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Trying to predict the next hot real estate market is like catching an eel with grease on your hands: The moment you think you’ve got a handle on the next hot spot, everyone else has the same idea. Inventory shrinks while prices shoot up, and what once looked good suddenly cools.

However, if you’re prepared to be specific in your search, you can pinpoint the next great investment opportunity for different market segments.

Affordably Priced Markets

According to Realtor.com data, a few markets stand out if you’re looking for an affordable investment but are wary of high interest rates. However, you might have to hurry because—you guessed it—other investors are already waving their checkbooks. Recent data shows investors made up 14.8% of home purchases in the first quarter of 2024 —the highest percentage in the history of the data commenced, dating back to 2001.

“Investors are generally the first to pull out of the market, as seen in 2023, as well as the first to reenter, which we are seeing now,” Realtor.com senior economic analyst Hannah Jones said in a press release regarding Realtor.com’s Q1 economic report.

The investors Jones speaks of are mostly smaller ones, purchasing 10 or fewer homes, which made up 62.6% of investment buys—another groundbreaking number. Interestingly, Jones noted that higher interest rates and home prices caused larger investors to back away, while smaller investors, sensing deals, became more engaged in affordable markets.

The Midwest and South Are Good Bets for Investors

Crunching the numbers, these are the burgeoning, affordable markets where investors are snapping up deals. Not surprisingly, many are in the Midwest, with three of Missouri’s top five cities seeing around 1 in 5 homes purchased by investors in Q1:

Southern metro cities are also proving popular, in particular Birmingham, Alabama (18.7%) and Memphis, Tennessee (18.2%).

Other cities that have seen increased investor activity and are returning to pre-pandemic levels include:

Nine Cities Expected to Grow Over the Next 10 Years

GoBankingRates.com, as revealed on yahoo.com, spoke to a roundtable of Realtors from Keller Williams, Beach Life Premier, Caldwell Banker-Caine, and Berkshire Hathaway HomeServices Verani Realty. Here are their picks for markets that will grow in the next 10 years, plus my analysis of each.

1. Boise, Idaho

With home appreciation of 218% and year-over-year growth of 12% for the last decade, it might make you think that Boise has already gone through its golden years. But, not so, according to the experts, who claim more of the same lies ahead.

Boise’s housing market is expected to continue growing over the next decade due to several factors. For one, the city is experiencing strong population growth, driven by an influx of residents attracted by Boise’s affordable cost of living and high quality of life. Second, Boise’s strong job market, with rising wages and a diversified economy, contributes to sustained demand for housing. In fact, Boise is a mini Silicon Valley and has plenty of tech job offerings, a sign of strong wages and stability.

2. Fort Wayne, Indiana

Fort Wayne‘s median listing price of just under $200,000 is 102% less than the national median, but it has seen a price decline of 7.6% over the last year. Despite this, the fundamentals are there, with overall appreciation, population growth, and low property taxes, making this a solid place to put your cash.

3. Las Vegas, Nevada

What happens in Vegas stays in Vegas unless it’s discussing real estate—in which the whole country is in on the discussion. 

Nevada’s low taxes have seen Californians leave en masse for Las Vegas and surrounding areas. The hospitality industry, high rental demand for affordable housing, a growing population, and significant infrastructure investment have made Sin City an ongoing investment hub. With added industries such as healthcare, technology, and entertainment, investors should be OK with betting big on Vegas for years to come.

4. Seattle, Washington

Yes, Seattle is expensive, but it’s remarkably stable. The home of mega-corporations Amazon, Nike, and Starbucks—and now a new wave of tech businesses—has a robust track record of appreciation, with prices high and rising. Home values have doubled in the past five years, growing twice as fast as the national average since 2016. Last year, median home prices showed a 5.9% year-over-year increase, with continued growth expected.

5. Denver, Colorado

Denver has already enjoyed some major appreciation recently, with its median home price currently sitting at a strapping $600,000. However, according to real estate experts, its proximity to major cities such as Boulder, Fort Collins, and Colorado Springs, as well as nature-rich geography, has investors and residents teeming in, with more growth on the horizon.

6. Raleigh-Durham, North Carolina

Known as the Research Triangle, the major universities of the University of North Carolina at Chapel Hill, Duke, and North Carolina State University call Raleigh-Durham home. Home prices here generally follow the national average, and there are plenty of high-paying jobs in healthcare, technology, and pharmaceuticals, with large companies such as IBM, Apple, and Epic Games located in the area. These employment opportunities, matched with reasonable home prices, mean this area has plenty of growth potential.

7. Charlotte, North Carolina

A mild climate, only a few hours away from the beach or mountains, a vibrant job market (particularly in banking), and an affordable cost of living have many experts predicting that Charlotte will only continue to rise. Home prices are expected to increase by around 145% over the next decade.

