“It isn’t enough to pick the right market anymore. We have to pick the right market that is going to be sustainable.” This sentiment, presented by a pension fund adviser, represented the thoughts of a number of interviewees. This look toward the future is clearly reflected in 2015’s market rankings.
To better reflect investors’ growing acceptance of a wider set of potential investment markets, a few changes have been made to improve the list of markets in this year’s rankings. The total number of markets has increased to 75. The increase is the result of allowing survey respondents to select individual markets from what had historically been a more aggregate geographic area. The aggregate market groups of New York City, south Florida, and Washington, D.C., are now each represented by three markets instead of one.
The Oakland/East Bay market now stands alone rather than being part of San Francisco, and Tacoma, Washington, has been separated from Seattle. To better represent each of the four regions, additional markets have been added. The fast-growing South region now has seven new markets: Birmingham, Alabama; Cape Coral/Fort Myers/ Naples, Florida; Charleston, South Carolina; Columbia, South Carolina; Deltona/Daytona, Florida; Greenville, South Carolina; Louisville, Kentucky; and Richmond, Virginia. To the Midwest region the following have been added: Des Moines, Iowa; Madison, Wisconsin; and Omaha, Nebraska. The Northeast and West regions also have been expanded: Buffalo, New York; Hartford, Connecticut; and Portland, Maine, are now part of the Northeast, while Boise, Idaho, and Spokane, Washington, have been added to the West.
In an effort to get a clearer picture of how the market really feels about the markets in the survey, we asked participants to give their opinions about the 2015 outlook for each property type by market. The result is that we can get a more complete picture of the overall position of each market. The final rankings present a more complete picture of how survey participants view each market when it comes to investment, development, and the local housing market.
The results are similar to those of previous years, although we do have some repositioning of the markets. The strength of the Texas economy continues to dominate the rankings in 2015. Houston completes its ascent up the ranks and claims the number-one spot in this year’s survey. Austin moves to the number-two position, pushing perennial top market San Francisco to the number-three spot. Denver moves to the number-four spot, and the Dallas/Fort Worth market completes the Texas markets in the top 20, coming in at number five.
The remaining markets in the top 20 are composed of a combination of core major markets: Los Angeles, Boston, New York, Chicago, and markets that seem to be the first market locations that capital seeks when investors begin to look outside the core—namely, Seattle, Atlanta, and Miami. The rest of the top 20 reflect the influence of the identified emerging trends that are expected to affect the real estate market in 2015, such as Charlotte, Raleigh/Durham, Nashville, and Portland.
In the 2014 rankings, Washington, D.C., slipped out of the top ten. The survey participants do not appear to have changed their minds on the near-term outlook for D.C. In this year’s survey, Washington, D.C., as represented by the District is ranked number 25. The northern Virginia suburbs of the D.C. market are ranked number 28, while the Maryland suburbs come in at number 51. New York–Manhattan experienced perhaps the most surprising move this year: the market moves to number 14. This move can be partly attributed to the fact that the New York City market is now looked at in a more granular fashion. Brooklyn comes in at number 22 and the other New York City boroughs can be found at number 48. The influence of Texas on this year’s rankings has been noted, but northern California also is well represented, with San Francisco, Oakland, and San Jose all in the top 20.
Source: Emerging Trends in Real Estate® 2015
If you would like to learn what trends are going on for our Imperial Valley real estate market for 2015, please call me for a free advice and consultation appointment at 760-235-9688