Realtor.com® Unveils the Top Markets for Real Estate Investors
Dayton, Ohio; Rochester, N.Y.; Cleveland, Ohio; Pittsburgh, Pa.; and Knoxville, Tenn., markets lead the top 5, offering strong returns from lower prices and steady demand
SANTA CLARA, Calif., Oct. 1, 2024 /PRNewswire/ -- Amid rising home prices and mortgage rates, savvy real estate investors can still find hidden gems in affordable metros across the country, with Dayton, Ohio, standing out as the top destination for property investment this year. Realtor.com® today unveiled a list of the top U.S. markets for real estate investment, showcasing opportunities for would-be investors in less obvious but highly promising markets, with the spotlight shining brightly on the Midwest and Northeast regions.
The top 10 in rank order include: Dayton, Ohio; Rochester, N.Y.; Cleveland-Elyria, Ohio; Pittsburgh, Pa; Knoxville, Tenn.; Albany-Schenectady-Troy, N.Y.; New Haven-Milford, Conn.; Buffalo-Cheektowaga, N.Y.; Grand Rapids-Kentwood, Mich.; and Columbus, Ohio.
"For buyers interested in investing in rental properties or other real estate, it's key to know which areas are both affordable and in high demand to be able to capitalize on any investment opportunities, especially with today's higher prices and rates," said Danielle Hale, chief economist at Realtor.com®. "With low vacancy rates and strong demand, the markets we've highlighted as top markets for investment opportunity offer a great mix of affordability and growth potential. These spots give aspiring investors a chance to tap into long-term growth and set themselves up for solid returns as the market shifts."
The top markets for real estate investment are noted for their affordability, low rental vacancy rates, rising rents and sustained buyer demand, making them prime candidates for investment. Realtor.com® research indicates that these markets saw nearly double (1.95x) the average page views per property compared to the national trends, with home prices an average of 21.7% lower than the national average, offering compelling value for investors.
Rental vacancy rates in these hotspots averaged just 4.8% so far in 2024, well below the national average of 6.6%, signaling a strong rental market with minimal property turnover. Furthermore, 13.8% of buyers in these markets were investors in Q1 2024, 1 percentage point below the national average, but up 4.4 percentage points from 2019 levels, reflecting a growing trend of real estate investment since pre-pandemic levels despite economic challenges.
Dayton, Ohio reigns supreme as the top investment hotspot
Dayton, Ohio topped the list for investment opportunity with its below-average home prices and robust demand, boasting a low 4.7% rental vacancy rate in early 2024. Investor activity has picked up over the past five years, with 13.7% of buyers in the first quarter being investors, just shy of the national average.
Other Midwest metros, such as Cleveland, Ohio; Pittsburgh, Penn.; and Grand Rapids, Mich. also offer strong returns for investors, thanks to their low prices and steady demand. Climbing home prices in these markets reflect sustained buyer interest, while relatively low home prices mean the typical monthly mortgage payment is lower than the U.S. average.
"As the rental market eases in many areas, the Midwest and Northeast stand out for their combination of affordability and stability," said Hannah Jones, Realtor.com® senior economic research analyst. "These regions offer investors a prime chance to secure steady rental income and tap into growing demand, making them attractive for both seasoned and first-time investors alike."
While Midwest and Northeast lead, South and West also hold opportunities
While the South and West have historically been popular regions for investors, recent affordability challenges and rising inventories have shifted focus to the more stable, growth-ready markets in the Midwest and Northeast, and only a handful of markets from the South and West made the list. Knoxville, Tenn., is the sole Southern city to make the list, while Fresno, Calif., and Albuquerque, N.M., stand out in the West as top investment spots for their notable demand and price growth, despite their higher home prices.
Top Investor Markets
Market Rank | Geo Name | Region | Average | Median | Median | Property | Rental | 2024Q1 | Typical |
USA | USA | 1 | $427,000 | 0.4 % | 9.7 % | 6.6 % | 14.8 % | $2,100 | |
1 | Dayton, Ohio | Midwest | 2.09 | $239,000 | 6.7 % | 5.7 % | 4.7 % | 13.7 % | $1,200 |
2 | Rochester, N.Y. | Northeast | 2.93 | $265,000 | 9.5 % | -5.2 % | 4.5 % | 14.7 % | $1,300 |
3 | Cleveland-Elyria, Ohio | Midwest | 1.97 | $241,000 | 12.0 % | -9.4 % | 4.3 % | 17.4 % | $1,200 |
4 | Pittsburgh, Pa. | Midwest | 1.47 | $246,000 | 10.9 % | 0.9 % | 6.3 % | 13.7 % | $1,200 |
5 | Knoxville, Tenn. | South | 1.71 | $469,000 | 5.4 % | 23.8 % | 4.0 % | 14.0 % | $2,300 |
6 | Albany-Schenectady-Troy, N.Y. | Northeast | 1.47 | $424,000 | 14.2 % | -6.6 % | 3.1 % | 12.4 % | $2,100 |
7 | New Haven-Milford, Conn. | Northeast | 2.60 | $408,000 | 7.8 % | -13.4 % | 2.4 % | 13.6 % | $2,000 |
8 | Buffalo- Cheektowaga, N.Y. | Northeast | 1.62 | $266,000 | 9.0 % | -2.0 % | 8.1 % | 11.8 % | $1,300 |
9 | Grand Rapids-Kentwood, Mich. | Midwest | 1.28 | $409,000 | 6.3 % | -3.0 % | 3.8 % | 7.1 % | $2,000 |
10 | Columbus, Ohio | Midwest | 2.39 | $381,000 | 6.6 % | 7.6 % | 7.1 % | 19.4 % | $1,900 |
25 | Fresno, Calif. | West | 1.15 | $460,000 | 5.3 % | -7.7 % | 3.9 % | 19.5 % | $2,300 |
33 | Albuquerque, N.M. | West | 1.04 | $409,000 | 4.3 % | 12.5 % | 7.7 % | 10.7 % | $2,000 |
Note: Fresno, Calif. and Albuquerque, N.M. included to represent the top-ranking metros in the Western region. |
Methodology
The report analyzed Realtor.com® listing data and public data for the 75 largest U.S. metros. It used the 12-month average of listing prices, views per property, and housing stock, along with 2024 Q1 and Q2 vacancy data, to identify the top markets for real estate investment. The best markets were determined by a combination of high listing viewership, low home prices, significant price growth, growing inventory, and low rental vacancy rates.
About Realtor.com®
Realtor.com® is an open real estate marketplace built for everyone. Realtor.com® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today's on-demand world. Realtor.com® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com®.
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SOURCE Realtor.com