According to the renowned on annual U.S real estate, the most promising housing markets of 2020 include surprising cities like Miami, Atlanta, and Austin. One of the biggest trends in 2019 was the housing crisis in California and the East. The result of this situation has been valuable tech opportunities being pushed toward the Southeast and Midwest.
Why invest in American real estate, you might ask? Well, the tech behemoths like Google, Amazon, and Apple are on the move. Apple, for example, just released a $1 billion plan to launch a campus in Austin for 2020.
The only thing standing between you and a stable income in USD is a bit of research and for your Visa status. Confidence is booming in the following cities, overrunning predictions of an economic downturn.
The first thing mentioned in the much-cited 2020 PwC report is the need for effective administrative offices (mail logistics) in high-density areas as online shopping continues to grow.
Aside from the report by PwC, a meta-analysis by Buildium.com also found Austin as the country’s top investment destination. The median one-bedroom rent there is $1,154, so you get an idea of what the rent market looks like.
Overall, there were three patterns in these reports:
Millennials & Hipsters
Hipsters tend to be associated with millennials, a group that spans the ages of about 25 – 38. This group is important to you because they can be shown to spend their money in predictable ways you can capitalize on.
The median age in Austin is 33. Five years below the national U.S. average of 38. The average median age in the top 20 cities for investment is 34.
Trends in 2020 will prominently feature millennial culture. This group is now fully extended into the workforce and demands certain things from the cities, suburbs, and markets which they inhabit. It bodes well for cities that these demands are predictable, reliable, and powerful. In the U.S. some cities, like Portland and Austin use taglines like “Keep Austin Weird.” This is characteristic of these young new markets. They pride themselves on individuality and ability to shake up old patterns.
The cities that will thrive are those that provide hipsters with room to ‘live, work, play’ the way modern Brooklyn and Atlanta do.
Keep an eye on the micro-mobility sector. Where there are scooters there are hipsters.
In the U.S, technology leases more office space than any other sector. This should be important to you because recently, American investors have begun talking about “next-gen” tech hubs like Atlanta and Houston rather than Silicon Valley, which is the traditional home of tech.
In fact, it has been that tech-job growth is a strong indicator of office-rent growth. This has been reported for years in markets like Silicon Valley and Seattle, but it’s quickly becoming true in cities around the Midwest and Southeast. Canada also has a few cities like Ottowa where this correlation has been found.
Among those with the biggest rent-growth percentages in the past two years are midtown Atlanta (28.1 percent), Raleigh-Durham’s RTP/I-40 region (24.1 percent), and downtown Nashville (19.4 percent).
The fire is catching across the country, you could say.
Housing Crisis and Resolution
The populations of New York City, Chicago, and Los Angeles are projected to slow to a rate of just 0.2 percent growth annually, while Phoenix, Charleston, and Boise will swell at the significantly faster rate of 1.6%. The housing crisis in a lot of America’s major hubs, especially those in the West, has pushed a significant population inward from the coasts and toward the middle of the country, where job booms await.
Lower cost–of–living in cities like Charleston and Austin while players settle into their new equilibrium means that residents’ and investors’ dollars go significantly farther here than anywhere else in the country.
Taken in macro, this manifests itself as slowly rising rent prices in secondary cities throughout 2019 and presumably 2020 as well. The top–ranking cities demonstrate a 20 percent faster rent growth than the rest of the country. This is enough for property managers and owners to make a larger profit, but it’s not enough to scare renters into moving or buying homes at a faster rate than usual. Multifamily and single-family housing are also highly sought as housing needs continue to change for aging demographics.
Andrew Warren, one of the authors of the PwC report, says his market research firm found that investors continue to see U.S. real estate as a secure bet. The market nationwide shows signs of slowing, but steady growth.
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