8. Phoenix, Arizona

Home prices here have risen faster than a Phoenix thermometer’s mid-summer readings. However, tech jobs offered by Uber and Amazon, 200 golf courses, and a vibrant nightlife and restaurant scene all mean Phoenix is still a good bet for further home value hikes of 130% over the next decade— provided extreme weather doesn’t get too extreme.

9. Nashua, New Hampshire

Southern New Hampshire has been one of the beneficiaries of the work-from-home trend, with former Bostonians forgoing skyrocketing home prices and moving within a hybrid-work commuting distance. Experts predict the small but mighty Nashua will see home prices increase by 25% to 50% over the next decade.

Bonus: Three Small Towns to Invest In Within the Next Five Years

If you like the idea of people knowing you at the post office or saying “hi” to you at the grocery store, small-town investing might be more your speed. Small markets are generally more affordable than larger towns and cities and can produce incredible real estate opportunities.

Three small towns, in particular, are highlighted below. These are close to larger cities but certainly rural. With smart due diligence, you can line up great investments over the next few years.

1. Morganton, North Carolina

While the Research Triangle of North Carolina has boomed in recent years, Morganton (population 20,000) may also soon be on people’s radars as a cheaper alternative due to major grants from the U.S. National Science Foundation (NSF). One of those grants is for the North Carolina Sustainable Textiles Innovation Engine, which is set to receive up to $160 million in NSF funding over the next 10 years. Due to its proximity to nearby Asheville and the Blue Ridge Mountains, plus affordability, Morganton is expected to do well.

2. Shelbyville, Tennessee

“As the rising prices in Nashville drive the more budget-conscious homebuyers further out, I expect these locations to be an excellent place to park your real estate dollars over the next few years,” said Joe Hafner, broker and owner at Hafner Real Estate, in this article.

Located about 60 miles from Nashville and 25 miles from Murfreesboro, Shelbyville (population 25,000) should benefit from appreciation over the next decade due to the town’s location of whiskey maker Nearest Green Distillery, which has pumped millions of dollars into the area, making it a charming small town primed for further development.

Areas like this go to show how much of an impact businesses can have on a town and how that cascades into the local housing market. The best investors would seek this lesser-known opportunity out on their own.

3. Accord, New York

If you’re looking for a scenic hamlet in the Rondout Valley of New York, Accord in Ulster County offers views of the Shawangunk Mountains and accessibility from New York City. Filled with local farmer’s markets, artisanal shops, and a serious foodie scene, this quaint stop on the way further north to the state capital, Albany, appeals to those seeking a progressive sensibility, accessibility, and an agreeable pace of life. 

While Accord is a sleepy small town, Ulster County as a whole offers several real estate opportunities, from cash flowing long-term holds to short-term rentals. This is definitely a spot you’ll want to do some research on.

Best of the Luxury Market

But what if you want to invest in somewhere more upscale? Draper, Utah, is a destination to consider.

If you’re looking for a luxury home with the potential for equity appreciation, according to the Wall Street Journal, you could do much worse than parking your cash on Utah’s Silicon Slopes, specifically Draper.

Located near the Wasatch Mountain Range, between Salt Lake City and Provo, Draper has boomed since the pandemic. A new multibillion-dollar project called the Point is being developed on 600 acres of state-owned land, which will mix office buildings, housing, retail, entertainment and more. 

Great schools, a 30-minute commute to large cities and airports, and a striking natural landscape have seen home prices soar over the last few years. As of 2023, the annual median home price was $749,895. The area’s major development will be similar in the upcoming years. However, the risk of wildfires and landslides could increase home insurance costs, along with home prices. 

Streamlining Your Real Estate Investments

As you explore these up-and-coming markets, it’s good to consider how you’ll manage your growing portfolio. This is where property management software like Hemlane can be a game-changer, especially those venturing into new and unfamiliar markets.

Hemlane is designed to simplify property management tasks, from tenant screening and rent collection to maintenance coordination. For investors targeting multiple markets across different states, Hemlane’s ability to manage properties remotely can be valuable. Its nationwide network of local agents and maintenance professionals ensures you have boots on the ground, even if you’re investing from afar.

Moreover, Hemlane’s clear financial reports show you how your investments are performing across various markets, allowing you to make data-driven decisions about where to focus your efforts next. Whether you’re just starting with a single property in Fort Wayne or managing a diverse portfolio spanning from Boise to Charlotte, streamlining your operations with the right tools, you can focus on finding your next big opportunity.

Final Thoughts

With interest rates expected to fall significantly in the next 24 months while inventory increases, homebuying could soon be back in fashion after a turgid few years. However, investors need to buy smart for long-term appreciation and hedge against another downturn. 

Many of the towns and cities mentioned here are not major metros but offer accessibility and the potential for growth in their own right due to investment. They are also affordable and could cash flow once rates drop. 

However, if you have the money and are looking for appreciation rather than rentals, major cities such as Las Vegas, Phoenix, and Seattle or a tech hub like Draper might be an excellent place to park your money.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.