2016 BiggerPockets Real Estate Investment Market Index

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2016 BiggerPockets Real Estate Investment Market Index

Mindy JensenPro Member
BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes

The 2016 Real Estate Investment Market Index is now live on the BiggerPockets Blog.

Written by our Director of Operations (and spreadsheet lover) @Scott Trench, this study analyzes the top 50 Metropolitan Statistical Areas to determine those that were most likely to produce outsized returns for residential real estate investors.

Looking for a new market? This Index will show you where investors are making the most money (and where they're not doing so well).

Want to see how your market stacks up to the rest of the country? 

Dallas, TX, Portland, OR, Denver, CO, Miami, FL, Tampa, FL, Seattle, WA, Nashville, TN, Atlanta, GA, Houston, TX, Austin, TX, Fort Myers, FL, San Diego, CA, Los Angeles, CA, Virginia Beach, VA, Providence, RI, New York, NY, Baltimore, MD, Hartford, CT, Washington, DC, Indianapolis, IN, Nashville, TV, San Francisco, CA, San Jose, CA, Jacksonville, FL, Pittsburgh, PA, Oklahoma City, OK, San Antonio, TX, Kansas City, MO, Birmingham, AL and Detroit, MI all show up on the list.

How does your city stack up to the rest of the country?

Read the Index now...

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Bill S.Pro Member
Moderator
Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
9y

@Nick Moser A significant portion of the Denver market returns are related to appreciation (rent growth and property value increase). Most of the resent data I have seen indicates that there is no end in sight for this as long as current trends continue. There is concern that the overall economy is slowing a bit which will provide some headwinds. Basically the numbers (demand vs supply) say that we should continue to see growth (rents and home prices). At the same time we all know from experience that things don't last forever so it stands to reason that the current trends will end. The million dollar question is, When? It is always advisable to do deals that make sense in terms of income and debt service. If you are a buy and hold investor, there is no reason not to buy if it makes sense for you today. I don't think it's advisable to buy a negative cash flow deal or a deal you will need to get out in 3-5 years. The bottom line is that in 30 years the price we paid for real estate today will be laughable. With the interest rates we are paying today we will wish we had bought the whole world. You might look at another market and see you could have done better there but I don't think there will be any regrets about buying Denver real estate now after you have owned it 30 years.

There appear to be some head winds coming so it's no time to really stick your neck out and it might be a good time to put some aside for a rainy day. At the same time, it's hard to make a reasonable case that the market is going to crash in the near term.

Ultimately you have to do what makes sense for you.

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  • Mike CumbieBusiness Member
    REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
    10y

    404

    Page Not Found!

    We're sorry, but we can't find the page you were looking for. It's probably some thing we've done wrong but now we know about it and we'll try to fix it. In the meantime, try one of these options

    :(

    2Reply
  • Mike CumbieBusiness Member
    REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
    10y

    Fixd't

    :)

    2Reply
  • Mindy JensenPro Member
    OP
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    10y

    Hi @Mike Cumbie. Try again. I missed a hyphen...

    [email protected]Podcast Guest on Show #261
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    1Reply
  • Tyler HodgsonBusiness Member
    Investor · Flower Mound, TX · Member since 2016 · 245 posts · 192 votes
    10y

    2-year win streak for DFW! 

    2Reply
  • Kuba F.Pro Member
    Real Estate Investor · Los Angeles, CA · Member since 2013 · 2k+ posts · 694 votes
    10y

    Interesting to see Los Angeles appreciation so low as a region as I'm seeing double digit rent and value increases in my neighborhood.  I wonder what the statistical area includes, if it includes Riverside, and Ventura counties, or even San Diego, or only Los Angeles county proper.

    1Reply
  • Rohan Attravanam
    Sunnyvale, CA · Member since 2016 · 20 posts · 7 votes
    9y

    Fantastic resource !! Thank you @Mindy Jensen and @Scott Trench for this.

    3Reply
  • Zack S.
    Investor · Orlando, FL · Member since 2016 · 18 posts · 5 votes
    9y
    Does anyone know of a similar report for commercial properties and multi-unit residential? Thanks!
    0Reply
  • Nick Moser
    Denver, CO · Member since 2015 · 11 posts · 3 votes
    9y

    Wow, thanks for this, such a terrific resource! As a new investor looking to make their first deal, it does concern me that we may be near the top of the market. Did anyone else have similar concerns when making their first deal? I live in the Denver area and looking for a rental property. So based on strategy and the Denver market, it is "safer" than other markets and strategies (flipping). 

    0Reply
  • Eric R.
    Washington, DC · Member since 2016 · 36 posts · 7 votes
    9y
    Great information. Thanks! I've been interested in investing outside my Washington, DC area and this sort of reinforces my thoughts. Need to build bridges & contacts though.
    1Reply
  • Bill S.Pro Member
    Moderator
    Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
    9y

    @Nick Moser A significant portion of the Denver market returns are related to appreciation (rent growth and property value increase). Most of the resent data I have seen indicates that there is no end in sight for this as long as current trends continue. There is concern that the overall economy is slowing a bit which will provide some headwinds. Basically the numbers (demand vs supply) say that we should continue to see growth (rents and home prices). At the same time we all know from experience that things don't last forever so it stands to reason that the current trends will end. The million dollar question is, When? It is always advisable to do deals that make sense in terms of income and debt service. If you are a buy and hold investor, there is no reason not to buy if it makes sense for you today. I don't think it's advisable to buy a negative cash flow deal or a deal you will need to get out in 3-5 years. The bottom line is that in 30 years the price we paid for real estate today will be laughable. With the interest rates we are paying today we will wish we had bought the whole world. You might look at another market and see you could have done better there but I don't think there will be any regrets about buying Denver real estate now after you have owned it 30 years.

