If the flocks of cranes dotting skylines across the U.S.—and rising real estate prices— are any indication, now seems like the right time to be developing downtown. The housing market has plenty of momentum, and so-called second-tier cities are having their moment. As U.S. cities continue to expand, investors must decide where exactly to go with their money.
To create this list, Curbed consulted a number of experts—representing the Urban Land Institute (ULI), RCLCO Real Estate Advisors, Zillow, Trulia, and Realtor.com—to find markets tapped to be fast-growing and most dynamic in 2018. It’s notable that many traditionally top markets, especially in the Northeast, didn’t make the cut. While each city has different strengths and upsides, they all present unique opportunities.
Austin: Tech frontier flourishes
The Texan tech capital continues to build up and out at a steady clip as high-rises take shape, the East Side real estate rush rolls on, and the “city of the eternal boom” continues expanding.
Local firm Indeed.com plans to lease an 11-story tower in the ever-expanding Domain development (whose developer, Endeavor, is also slated to develop the Austin American-Statesman site south of Downtown). The Independent, which broke ground last year, is set to be the city’s tallest skyscraper, and a new luxury tower is also going up on downtown Austin’s Rainey Street.
There was some hand-wringing at the end of 2017 when economic forecasts predicted Austin’s decade-long growth spurt would slow down. But with forecasters still expecting 3 percent job growth, this is the kind of cooling off many places would love to experience. According to the Urban Land Institute’s Emerging Trends report, the city’s attractiveness to millennials continues to fuel economic gains, and scores of sizable developments showcase healthy growth in the tech sector.
Dallas: A boomtown building for the future
The Metroplex exemplifies the winning streak that has made Texas cities an engine of growth for almost a decade. Dallas alone has added 717,000 jobs since 2010, according to data from CBRE, a commercial real estate firm, and recent corporate relocations, such as Toyota, suggest more companies see a bright future in Texas. Outside Dallas proper, huge developments in nearby cities such as Frisco, site of what’s called the $5 Billion Mile, suggest the scope of current expansion.
Dallas is building at a fast pace, unlike pricier coastal markets. According to Zillow data, median rent in Dallas is $1,621, while the median home price is just $218,300. The Urban Land Institute predicts the robust homebuilding market will continue at this clip (Realtor.com corroborates that, estimating a 6 percent growth in home sales), and the city built 24,000 apartments last year, second only to New York City.
As more pockets of the region adapt more urban, walkable, and dense development patterns, Dallas increasingly resembles a mid-20th-century California, with a future of sunny weather and big growth up ahead.
Denver: The Mile High City’s continued momentum
Surveying Denver development news, it’s no surprise the city was flagged as a leading contender for Amazon’s HQ2. New transit options, including the soon-to-open G Line light rail, weave together the metropolitan area; apartment construction has become frenzied in the Union Station, Golden Triangle, and Highland areas; the RiNO neighborhood continues to expand with creative new developments; a massive transit-oriented development is coming to Stapleton; and the billion-dollar National Western Center development should kick off roadwork and initial build-out early this year. The planned construction of a supertall, Six Fifty 17, seems to symbolize the ambition, and growth, happening all across the region.
Fort Lauderdale: Emerging from Miami’s shadow
This former spring break mecca has suddenly become a lot more hip, especially in the eyes of developers. Ranked the sixth hottest market on ULI’s annual survey, the city and its formerly sleepy downtown have been infused with new condos, rail connections, and arts districts.
The MASS District (Music & Art South of Sunrise) and FATVillage (Flagler Arts Technology Village) have brought tech and creatives to the city, a transit hub built around a new rail connection to Miami and an inner-urban streetcar system have brought renters to downtown, and builders have responded in kind.
According to one developer, downtown will boast 13,000 total units when this current wave of construction projects are complete. The soon-to-open 223-room Dalmar Hotel will feature a rooftop patio, and the luxury Icon Las Olas, a 272-unit luxury apartment tower, will take up prime real estate downtown. They’re big signals that the development center of the city is moving away from the beach.
