowly escaping detection with lesser rankings and a few shortcomings but having particular opportunities and investment potential in the long term. States that fall into this category include Missouri, Tennessee, Louisiana, Rhode Island, Connecticut, Virginia, Wisconsin, and Maine.
If none of these locations are available for you, try Googling, “selling a home Lehigh, PA” for your local area.
Real Estate Investment Incentives
The first factor that helps make real estate markets suitable for investment in job creation that exceeds that of the national average. The second factor is the current as well as the projected population growth that both exceed the national average. The third factor is that of pulled building permits, current levels of construction, and projected real estate development growth. The fourth factor is that of governmental planning on the state as well as local levels, with considerations as to whether a prospective municipality favors growth or stifling regulations and red tape.
The fifth factor is that of the relative affordability of housing as determined with the price-to-rent ratio in order to compare median rents to median home prices. The sixth factor is that of the rate of absorption, which is the time necessary for new housing brought to the market to be rented or purchased. The seventh and final factor is that of the rate of the vacancy rate, which compares the target market average to the market’s overall average rate of vacancy.
While 2020 has brought many unforeseen trials and tribulations, there is no reason why one cannot capitalize on some of the unforeseen hidden blessings they have brought to the forefront. The information provided hopefully sheds some light upon the issue of this year’s top markets and cities to invest in with respect to real estate so that investors can make informed choices.