As the real estate landscape continues to evolve, savvy investors are always on the lookout for emerging markets with strong growth potential. The American South, with its diverse economy and attractive quality of life, has caught the attention of many real estate professionals.
GOBankingRates spoke with Chris Wesser, the president and executive chair of Redy , a unique marketplace that rewards home sellers for choosing agents aligned with their sale goals, to get his insights on the most promising Southern cities for property investment over the next five years.
Wesser also emphasizes the complexity of real estate market predictions. He said, “Predicting which real estate markets will be hot or cold 5 years from now is exceedingly complex, but investors can increase their odds of success if they develop a methodology and stick to it when making investment decisions.”
Charlotte tops Redy’s list of expected best performers in the South. As Wesser explained, one of the key factors driving growth in cities like Charlotte is job growth in popular fields like technology, manufacturing and banking.
But according to Wesser, “this does not mean massive changes (like being selected for an Amazon headquarters), but rather above average growth relative to the size of the market.”
Charlotte’s robust banking sector, coupled with its growing tech scene, positions it well for continued economic growth and, by extension, a strong real estate market.
Nashville, Tennessee
Nashville’s appearance on the list of expected best performers isn’t surprising given its recent boom.
Wesser pointed out a crucial factor that applies to cities like Nashville: “Housing Supply vs. Demand — this is a combination of existing and expected housing unit supply versus actual and expected inbound migration.”
Nashville’s popularity among young professionals and its thriving music and entertainment industry contribute to strong inbound migration, potentially outpacing housing supply and driving up property values.
Atlanta’s inclusion on the list speaks to its economic diversity and continued growth. Wesser noted that parts of metro Atlanta benefit from value or perceived value.
“This is based on average home price compared to analogous areas with similar infrastructure and growth prospects – e.g., homes are perceived to be significantly undervalued,” he said.
This perception of value, combined with Atlanta’s status as a major business hub, makes it an attractive option for real estate investors.
Orlando, Florida
Orlando’s strong showing on the list likely stems from its robust tourism industry and growing tech sector. Wesser also explained that factors like population — whether it’s growing or shrinking — can have an impact on market value.
“Are people moving in or out of a market? What are their ages?” asked Wesser. “Look for markets where population growth is led by younger professionals and families,” he said.
Orlando’s ability to attract both young professionals and families, coupled with its strong job market, positions it well for real estate growth.
Dallas
The Dallas metro area rounds out the list of expected best performers in the South. Wesser identified Dallas as another city benefiting from job growth in the technology, manufacturing and banking sectors, highlighting its diverse economy and strong job market.
The city’s pro-business environment and lack of state income tax continue to attract both companies and individuals, driving up demand for real estate.
The Final Word
Wesser suggests a methodical approach to finding the right market for you. That means starting with a broad list of your target markets and including factors such as economic, population, demographic, infrastructure and housing supply and demand.
“Drop the data into a spreadsheet and sort high or low to create a list of markets having desirable (or undesirable) rankings for each factor,” he suggested. “Make a list of the cities that consistently rank high across multiple factors, as well as cities that consistently rank low across multiple factors, to arrive at your initial list of target markets.
“The secret sauce is how you interpret and test the data to draw conclusions,” shared Wesser.
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