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What Are The Best Cities to Invest in Real Estate in 2022?

Christina

June 17, 2022

Finding smarter, better-performing investments for your real estate portfolio can be as simple as opening up a map and looking into real estate markets across the country.

Let’s dive into what makes these bankable cities such worthwhile real estate investments in the first place.

Cities on the Rise in 2022

  1. Los Angeles, California
  2. Tempe, Arizona
  3. Charlotte, North Carolina
  4. Austin, Texas
  5. Phoenix, Arizona
  6. Dallas-Fort Worth, Texas
  7. Salt Lake City, Utah
  8. Houston, Texas
  9. New York City, New York
  10. Boston, Massachusetts

There’s plenty of buzz around these cities as the increasingly lucrative real estate markets. Now that you know a few key factors that may be driving these housing markets, let’s take a look at some of the best cities for real estate investment this year.

Los Angeles, California

When it comes to the most hyper-prime investment properties, nothing comes close to Los Angeles. In the Westside region alone, L.A. hosts some of the most lucrative home values and desirable neighborhoods in the country: Beverly Hills, Malibu, and Santa Monica, to name a few.

Rich in industry, sunny weather, and cultural caché, real estate in Los Angeles will continue to be the most bankable investment in 2022.

Tempe, Arizona

Tempe has a population of over 200,000—it has obtained over 25% new residents since the last census. Arizona is one of the fastest-growing states population-wise, and Tempe is one of the U.S. cities leading this boom in growth.

Its growing population has attracted the attention of real estate investors across the country.

Rent demand is relatively high in Tempe as well. The city is home to three colleges. With a large student body of renters in town, rental properties have become increasingly competitive.

Charlotte, North Carolina

Research indicates that Charlotte’s population will grow by 50% come 2050. Charlotte’s already growing population is leading to high acclaim for its real estate performance today.

Warm weather, a great food scene, and an increasingly diverse cultural background are just a few reasons why the real estate market in this southern city continues to impress investors.

Cultural hotspots in the city like Plaza-Midwood continue to draw in young, educated people, while Uptown Charlotte is host to business hubs like Wells Fargo’s eastern headquarters. There’s a lot going for Charlotte, where its real estate market continues to blow up.

Austin, Texas

Austin is one of the fastest-growing cities in the country.

Long known for its quirky, off-beat character, this Texan city consistently draws in a hip, young crowd. It’s got some legendary BBQ and hosts the iconic festival SXSW, where the arts, tech, food, and more merge into one weekend of intrigue and entertainment.

Tech companies are increasingly calling Austin home as well. High octane groups like Oracle and Tesla have set up offices in the city, providing the city with robust, high-income job providers that will only continue this city’s massive growth.

Phoenix, Arizona

Arizona’s capital city Phoenix has benefitted from shifted population demographics over the past decade.

It was hands-down the fastest-growing large city in the country between 2010 and 2020. In that span of time, the population grew from 1.4 million to 1.6 million, an incredible 11.6% increase. With that increase in population, real estate has been booming in this sunny city.

Both residential and commercial properties are in high demand in Phoenix as the city grows at an explosive rate. 

Dallas-Fort Worth, Texas

From July 2020 to July 2021, the population of the Dallas-Fort Worth metro area added almost 100,000 people. This massive growth makes this Lone Star state city the new front-runner in the country’s fastest growth.

Texas has seen huge amounts of population growth over the past decade. Dallas-Fort Worth, one of the state’s largest cities, helped continue that trend. This massive influx of people to the city has made DFW one of the hottest real estate markets in the country.

With no sign of slowing down its record-setting growth, real estate in DFW looks like a solid investment.

Salt Lake City, Utah

Utah is projected to add 2.2 million people to its population by 2060. Salt Lake City, the state’s largest city, is expected to take on the brunt of that population explosion.

Salt Lake City draws in nature lovers and city slickers alike. This city is close to some of the best skiing resorts in the country, making it a perfect location for people who want to enjoy winter sports with a short commute.

In addition to the 2.2 million to Utah’s population, the state is expected to add 1.3 million jobs by 2060. In the coming decades, people and high-income tech jobs will be sweeping through Salt Lake City.

The earlier you invest in this booming city, the better.

Houston, Texas

It should come as no surprise that Texas’s largest city, Houston’s population has exploded in the past decade.

From 2020 to 2021 alone, almost 70,000 people moved to Houston, pushing its population to 7.2 million. Just behind Dallas-Fort Worth and Phoenix, Houston is one of the country’s top three fastest-growing large cities.

New York City, New York

Don’t sleep on the city that never sleeps.

Real estate in New York City is some of the most valuable in the world—and things don’t appear to be changing on that score any time soon.

From 2010 to 2020, the New York City metro area added 600,000 people to its population. Along with it, vast amounts of construction for housing and development have transformed places like Hudson County, New Jersey, which is coming to be known as the city’s “sixth borough.”

New York is the country’s largest city, with 8.8 million people living there. It’s one of the world’s financial capitals, with vast amounts of capital flooding through the city every day.

