25 Fastest Growing Real Estate Markets in America

In this article we are going to list the 25 fastest growing real estate markets in America. Click to skip ahead and jump to the 5 Fastest Growing Real Estate Markets in America.

The real estate market in America, and even the wider world, is a cornerstone of the performance of the nation and its economy. While it may not seem linked, the performance of the economy often tends to reflect on the real estate market as well. While a few decades ago, owning real estate was a way of life for almost anyone with a job that was even slightly above minimum wage, now it is more or less a dream for even those with a well paying job. We tend to think of the homeless as people with no jobs or work ethics, who laze around and try to live on benefits without actually working to be a productive member of the society. And whether or not that was true decades ago, it certainly cannot be held as the gospel now. After all, while it seems counterintuitive, many of the homeless actually do work part time or full time jobs, with more than 10% of the homeless population in some cities holding jobs. It’s just that the cost of living is so high that despite jobs, these people are even unable to afford rent, let alone purchase real estate. Truly, the American Dream seems dead in the water today.

This is mainly due to the fact that housing prices have risen significantly over the decades, especially in the fastest growing real estate markets in America, while salaries haven’t. And whenever there’s talk of increasing salaries, there is significant opposition as if allowing people to earn a basic living is an offence somehow. The federal minimum wage in the United States is $7.5 an hour. It has been $7.5 since 2009, or 12 years. For 12 years, the minimum wage has been the same but you can see how prices and costs have increased with respect to more or less every single thing you purchase. While the Republicans have been opposing an increase in the minimum wage, and while the Democrats tabled a resolution to increase minimum wage, the resolution failed with even some Democrats opposing the increase. It is part of why the poor stay poor as the rich get richer.

Moving on to the importance of the housing market, did you know it was actually the housing bubble which caused/triggered the Great Recession in 2008? Basically, lenders, without checking the credit worthiness of potential customers, started providing mortgages at extremely low interest rates which would increase exponentially in some years. Of course, since they didn’t check the credit worthiness of the borrowers, once the interest rates increased, people started defaulting on their loans, which led to a high rate of foreclosures and impacted the CDO, credit, mortgage, foreign bank and hedge fund markets, leading to one of the biggest global crashes in history. Housing prices collapsed especially in the fastest growing real estate markets in America. In 2008, the United States had to set aside at least $900 billion in the form of special loans and rescue packages related to this housing bubble, which brought the world’s biggest superpower to its knees, while also seriously impacting the global economy.

When the pandemic hit in 2020, people were unsure about the impact on real estate. Many thought that demand would fall and this would lead to a decrease in the prices of real estate as well; however, the truth was the opposite. Demand actually surged as more and more people began working remotely and could relocate easily as well, which actually led to an increase in the prices of real estate in most areas across the country. Meanwhile, record low mortgage rates also led to people purchasing homes they would otherwise not have considered. And the expectations are quite similar for 2021 as well; according to Forbes “we expect sales to grow 7 percent and prices to rise another 5.7 percent on top of 2020’s already high levels. While we expect mortgage rates to tick up gradually, sales and price growth will be propelled by still strong demand, a recovering economy, and still low mortgage rates. High buyer demand and still-lagging supply will keep prices growing, but at a slower pace than 2020 as buyers contend with mortgage rate and price increases that create affordability challenges.” This shows that while the pandemic has had a significant negative impact on most industries, the real estate market has managed to grow despite, or perhaps, because of the challenges that the pandemic has provided.

Some of the biggest real estate companies in the US include Healthpeak Properties (NYSE: PEAK), Avalon Bay Communities (NYSE: AVB), Public Storage (NYSE: PSA) and Digital Realty Trust (NYSE: DLR) and Boston Properties (NYSE: BXP). Healthpeak Properties (NYSE: PEAK) trade approximately 10% below its January 2020 levels. Avalon Bay Communities (NYSE: AVB) shares also followed a similar path and is currently trading at a 10% discount to its January 2020 levels.  Public Storage (NYSE: PSA) is a different story. PSA shares were quite resilient during the March 2020 crash and actually appreciated by about 25% since the beginning of 2020. Same thing can be said about Digital Realty Trust (NYSE: DLR) shares as well. Digital Realty Trust, Inc. (DLR) shares actually generated positive returns during the March 2020 crash. Out of  these 5 stocks, Healthpeak Properties (NYSE: PEAK), Avalon Bay Communities (NYSE: AVB), Public Storage (NYSE: PSA) and Digital Realty Trust (NYSE: DLR) and Boston Properties (NYSE: BXP), BXP is the cheapest one right now. Boston Properties (NYSE: BXP) shares need to increase close to 30% to reach its January 2020 peak. 

Our favorite real estate stock was actually a different one. We recommended this real estate stock to our monthly premium newsletter subscribers in October 2020 when it was trading at $6.30. This stock returned nearly 90% since our recommendation and currently have about 20% upside potential. Another way of taking advantage of low interest rates and rising inflation is investing in the fastest growing real estate markets around the country.

