Lessons from the Pros

Real Estate

Ten Top Metro Areas to Buy Real Estate

I was on Power Trading Radio a couple of weeks ago and had a great conversation with my friend Merlin. We started talking about how to identify emerging markets to buy real estate.  I realized I’d yet to write my yearly article identifying some of those top markets.

I’ve seen several lists, one created by www.realtor.com, which is comprised of data from 146 Metropolitan Areas and Metropolitan Divisions.  Realtor.com also used data from the Case-Shiller Home Index and unemployment rates from the Bureau of Labor Statistics.

I also found a list created by InmanNews which I thought was interesting and worth sharing.  I felt this list was ahead of the curve.  The special report created by InmanNews examined housing, economic and demographic data for all Metropolitan Areas.

The things similar in the top ten markets are: strength in average appreciation, a good job market and rate of sales as it relates to the population, affordability, low foreclosure activity and low vacancy rates.

Number 1 – Raleigh-Cary, North Carolina

  • Average median sales price was $224,300
  • Foreclosure Activity – 1 in 1,295 units (national average 1 in 126)
  • Unemployment rate – 7.8%
  • Walk Score (a method we look at in class) – 40

Raleigh-Cary affordability rate is higher than the national average, with 73.6 percent of its homes affordable to households earning the area’s median income.

Number 2 – Wichita, Kanas

  • Average median sales price – $120,900
  • Foreclosure activity – 1 in 958 units
  • Unemployment rate – 7.1%
  • Walk Score – 41

Wichita has many diverse industries, even though they are known for being the “Air Capital of the World.”  Companies that call Wichita home are: Spirit AerioSystems Inc., Hawker Beechcraft, Bombardier Aerospace Learjet Inc., Cessna Aircraft Co., Via Christi Health, Koch Industries, Cargill Meat Solutions and Wichita State University to name a few

Number 3 –  Rochester, New York

  • Average median sales price – $123,400
  • Foreclosure activity – 1 in 4,001 units
  • Unemployment rate – 6.9%
  • Walk Score – 63

Eastman Kodak has long been associated with Rochester. The area has done a great job of no longer depending on just Kodak which has proven to be forward thinking.

Number 4 – Des Moines-West Des Moines, Iowa

  • Average median sales price – $157,900
  • Foreclosure activity – 1 in 863 units
  • Unemployment rate – 5.3%
  • Walk Score 48

Brian Wentz with Burnett Realty in Olive Iowa put it this way – “Strong Midwestern values, a highly educated and productive workforce and the culmination of many years of cooperation between civic, corporate and government make the greater Des Moines area …an oasis of prosperity.”

Number 5 – Chattanooga, Tennessee

  • Average median sales price – $128,700
  • Foreclosure activity -1 in 973 units
  • Unemployment rate – 7.5%
  • Walk Score – 37

Affordability is a very high 81.3 percent for the median-income household.  It also has the highest rate of out-of-state immigration among the 10 markets.

Number 6 – Peoria, Illinois

  • Average median sales price – $132,600
  • Foreclosure activity – 1 in 23,468 units
  • Unemployment rate – 7.9%
  • Walk Score 47

Peoria has the highest appreciation rate among the 10 markets and the seventh-highest among 150 metro areas nationwide.

Number 7 – Amarillo, Texas

  • Average median sales price – $131,000
  • Foreclosure activity – 1 in 1,890 units
  • Unemployment rate – 5.1%
  • Walk Score – 44

Amarillo had the second-lowest unemployment rate of the 10 markets. It also saw the biggest rise in median household income between 2009 and 2010, at 7 percent.

Number 8 – Binghamton, New York

  • Average median sales price – $120,500
  • Foreclosure activity – 1 in 4,268 units
  • Unemployment rate 7.7%
  • Walk Score – 61

The highest affordability is found in Binghamton where it is 87.7 percent to median-income.  The area’s median household income rose 3.8 percent year-over-year in 2010.

Number 9 – Waterloo-Cedar Falls, Iowa

  • Average median sales price – $118,100
  • Foreclosure activity – 1 in 1,014 units
  • Unemployment rate 5%
  • Walk Score – 42

Waterloo-Cedar Falls had the highest rate of sales per population among the 10 markets; there was 1 sale for every 46 people, compared to 1 sale for every 83 nationally.

Number 10 – Bloomington-Normal, Illinois

  • Average median sales price – $161,800
  • Foreclosure activity – 1 in 1,376
  • Unemployment rate 6.8%
  • Walk Score – 46

Bloomington-Normal has seen above-average price appreciation, a strong local economy and above-average population growth. Get started with real estate investment training here.

Great Fortune

Diana D. Hill – dhill@tradingacademy.com

DISCLAIMER This newsletter is written for educational purposes only. By no means do any of its contents recommend, advocate or urge the buying, selling or holding of any financial instrument whatsoever. Trading and Investing involves high levels of risk. The author expresses personal opinions and will not assume any responsibility whatsoever for the actions of the reader. The author may or may not have positions in Financial Instruments discussed in this newsletter. Future results can be dramatically different from the opinions expressed herein. Past performance does not guarantee future results. Reprints allowed for private reading only, for all else, please obtain permission.

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