Lessons from the Pros

Exploring the 10 Top Metro Areas to Buy Real Estate in the Next Few Years, Part I

Last week, when we looked at the real estate forecast, I listed the markets that experts think will have the most growth between now and 2014. This week, we’ll explore the first five of those markets in more detail.

Here are the top five metro areas:

1. Washington – Bremerton-Silverdale metro area

Prices Forecast to increase: 44.7 percent
Population: 240,860
Median Price Home: $245,000
Median Family Income: $69,900

According to Fiserv, their forecast is for prices to increase 44.7 percent. Why the big increase? Well, this is a waterfront community that has benefited from increases in government employment. This has sustained the job market and has attracted buyers. It also gives buyers the opportunity to be close to Seattle at a lower cost of living. Other attractive markets in the state of Washington include Tacoma, which is the state’s second strongest market with an expected growth rate of 33.1 percent. Seattle is also expected to see growth of 25.5 percent.

2. Oregon – Bend metro area

Prices Forecast to increase:33.6 percent
Population: 158,630
Median Price Home: $144,533
Median Family Income: $58,200

Prices in this area have fallen almost 40 percent since the peak in late 2006. This area offers homebuyers and visitors a wealth of outdoor recreational opportunities. The area still has issues with higher than average unemployment which was reported at 13.4 percent in June. Moody’s and Fiserv expect a fast recovery starting next year. Agents in the area already report that buyers are getting good deals and that homes priced in the low hundred-thousand-dollar range are being "snapped up at a furious pace."

3. Michigan – Detroit-Livonia-Dearborn metro area

Prices Forecast to increase:33.1 percent
Population: 1.92 Million
Median Price Home: $51,000
Median Family Income: $54,400

Ok, this one is a surprise to me. Unemployment is still high, 14.3 percent, but it is coming down, and they are creating opportunities for new industries such as solar energy and film production. Prices have fallen in the Detroit area more than 60 percent since 2006, according to Fiserv and Case-Shiller Indexes. What is really attracting interest to the area? International investors coming from the U.K., Dubai, Russia, India, Ireland and France.

4. California – Napa metro area

Prices Forecast to increase: 31.7 percent
Population: 134,650
Median Price Home: $355,000
Median Family Income: $79,600

The Napa area saw prices drop over 44 percent since the peak in early 2006. Prices in this area already experienced a small rebound and will continue to rebound quickly. What makes this area attractive for growth? Its natural resources, agricultural resources and well managed growth. Its unemployment rate has also dropped to 9.5 percent, 3 percent lower than the state average.

5. Nevada – Carson City metro area

Prices Forecast to increase: 31.6 percent
Population: 55,180
Median Price Home: $141,524
Median Family Income: $63,100

Carson City prices fell 34.4 percent from the peak levels of 2006. Carson City has a large senior population that is in need of housing and services. Once again, recovery will depend on job creation. As the capital of Nevada, there are opportunities for government job growth.

Investing in real estate out of your local area can be very profitable, but doing your due diligence and committing the resources to the project are important. In the Professional Real Estate Investor Class, we cover the best websites I’ve found for doing research on many aspects of local real estate markets. The websites are a way to start your research on an area, but nothing beats a visit to the area you’re considering investing in.

Next week, I’ll explore, in more detail, the next five markets and what they have to offer investors.

• Florida – Panama City-Lynn Haven metro area
• Arizona – Flagstaff metro area
• New Mexico – Santa Fe metro area
• Wyoming – Cheyenne metro area
• Alaska – Anchorage metro area

Great Fortune,

- Diana Hill dhill@tradingacademy.com