    There appear to be some head winds coming so it's no time to really stick your neck out and it might be a good time to put some aside for a rainy day. At the same time, it's hard to make a reasonable case that the market is going to crash in the near term.

    Ultimately you have to do what makes sense for you.

    4Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    9y

    DC and NYC in the bottom 10?

    [email protected]301-893-4635Podcast Guest on Show #192
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    0Reply
  • Thomas Barksdale
    Haverhill, MA · Member since 2016 · 42 posts · 4 votes
    9y
    Loved the spread sheet zip codes & price range as buyers list awesome thanks.
    0Reply
  • Steven Singleton
    Investor · Mountain View, CA · Member since 2016 · 17 posts · 11 votes
    9y

    Interesting resource! However, I will say take it with a grain of salt. The concept of a "Best Real Estate Market" can be highly dependent on environmental factors and your personal investment strategy.

    There are many factors one should look at including but not limited to:

    • Vacancy Rates
    • Housing Starts / Completions
    • Appreciation
    • Sale Prices
    • Public Development
    • Corporate Investment
    • Employment Rates
    • Price / Rent Variance

    It can be easy to get overwhelmed with such a huge variety of metrics. But, it's important to determine what metrics are important for your"best market" based on your investment strategy.

    • If I'm trying to gain on Appreciation and exit my position in 3 - 5 years, Austin might be a great bet.
    • If I'm trying to fix & flip to exit my position quickly, Atlanta might be a great bet.
    • If I'm trying to buy and hold over the long term Tampa might be a great bet.

    Lists are fun to look at but, don't use lists alone to make real long-term decisions :)

    *The above are not actual recommendations by strategy. Purely examples.*

    3Reply
  • Dennis Canon
    Specialist · Los Angeles, CA · Member since 2016 · 221 posts · 58 votes
    9y
    Great info. Although I feel rent here in SoCal is fairly high.
    0Reply
  • Nick Moser
    Denver, CO · Member since 2015 · 11 posts · 3 votes
    9y

    @Bill S. Appreciate the feedback. I'm not taking appreciation into account at all and will only consider properties that produce positive cash flow. My plan is also to hold onto properties long term and only use selling as a backup plan. 

    I agree that the end is not in sight yet. I have seen average home prices drop slightly in the past couple months, but population growth isn't following suit.

    I will be overly cautious with my first deal (and most likely deals to follow), so won't be biting off more than I can chew. It will also be my first home purchase, so worst case, I'll make that my primary residence, learn from the experience and more on. 

    0Reply
  • Andrew E.
    Investor · Member since 2016 · 54 posts · 21 votes
    9y

    I wonder how Reno, NV compares to this list. A large population increase over the horizon and the TESLA gigafactory down the street starting operations soon. Real upward potential or over-hyped? Any ideas?

    0Reply
  • Mindy JensenPro Member
    OP
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    9y

    @Andrew E. , this study looked at investment cities from 2015 and 2016.

    I'm pretty sure that gigafactory can be seen from space! I can't imagine it wouldn't have at least a small bump in real estate... Stay tuned for the 2017 study.

    [email protected]Podcast Guest on Show #261
    BiggerPockets
    0Reply
  • Andrew SyriosPro Member
    Moderator
    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    9y

    This looks great, well done!

    Podcast Guest on Show #121
    0Reply
  • Neil Patel
    Newport Beach, CA · Member since 2016 · 19 posts · 8 votes
    9y

    thank you @Mindy Jensen and @Scott Trench for a very helpful piece. Will be interesting to see which markets stay/leave the top 10 after the election in 2017.

    0Reply
  • Joshua Howaniec
    Contractor · Indianapolis, IN · Member since 2016 · 267 posts · 144 votes
    9y

    Ha, on the upside, this will keep some out of state competitors out of my Indy market! Awesome resource by the way! 

    0Reply
  • Chris Low
    Investor · Redding, CA · Member since 2016 · 180 posts · 102 votes
    9y

    @Andrew E. - Your comment on growth in Reno intrigues me since it's not that far away from us and is an area we've considered investing in. I had heard about the TESLA factory, but would like to hear more about a large population increase on the horizon. What are the demographics for the population increase? Millenials? Renters or Buyers? Income level? Any insight would be much appreciated.

    A large population increase over the horizon and the TESLA gigafactory down the street starting operations soon

    1Reply
  • Bill SchrimpfBusiness Member
    Real Estate Agent · Reno, NV · Member since 2014 · 353 posts · 189 votes
    9y

    @Chris Low Tesla investment in the Reno area is a part of what is being billed as the 'largest industrial park in in the world' RENO TRIC

    It's likely to bring mostly skilled and unskilled labor jobs needing B- to C- housing.

    Take a look at this article from the Reno newspaper regarding the housing shortage RGJ Article

    There is opportunity in my opinion.  From some perspectives its an expensive market, from other perspectives, it's ripe for the picking!

    [email protected]775-741-2326
    ERA Realty Central - Bill Schrimpf58 Reviews
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    0Reply
  • Chris Low
    Investor · Redding, CA · Member since 2016 · 180 posts · 102 votes
    9y

    This is great info, @Bill Schrimpf. Thanks so much for sharing. Definitely a market we want to look into.

    0Reply
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