Whether you’re looking for a perfect home to live in or as a real estate investment, you want to spend your money wisely. And with as hot as the real estate market has been over the past few years, how will you know where you can make a solid investment in an area that hasn’t reached its maximum financial potential?
GOBankingRates asked real estate experts and investors for their thoughts on the best states for purchasing property over the next five years . They agreed on two things, for sure: avoid the pricey coasts and look inland.
According to Zillow, the average home price in Ohio in July 2024 was about $234,000 — nearly $130,000 less than the average price nationally. Real estate experts have taken notice.
“In cities like Toledo, Columbus, and Dayton, there is a lot of projected growth,” said Seamus Nally, the CEO of TurboTenant , which helps landlords with their property management. “People are already starting to move to these areas in higher numbers, as the economies are growing and job opportunities are expanding. But, real estate prices are still pretty good right now. In the next five years, I expect prices to start increasing as the population and demand in these areas increase, so investing sooner rather than later may prove quite fruitful.”
The average home prices in Dayton ($150,231) and Toledo ($122,522) fall well below the average price in Ohio and rose about 8% in the past 12 months, per Zillow.
Michael Gevurtz, founder and CEO of Bluebird Lending — a national private lender largely servicing real estate developers and investors — concurred that Ohio is a popular spot for property acquisition based on the increase in loan applications from the state.
However, states adjacent to Ohio could prove to be good places to buy, whether as your primary residence or an investment. Homes there generally rent for more than the mortgage, and the state has a low income tax, which can drive growth, he said.
That trend is spreading to other midwestern states, including Wisconsin, Illinois, Michigan and Indiana, he said.
Florida
Austin Hair, the managing partner at Leaders Real Estate , says Florida is an ideal spot to buy property. He has been investing in real estate in the state since 2011.
“Even with massive interest rate hikes and historically high appreciation, the market has continued to show strength,” he said.
Florida has some intangibles that make it a winner, according to Hair.
“Year-round warm weather and no state income tax is a combination that’s hard to beat,” he said. “Even as real estate keeps rising, people keep moving to the state.”
The value of Florida real estate climbed by 63.7% in the past five years but only 1.8% in the past 12 months, Zillow reported. Still, Hair said, there’s room for growth in a state where the average home value is about $400,000.
“Florida also rose faster than the national average, which is why we are seeing a slowdown in appreciation. However, the population is continuing to grow by pulling people away from other states. So, the fundamentals are there to see long-term appreciation.”
Other Southern-Tier States
“Now and over the next five years, the Sunbelt region will house the best states to buy property,” said Alex Blackwood, the CEO and co-founder of mogul , a fractional real estate investing app.
“Specifically, states like Texas, Tennessee and Georgia are already seeing growth and have drawn a tremendous amount of attention over the past several years. Suburbs outside of major cities like Houston, Dallas, Nashville and Atlanta are heating up as more people are moving there than are leaving, leading to lower supply and higher demand. … So in the next few years, I expect properties in these cities will become increasingly unaffordable — making now the perfect time to invest in these high-profile areas.”
New York
Well, not all of New York.
In his 2021 book, “How to Prepare for Climate Change: A Practical Guide to Surviving the Chaos,” author David Pogue mentions the upstate New York cities of Buffalo and Syracuse as ideal places to live amid climate change. He dubbed them “climate haven” cities for their lack of wildfires and hurricanes and supply of clean, fresh water.
Buyers have taken notice of those locales and others in New York that are climate havens, said Angelica Ferguson VonDrak , a real estate associate broker in the state’s Hudson Valley region.
“The populations of the Hudson Valley, Catskills and Adirondacks regions are composed of many people who love the outdoors and are generally climate-conscious, so to speak. Because of this, there are many climate initiatives in place in the various locales and local denizens live in an ecologically thoughtful way,” she said.
“We love and want to preserve the natural beauty of these areas. I’m already seeing many ‘climate refugees’ relocating to upstate N.Y., especially from places like California. I predict that we will only see more of this in the next few years and I anticipate that property values will continue to rise as the desirability of the region continues to grow.”
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