In a nutshell, homeowners, real estate investors, property managers, and landlords earn money from real estate properties through appreciation, rental income, and other real estate-based business activities. Because of this, investing in real estate provides passive income, tax advantages, and stable cash flow. You can even invest in real estate without the need to purchase properties through real estate investment trusts (REITs).
Because of the benefits that real estate investment provides, it remains one of the best ways to diversify one’s financial portfolio. Real estate companies like Donovan Home Sales can help you find the right property to invest in. If you’re aiming to diversify your portfolio for 2022, you’ve just made a wise decision. You can invest in real estate property. Fortunately, experts have weighed on the best cities in the US for housing markets in the coming new year.
What the Experts are Saying
According to the Emerging Trends in Real Estate 2022, a PwC and Urban Land Institute report about the real estate industry for 2022, people are continuously moving to smaller metro areas, making these places ripe for investment. Top real estate markets were concentrated in large cities in the past, but not anymore.
In fact, the PwC report revealed that former top performers such as Washington and Los Angeles didn’t even make it to the top 10 of their list. The fastest-growing real estate markets are focused on the southern and western regions of the country.
On the other hand, the Top Housing Markets for 2022, Realtor’s housing forecast and economic review for 2022, reported that the Mountain West and Midwest regions are the most desirable markets for the coming year.
The Realtor forecast observed that the places that made it to their list were tech hubs with low unemployment but are offering significant job growth and strong local economies. They recommended investing in the region to avoid competition and rising prices early on.
Both PwC and Realtor reports, however, have something in common. The places that made it to their forecasts have become more attractive because of the remote work movement. Many workers have realized that they can do their jobs from anywhere, eliminating the need to work close to their offices. In fact, according to the PwC report, 42% of workers disagree with returning to work the way they did before the pandemic.
The Hottest Housing Markets for the Upcoming Year
While the Realtor report didn’t mention investor input, PwC factored in several reasons that shape investment decisions. Natural disasters that hit several states in 2021 were a game-changer for investors. Drought, record heat, and disastrous wildfires in the Western region, plus the massive floods in Louisiana and New York, are elements that investors now increasingly consider. In fact, 82% of investors consider environmental and social governance (ESG) elements in their decisions.
With ESG in mind, the cities of Nashville, Austin, Boston, and North Carolina cities such as Raleigh, Charlotte, and Durham, were the top choices based on investor demand, according to PwC. Overall demand, however, included these top five cities based on the combination of both PwC and Realtor reports.
1. Salt Lake City, Utah
Salt Lake City is an emerging tech hub in the Mountain West region of the country, earning it the nickname “Silicon Slopes.” The city expects a sales growth of 15.2% and a price growth of 8.5%. The median price of a home in the city is not higher than $560,000.
2. Boise City, Idaho
Boise City also has a tech hub to be proud of, attracting young employees and families. The median home price in the city is $500,000, encouraging retirees from the West Coast to relocate to the area.
By 2022, Boise City expects a sales growth of 12.9% and a price growth of 7.9%.
3. Columbus, Ohio
The midwestern city is popular with millennials because of its small-town vibe and big-city amenities. The city expects a sales growth of 13.7% and a price growth of 6.3%. The median price of a home in the city is just below $300,000.
4. Spokane Valley, Washington
Spokane is another alternative and affordable city for retirees, young employees, and even students compared to nearby costly areas such as Seattle and San Francisco. The median price of a home is not higher than $420,000.
Of all the large cities in the US, Seattle is the only one that made it to both Realtor and PwC reports. It’s becoming a hot market for people, especially from California’s expensive cities. The city expects a sales growth of 9.6% and a price growth of 7.5%. The median home price doesn’t go beyond $670,000.
Invest in Real Estate Property in 2022
Strong housing demand, remote work, affordability, and urban living in a small city setting, will likely drive home sales for 2022. Fortunately, PwC and Realtor made an effort to provide reports of the best cities in which to live and invest. If you want to take advantage of the affordable prices in these emerging real estate markets, you should start investing today.