FROM THE CALIFORNIA BUSINESS JOURNAL NEWSWIRE
HomeUnion, an online real estate investment management firm based in Irvine, Calif., released its first Power Rankings of the top investment housing markets in the United States.
For the study, HomeUnion ranked 31 metros based on how well each single-family rental (SFR) market is anticipated to perform through year’s end. Investment markets, like football teams, can be viewed as having an offense, defense and special teams that are paramount to success.
Markets with strong demand drivers (employment, rent growth, turnover time) are described as having strong offenses. Defensively, key metrics that limit the threat of losing renters (rent-to-income ratio, apartment construction, single-family permits) were deemed favorable.
“We compared cap rates, one of the most important measures of an SFR’s performance from an investment perspective, to special teams, the talented players who take the field at important times during a football game – punting, kickoffs and last-second field goals,” says Steve Hovland, director of research for HomeUnion. “Markets with high cap rates at midyear were favored over markets with lower rates.”
Here’s a complete breakdown of each team’s key stats, which are the basis for HomeUnion’s Investment Housing Market Power Rankings:
Metro | Median SFR Sales Price 2Q 2016 | Median SFR Rent 2Q 2016 | Median Cap Rate 2Q 2016 | Power Ranking | |
Tampa Bay, FL | $126,700 | $1,285 | 6.7% | 1 | |
Jacksonville, FL | $127,500 | $1,186 | 6.0% | 2 | |
San Diego, CA | $475,000 | $2,344 | 3.2% | 3 | |
Dallas, TX | $166,800 | $1,431 | 5.8% | 4 | |
Atlanta, GA | $111,700 | $1,131 | 6.8% | 5 | |
Minneapolis/St. Paul, MN-WI | $173,000 | $1,393 | 5.4% | 6 | |
Chicago, IL | $157,000 | $1,411 | 5.9% | 7 | |
Pittsburgh, PA | $89,000 | $910 | 7.0% | 8 | |
Denver/Boulder, CO | $320,000 | $1,869 | 3.9% | 9 | |
Miami, FL | $210,000 | $1,851 | 5.8% | 10 | |
Philadelphia, PA-NJ-DE-MD | $150,000 | $1,418 | 6.3% | 11 | |
Cleveland, OH | $75,900 | $1,124 | 10.1% | 12 | |
Baltimore, MD | $190,200 | $1,581 | 5.4% | 13 | |
Oakland, CA | $495,000 | $2,532 | 3.4% | 14 | |
Charlotte, NC-SC | $123,500 | $1,056 | 5.9% | 15 | |
San Francisco, CA | $1,120,000 | $4,026 | 2.4% | 16 | |
New York, NY | $375,000 | $1,919 | 3.9% | 17 | |
Indianapolis, IN | $95,700 | $1,006 | 7.1% | 18 | |
Los Angeles, CA | $535,500 | $2,458 | 3.0% | 19 | |
Detroit, MI | $155,000 | $1,230 | 5.5% | 20 | |
Phoenix, AZ | $176,000 | $1,247 | 4.7% | 21 | |
Boston, MA-NH | $291,000 | $1,987 | 4.3% | 22 | |
Buffalo, NY | $120,000 | $1,296 | 7.2% | 23 | |
Washington, DC-VA-MD | $300,000 | $1,876 | 4.1% | 24 | |
Cincinnati, OH-KY-IN | $90,200 | $1,116 | 7.7% | 25 | |
Nashville, TN | $145,000 | $1,215 | 5.6% | 26 | |
Kansas City, MO-KS | $95,100 | $881 | 6.4% | 27 | |
Houston, TX | $165,300 | $1,498 | 6.2% | 28 | |
Seattle, WA | $425,000 | $1,999 | 3.2% | 29 | |
New Orleans, LA | $118,400 | $826 | 4.9% | 30 | |
Milwaukee, WI | $131,000 | $908 | 4.9% | 31 | |
Sources: HomeUnion Research Services, Bureau of Labor Statistics, MPF Research, a division of RealPage, U.S Census Bureau |
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