Why some cities, like Austin and Raleigh, look like great buys right now.
Home buyers and sellers can take heart: Companies of all stripes are investing in real estate again. While the actions of big Wall Street funds and global corporations might seem to matter little to families choosing cities and towns in which to live, consumers can learn a lot by following which investing markets heavy hitters are focusing on--and which ones they're avoiding.
The housing health of a city is affected by a lot of factors including the jobs picture and the rate of vacancies and foreclosures. But some cities where home prices have been battered look like great buys for investors, a good sign that in spite of deep declines, they might turn around dramatically.Two years ago the idea of putting money behind real estate ventures seemed too risky for even the most reckless of capitalists. But investor skittishness about the real estate market is slipping away, and speculators are seeing value in distressed markets.
But in a housing market this volatile, it can be hard to tell when low sales prices on property indicate a market that has bottomed or one with little hope of a turnaround any time soon. We asked Cary, N.C.-based Local Market Monitor (LMM), a real estate research firm, to identify the markets that were the best bet for residential real estate investing.
Raleigh, N.C.; McAllen, Texas; and Austin led the list. These cities didn't see the same dramatic run-ups in prices as many Sand State cities did between 2001 and 2006. As a result, they were spared a corresponding bust. They are also buoyed by a mix of jobs that's weighted toward growth industries like government and education.
"Markets with a high percentage of jobs in those categories tend to be more or less stable markets," says LMM president Ingo Wizner. "Then there are the categories you want to stay away from, like construction and finance."
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