Real estate assets in NYC are some of the best investments in the world.

Boston, Massachusetts

Boston’s population and economy saw tremendous growth from 2010 to 2020. Over the course of the decade, 149,000 units of new housing were constructed to meet the increasing demand for property in Beantown.

Boston is a leader in medical science, with many high-income earners working in the healthcare field. Boston is also home to some of the world’s most prestigious schools, like M.I.T. and Harvard.

With job growth in high-earning fields and increasing housing construction, the property in Boston is worth the investment.

What Makes A City’s Real Estate a Good Investment?

  • High rental demand
  • High job growth
  • Population growth

Understanding the economic factors and market trends that make a city’s real estate more lucrative than another’s is the key to smarter investment decisions. Once you have a grasp on what makes a good market, you can follow the signs to better returns for your portfolio.

Here are a few compelling trends that make real estate markets more attractive for investors. If a city has one or more of these trends in play, it’s worth your time to investigate its market potential.

High Rental Demand Indicates a Good Real Estate Investment

One of the best indicators of the quality of a city’s real estate market is the rental demand—it’s directly linked to the overall value of property rentals.

If a city has a high rental demand, properties are in short supply and, as a result, more valuable than they would be if demand were lower.

Rental properties can refer to a wide range of property types.

More often than not, residential properties or housing are most closely measured by rental demand. Housing tends to be the most competitive market in a city’s real estate, although rental demand can also influence a higher value for commercial and industrial properties.

What determines rental demand? A wide array of trends and economic factors.

The amount of listings in the market is a clear indication of the supply, which necessarily informs demand. Fewer listings mean fewer options for leases, which generally leads to a price increase in rentals.

When listings are fewer and further between—and go faster—you can count on the fact that the city’s real estate market is heating up and warrants a closer look for investment.

High Job Growth Indicates a Good Real Estate Investment

Even if the rental demand isn’t quite that high yet, job growth will certainly indicate that a city’s real estate market is on the move.

Job growth is generally one of the most reliable indicators of a strong market, real estate or otherwise.

With more jobs in the market, people in the area become more financially empowered, leading to higher circulation of capital in the area. The real estate market is naturally one of the first sectors to benefit from this increased cash flow.

When people settle into a place with a secure line of work, they need a place to live. Jobs bring economic prosperity across the board. And the more prosperous the area, the more people want to live there.

Job growth is a key indication residential real estate is on the rise and that investors should get in as early as possible.

In addition to residential real estate, commercial real estate becomes a bankable investment in cities with high job growth. After all, business is booming if the job rate is growing. That means commercial spaces like offices, stores, and more are increasingly becoming reliable income earners when leased out to businesses in the area.

If the job growth continues upward, more and more businesses may flock to the city; commercial real estate becomes even more lucrative as transplant businesses lease spaces to operate.

Across sectors, job growth is a clear bellwether for lucrative real estate investments on the horizon.

Population Growth Indicates a Good Real Estate Investment

If more people are moving to a city, that’s a strong indication that the local real estate will be increasing in value.

People might be moving to a new location for many reasons. Job growth is a prominent one, but in 2022, more factors beyond job growth are driving people to move to a given place.

The population doesn’t grow at a one-to-one ratio with job growth. Especially as remote work becomes more and more viable, non-economic factors increasingly drive folks to choose where they want to live.

On the contrary, population growth can be just as much a predictor of economic growth as economic growth predicts population growth. More people means more capital flowing through the area—and with higher populations of people in the area, the real estate market necessarily increases in value. 

Invest With Christina

Real estate is a great investment opportunity because it’s a stable, long-term asset and because there’s almost always a market out there that will bring in better returns.

If one city isn’t particularly inviting for investment, there’s always another location.

In the wake of the 2020 census demographics, there are some exciting investment opportunities in emerging markets. Cities that are newly experiencing all sorts of growth across sectors make for a compelling selection of locations to invest in property.

And, of course, there are mainstay hyper-prime real estate markets that continue to dominate.

Check out our educational resources and learn from proven professionals in real estate investing.

Christina has been giving investors quality returns for over 40 years. In that span of time, we’ve fine-tuned our investment strategy and acquired a portfolio of high-value real estate assets that deliver results.

If you’re interested in investing with us, reach out to Christina here.

Sources:

Tempe, Arizona Population 2022 | World Population Review

Charlotte region to grow 50% by 2050 | WCNC

No large city grew faster than Phoenix | New York Times

Collin, Denton, Tarrant counties see population increases; DFW ranks first nationwide in population growth | Community Impact Newspaper

Utah population to increase by 2.2 million people through 2060 | Kem C. Gardner Policy Institute

Houston’s population increased as other major cities lost resident’s in nation’s slowest year of growth | Houston Chronicle

Can’t Keep a Great City Down: What the 2020 Census Tells Us About New York | Manhattan Institute

Five things the census tells us about growth in Greater Boston | The Boston Globe

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