There are many fundamentals that drive a successful real estate market. But the two most important factors are job and population growth. A market that has strong projected population growth will of course need additional housing. And if jobs are helping to spawn that growth, chances are income levels will rise as well. A growing population that has rising income levels will eventually push real estate prices upward.
It's shouldn't be a surprise that a majority of the markets that are projected to provide the best value for investors are on the West Coast. In this article published by Forbes, Seattle (#1), San Francisco (#2) and Los Angeles (#5) are 3 of the top 5 cities projected to provide solid commercial real estate investing opportunities. (New York and Washington D.C. round out the top 5.)
It makes sense. More and more people are flocking towards the Pacific seeking better weather, dynamic downtowns and opportunistic economies. According to a UCLA study, California's population alone is expected to grow 39% by 2020!
So how will this affect the residential market? Well, there's no guarantee that an improved commercial market will lead to an improved home market. However, investors have a better chance of seeing home prices rise in fundamentally strong markets like Seattle, San Fran and LA than in struggling cities like Detroit. So if you're contemplating investing in real estate, and NOW is the time to invest in real estate, head west young man.
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