Nashville: Music City matures
Across the street from the Ryman Auditorium—former home of the famous Grand Ole Opry and a link to Nashville’s past—a new development looks toward the city’s future.
The $430 million Fifth + Broad mixed-use project, set to open in 2019, is just one of the more obvious signals that Music City is becoming a bigger financial and business center. Observers counted more than 50 cranes hovering above Nashville last year.
Analysts have praised the city’s low cost of business, connectivity to the East Coast, and low cost of living—Zillow found median rent was $1,498, and the median home cost $228,900—as key factors driving job growth and resettlement.
One of Realtor.com’s hot homebuying markets for 2018, Nashville is also witnessing a commercial boom. Capitalizing on the growth of tourism, numerous hotels have broken or will soon break ground, including boutiques like the Joseph and the Printing House. New projects in the River North neighborhood are drawing tenants, and the gargantuan, billion-dollar Nashville Yards project has started taking shape.
Portland: A rising riverfront
Known as Bridgetown—see the city’s new car-free Tilikum Crossing—Portland has recently made big moves to expand and develop its waterfront, building off years of growth that have transformed areas such as the Pearl District and Old Town.
The Zidell Yards site, a former 33-acre scrap yard on the city’s south waterfront, is in the beginning stages of being transformed, set to house 2,200 residential units, 1.5 million square feet of office space, three parks, and a public plaza and waterfront by 2020. Other megadevelopments, including Nike’s 1.3 million-square-foot expansion and a number of new health care facilities, hint at the city’s still-growing creative and biotech industries.
Raleigh-Durham: An affordable center for innovation
While they may not house the corporate headquarters of other growing cities, Raleigh and Durham have first-rate universities and booming economies that are vaulting the Research Triangle area to first-tier status.
Tech hubs like American Underground, part of the massive redevelopment of the American Tobacco historic district, have become centers of a resurgent tech scene, and the area’s median rent of $1,441 offers affordable living for budding entrepreneurs.
In addition to larger projects—like the Dillon, a mixed-use project opening in Raleigh’s Warehouse District this fall, and Mosaic, a large, $800 million mixed-use commercial and retail space—housing and suburban developments, especially in Apex, Cary, and Wake Forest, are rolling out at a breakneck pace. More than 600 new subdivisions have been built or greenlit in region in the past seven years, adding 40,000 new homes. Even with that new inventory, home prices have spiked: In Raleigh, the median home costs $314,900, according to Zillow, up 16.9 percent from 2016 to 2017.
Salt Lake City: Center of a booming state
Utah’s cultural and business capital has seen record-setting growth recently, with new marks for most dollars spent and most new square footage added set last year, and new apartment construction struggling to keep up with demand. It’s benefiting from Utah’s overall economic strength, with a 2.9 percent job growth, tied for the strongest in the country.
With the economic winds at its back, the city is also laying the foundation for future success, with a new Downtown Rising plan to continue to develop the urban core, and a $3.6 billion airport reconstruction project hoping to firmly establish the city as more of a national and international hub. Realtor.com predicts a healthy 4.5 percent home sales growth in the region this year.
Seattle: Still riding a tech boom
If you think Amazon’s plans for a second headquarters means Seattle real estate is tapped out, think again.
In the midst of becoming a true gateway city, according to the Urban Land Institute, Seattle will continue to grow. Even Amazon’s plans for the city are huge, biospheres included; its forthcoming office projects under discussion or permitting would occupy 12.8 million square feet by 2022. Large-scale projects, from the recently finished Mark to the soon-to-break-ground Washington Convention Center Expansion, reflect the city’s boom, with 100,000 new residents arriving in the last 10 years, mostly since 2013. Growth has created affordable housing and infrastructure challenges, but the city has made moves to address them, with transit extensions in the works “in nearly every direction” and a housing and livability strategy rolling out on a small scale in select neighborhoods.