While the 2008 recession led to a lot of empty homes even as prices dropped significantly, the market has recovered well over the past decade and incredibly, even survived the pandemic. And while the United States has seen an overall improvement in the real estate markets, there are still some cities which outpace the rest. The Urban Land Institute, along with PwC, publishes an annual report on real estate in the US and Canada, which also mentions the fastest growing real estate markets in America. So without further ado, let’s take a look at the markets providing the most potential for real estate, starting with number 25:

25. Columbus, Ohio

The state capital saw real estate prices hit record highs in 2020 due to a shortage of real estate and really low interest rates.

24. Orlando, Florida

Orlanda ranks 24th on our list of the 25 fastest growing real estate markets in the United States. Orlando’s sales in November 2020 were up by at least 20%, while inventory was significantly down because of the high demand.

23. Charleston, South Carolina

While it has been counted among the best cities for renters in the United States, it is also a great market for purchasing real estate.

22. Philadelphia, Pennsylvania

With the median price of a house in Philadelphia being around $200,000, Philadelphia has seen a lot of interest in its real estate market.

21. Indianapolis, Indiana

Indianapolis has started to attract tons of investors and even according to Forbes, is one of the hottest markets in the US for real estate. The main reason behind this is the fact that houses in the city are affordable while expected returns are also quite high.

20. Washington, DC–MD suburbs

Washington DC ranks 20th on our list of the fastest growing real estate markets in America. Clearly bigger government means higher real estate prices around the capital. The suburbs of Washington DC also make our list of the fastest growing real estate markets in America.

19. Boise, Idaho

Boise, the capital of Idaho and its most populous city, has a seriously hot real estate market and the median price of a home in the city jumped around 20.53% over the previous year.

18. Orange County, California

There are plenty of cities from California in our list and is also one of the most expensive cities in our list, with the median price recently jumping to around $973,000.

17. Inland Empire, California

Inland Empire has seen major recovery from the pandemic, which in turn has allowed the real estate market to grow as well. Real estate prices have also increased because of the high demand, especially because of of its open space and being located close to the mountains.

16. Cape Coral / Fort Myers / Naples, Florida

Naples ranks 16th on our list of the fastest growing real estate markets in the US. The median price of a house in Cape Coral is around $200,000 which is one of the best rates you will find in a popular city in the United States.

15. Phoenix, Arizona

One of the fastest growing real estate markets in America, Phoenix has seen booming demand in real estate especially during the pandemic, even though mortgage rates have started to increase.

14. Northern New Jersey, New Jersey

Many people in New Jersey are flocking to the suburbs from the city to avoid being caught up in the pandemic in a crowded area, which means higher demand and a burgeoning real estate market in America.

13. Denver, Colorado

The Denver real estate market has seen an increase in the median price by around 11% to $470,000, which is really expensive. In the third quarter of 2020, the number of homes sold increased  by around 2.4%. This is because of demand outstripping supply as prices continue to increase because of the extremely low interest rates.

12. San Antonio, Texas

San Antonio has one of the cheapest houses in our list, with the median price of a home being $240,000 which is an increase of at least 6.7% year on year. This is despite the fact that it is a buyers market, which means that the number of buyers outstrip the number of sellers.

11. Atlanta, Georgia

Atlanta ranks 11th on our list of the fastest growing real estate markets in America. While Atlanta’s real estate market was hit hard initially by the pandemic, the market eventually recovered and in 2021, it has managed to outpace 2020’s sales even as prices continue to increase.

10. Long Island, New York

In December 2020, Long Island sales jumped massively as closed sales increased by 35%. While the market initially took a hit in spring 2020 because of the pandemic, but the market has rebounded and has seen sales spike.

9. Boston, Massachusetts

Boston is considered to be one of the hottest markets in the country, and earns a spot in our list of the fastest growing real estate markets in America. It has the highest sales over the past 5 years, again driven by the pandemic, with the highest demand being for single-family homes.

8. Washington, DC – Northern VA

The average price of a house in Washington D.C., home to most federal government offices, is around $640,000 which is an increase of 8.5% over the past year, while the number of homes sold increased by 11% over the previous year.

7. Salt Lake City, Utah

Salt Lake City is the most in demand city in the state of Utah, and the real estate market has been driven upwards thank to historically low interest rates because of the pandemic, while unemployment has significantly decreased. While it is considered to just be a part of flyover country by many investors, it is becoming a hot prospect now as the prices keep on increasing.

6. Tampa / St. Petersburg, Florida

Tampa is one of the most famous cities in Florida, and the median price of a house in the city is currently around $300,000. In just the past year, the city has seen double digit growth while prices are expected to rise even further in the next year. The sale to list price ratio is around 99.3% which basically means that most people meet the asking price. Meanwhile, Sunset Park is the most expensive area in Tampa with a median price of around $950,000, while it is also an attractive market for renters.

Click to continue reading and see the 5 fastest growing real estate markets in America.

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Disclosure: None. 25 fastest growing real estate markets in America is originally published at Insider Monkey.