Five Real Estate Markets to Watch in 2019
Job growth and attractive cost of living dimensions in Southern states create opportunities for rental property investors in 2019
Each year, the Urban Land Institute (with PWC) publishes a report outlining key real estate trends in North America. The Emerging Trends in Real Estate® report is a leading report in the industry and covers key real estate trends, capital markets analysis, market dynamics, and other issues related to the sector. You can read the full report here.
As we kickoff 2019, there has been much talk about a slowdown in the United States real estate market. However, it is clear from this report and our own research at Darwin Homes that there are opportunities to invest in the Southern submarkets, where favorable job growth is coupled with a lower cost of living. When these factors are combined with attractive price-to-rent ratios, we believe this creates a compelling investment opportunity.
Here is a list of markets to watch in 2019:
- Dallas, TX: The latest report from the U.S. Census Bureau shows that the Dallas-Fort Worth-Arlington metropolitan area has experienced the biggest population growth in the United States over the last year. The main driver of this population growth is the low cost of living in the city. Interestingly, a significantly high percentage of the population is in the 0–24 and 25–44 age cohorts looking for rental properties, which bodes well for rental property investors looking to add to their portfolio.
Median Property Price: $296,726
Traditional Rental Income: $1,570
Price-to-Rent Ratio: 15.75
- Orlando, FL: This tourist destination has set record-level visitor numbers for the past several years as the economy continues to improve. Many Orando-area jobs are created by the hospitality sector tied to Disney and other large entertainment operators. These low-skill workforce positions often preclude homeownership, supporting local rental demand.
Median Property Price: $323,826
Traditional Rental Income: $1,588
Price-to-Rent Ratio: 17
- Austin, TX: The Texas capital is one of the fastest-growing metros in the nation and maintains a strong and growing base of tech firms that attract young workers with higher disposable incomes. In addition to demand created by the University of Texas, Apple’s new campus is based in Austin and will employ thousands of millennials and Gen X residents.
Median Property Price: $518,686
Traditional Rental Income: $1,842
Price-to-Rent Ratio: 23.46
- Raleigh / Durham, N.C.: Home to the Research Triangle and three major universities, demand is anticipated to remain strong. The Research Triangle is a high-tech research park that hosts 200 companies and 60,000 workers. Nearby universities that provide these firms an educated pipeline of workers include Duke University, The University of North Carolina at Chapel Hill, and North Carolina State University.
Median Property Price: $433,433
Traditional Rental Income: $1,553
Price-to-Rent Ratio: 25
- Nashville, TN: Nashville claims the title of having the lowest unemployment rate of any metropolitan area with more than a million residents. Given its strong job market, more people are relocating to live permanently in Nashville for work and the job opportunities the city has to offer.
Median Property Price: $413,592
Traditional Rental Income: $1,753
Price-to-Rent Ratio: 19.66