The editorial content represents the opinion of the author, and should not be construed as legal, tax, investment, financial, or other advice.
Buying a home will likely be the most expensive and complex purchase a family or individual ever makes. Deciding where we live depends on so many factors, from job prospects and proximity to family and friends to the appeal of the surrounding neighborhood. Looking for the best return on the sizable investment of purchasing a home adds another layer to the process.
To get a sense of which markets across the country would be best for buying a home strictly as an investment, Curbed conducted a meta-analysis, looking at metro-level real estate studies by the Urban Land Institute, Realtor.com, and the National Association of Realtors. It’s important to note that conditions vary considerably within a city and surrounding suburbs. But after crunching the numbers, these five metros in Texas and the Carolinas came out on top.
While they’re clustered in a handful of states, they represent a variety of markets and choices where property values are predicted to increase in the long term, all despite a national slow down in home value appreciation. The studies we’ve analyzed focus on local real estate prices. That’s just one factor among many—including displacement and climate threats—to consider when buying a home. But if a firm financial footing is a main concern for your foray into homebuying, here are five relatively affordable areas worth investigating.
Charlotte, North Carolina
Median home price: $248,811
Buoyed by a diversifying economy, strong job market, and mega-developments set to reshape the region, the Queen City’s real estate market has delivered reliable returns; home values have grown by more than 4 percent on average for the last 40 years. Just last year alone, home values were up 5.8 percent and sales prices were up almost 10 percent. But experts believe that Charlotte has the right economic engine, as well as relative affordability, to continue to grow. Of the top 25 markets in the country analyzed by Zillow experts, it was the only one that wasn’t expected to underperform the national average next year. In picking Charlotte as a market expected to outperform over the next five years, the National Association of Realtors highlighted affordability, especially compared to costly coastal cities. Celebrated as a “millennial boomtown,” Charlotte has the momentum to make a family’s home investment really add up over time.
Charleston, South Carolina
Median home price: $328,110
Boasting historic homes and cobblestone streets, Charleston was named a “small jewel with tremendous growth potential” by the Urban Land Institute. That’s an apt description for this charming southern city. Charleston is a bit of a boutique market; supply will be especially constrained in this relatively small city, market analysts argue, meaning home values should continue their steady march upwards. And it has been steady. Last year, the regional housing market nearly met the record-setting growth of 2018, according to the CEO of a local realtor association, and the high-end segment of the market has boomed in recent years, seeing more than a 50 percent growth in value since the market hit its low point after the Great Recession. If you’re looking for affordable or entry-level homes, look elsewhere, but investments in more expensive real estate seem poised to pay off.
Median home price: $233,148
Recent reports about the Dallas housing market sound spooked, and many predict the boom of the recent past is over. It’s a testament to North Texas that a slower version of growth still makes it a city with which to contend. The larger Metroplex continues to see an increase in population, corporate relocations, and more expansion. Although some think the housing market is overvalued, the fundamentals of job growth, a booming population, and less-onerous home building regulations mean that Dallas still looks good in the long term. Last fall, Zillow predicted home prices would rise 4.5 percent in Dallas in 2020; that’s pretty good for a market that’s supposedly settled down. Dallas has also been incredibly popular over the last decade, with a population that jumped more than 12 percent between 2010 and 2018. Many of the forces creating the exodus to Texas, especially high housing costs elsewhere, aren’t likely to reverse themselves anytime soon.
Raleigh, North Carolina
Median home price: $284,246
A booming part of the Research Triangle, Raleigh has benefitted from the transformation of the surrounding region into an innovation hub—the percentage of local jobs in the tech sector here ranks third behind Silicon Valley and San Francisco. Named the second-hottest real estate market in 2020 by the Urban Land Institute, Raleigh and nearby Durham boast young populations, dynamic developments in their downtowns, and rising home values (which shot up fifty percent in the last decade). Homes in Raleigh saw their value grow 5.5 percent in 2019, and Zillow forecast 4 percent growth in 2020.
San Antonio, Texas
Median home price: $184,322
If Dallas is the marquee metro for investment, then consider San Antonio a smart value. Often overlooked despite its size, San Antonio has seen single family home prices climb 8.9 percent over the last year, according to the Federal Housing Finance Agency. It’s also building at a fast clip, expanding in nearly every direction, and adding new high-rises and apartments to the fast-growing downtown. But what may be the city’s biggest advantage is that it pairs affordability with growth. San Antonio may be the only major market in the U.S. that has seen an increase in the production of sub-$200,000 homes, says Jack Inselmann, regional director at Metrostudy. With low prices and a steady economy, it’s increasingly a place that’s attractive to out-of-town buyers, especially families looking for affordable starter homes and investors looking to rent out homes.