Top 10 Potential U.S. Real Estate Metropolitan Areas in 2023 | U.S. Real Estate | U.S. Real Estate | Potential Real Estate Market

[The Epoch Times, December 26, 2022]In this episode, we continue to discuss the US real estate trends in 2023 and see which places will have more development potential in the new year. Although the overall housing market is entering a recession, some places may experience a more pronounced decline, but some places may be more supportive of the local housing market because of factors such as affordable housing prices, more job opportunities, and high population growth.

The US real estate trend in 2023. In the last video, we analyzed interest rates, real estate, buyers and sellers, economy and international situation, etc., and friends who are interested can go to take a look. But this time we are going to find out which metropolitan areas in the United States may have more potential for the development of the housing market in 2023, and may be more targeted to everyone. This report is researched by the National Association of Realtors. Based on the top ten data, they find out the top ten potential real estate markets in the United States.

Top 10 Data to Evaluate Top 10 Potential Housing Markets

So what are the top ten data? The first data is to see whether the local housing affordability is better than the national data. Since housing prices started to soar two years ago, housing prices in the United States have risen by more than 40%, and after March 2022, mortgage interest rates have also begun to rise, so for buyers, buying a house seems to be more and more expensive , affordability is increasingly challenging. Therefore, the Housing Affordability Index (Housing Affordability Index) became the first indicator measured.

The second data is to see how many local renters who can afford the median house price are more than the national level. Homeownership rates depend on the ability of renters to become homeowners. Assuming a down payment of 10% for the local median house price, how many renters can afford it? Of course, the higher the better, the current ratio in the United States is 15.1%. Therefore, these metropolitan areas in the top ten basically exceed this percentage.

The third data is to compare the employment growth rate. This data looks at the employment growth rate from October 2021 to October 2022. The national figure is 3.4%. Of course, the higher the percentage, the better. With good employment performance, there will be greater protection for the support of the real estate market. On the contrary, once more and more people lose their jobs and cannot afford mortgages, it will have a great destructive force on the market.

The fourth is to look at the employment growth rate of the technology industry, which is also compared from October 2021 to October 2022. Because the technology industry is often the group with the highest salary, as long as there are more high-tech jobs in the local area, it will drive the buying momentum of the housing market and support the market. The national growth rate of this data is 5.4%.

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The fifth is to compare the proportion of technology industry in local GDP. In other words, the larger the development scale of the technology industry in the local area, the more wealthy people there are, and the more beneficial it is to the local housing market. In the national GDP, the science and technology industry accounts for 6.1% of the proportion.

The sixth is to look at the changes in population immigration, and compare the population changes from January to September this year. Of course, there is no data for the whole United States in this part, because the comparison is the population migration in the United States, and the population movement in various places is looked at. Therefore, getting more and more people to immigrate also means that it is more beneficial to the housing market.

The seventh is the change driven by the epidemic-the proportion of people working remotely. If an area has more affordable housing and a lot of remote jobs available, that’s bound to attract a lot of people. However, if many people in areas with expensive housing prices relocate to cheaper places because of remote work, this will hurt the local housing market. Therefore, this data has both good and bad sides, which need to be looked at in detail. Nationally, 17.9 percent of employees work remotely.

The eighth is to look at the population growth rate from 2020 to 2021. Needless to say, the higher the data, the better. This year’s population growth rate in the United States is 0.1%.

The ninth is to look at the number of properties available for sale, how much it will increase from October 2021 to October 2022. The greater the increase, the more properties buyers can choose from, and the more attractive they are to buyers. The change in the United States is an increase of 33.5%.

The tenth look is whether the housing shortage is lower than in the United States. This figure measures how many new jobs are created to obtain a building permit for a new home. The country needs 5 new jobs to obtain one, so the lower the number, the better, which means that there will be more new houses in the market, solving the problem of housing shortage in the market.

10th in Knoxville, Tennessee

Knoxville, Tennessee. (Shutterstock)

The above ten data are used to evaluate which metropolitan areas are enough to be selected as the list of the top ten most potential housing markets in 2023. So according to the comparison of these data, the tenth place is Knoxville, Tennessee. Mainly, it has a good housing affordability index and a fast-growing job market, which is the main reason why the Knoxville metropolitan area attracts many movers from California. Home prices in the area are about 10 percent below the national average, and nearly a quarter of renters can afford the median home price. However, the difference is that Knoxville did not develop a high-tech industry, so it almost won by more affordable housing and a better job market. In addition, its population growth of 1.3% is also higher than that of the whole United States.

No. 9 in San Antonio, Texas

In ninth place is the San Antonio-New Braunfels metro area in Texas. Texas is known for its tax incentives, but San Antonio is more affordable than the rest of Texas, with an eligible income of about $85,000 to buy a median home price, and 27 percent of renters can buy a typical property; in Austin, Texas, the income is 13 Ten thousand U.S. dollars. And, with more and more technology workers pouring into San Antonio, it is expected to perform even better in 2023.

Jacksonville, Florida. (Shutterstock)

The eighth place is Jacksonville, Florida. Florida is often the first choice for movers, but Jacksonville is a more affordable place in Florida. The qualifying income to buy the median house price in Jacksonville is about $98,000, but in Miami is as high as 140,000. In addition, the population here has increased by 1.6%, ranking third in the top ten. Also, it takes only 2.4 new jobs to get a building permit for a single house, providing more new listings in the market.

No. 7 in Huntsville, Alabama

The seventh place is Huntsville, Alabama, which is the most affordable place among the top 10 metropolitan areas, with an affordability index as high as 120, compared with 91.2 nationwide. The qualifying income to buy a median home here is just $80,300, and the typical household earns 20% more than qualifying income. It ranks among the top for population migration and growth; it even ranks first for growth in available properties for sale and building permits for single-family houses.

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6th in Charleston, South Carolina

In sixth place is the Charleston-North Charleston metropolitan area in South Carolina, where the typical household income is about 10 percent below the qualifying income for the median home price, but the job market is growing. ranked first, while population migration ranked second. In addition, the number of high-tech employment has increased by 6.8%, bringing dividends to the local housing market.

5th in Greenville, South Carolina

The fifth place is the Greenville-Anderson-Mauldin (Greenville-Anderson-Mauldin) metropolitan area, also located in South Carolina, which is somewhat similar to Charleston, thanks to job growth and rapid increase in high-tech employment, In addition, it also performed well in terms of affordability, population growth, and housing supply.

4th in Fayetteville, Arkansas

The fourth place is the Fayetteville-Springdale-Rogers (Fayetteville-Springdale-Rogers) metropolitan area on the border of Arkansas and Missouri. Its housing affordability is quite good, as high as 34% of renters. Able to buy typical real estate, and high-tech employment growth of 10%, ranking second; population growth of up to 2%, ranking first. Also, it only takes 2.3 new jobs to get a single house building permit.

3rd in Dallas, Texas

The third place is the Dallas-Fort Worth-Arlington (Dallas-Fort Worth-Arlington) metropolitan area in Texas, where more and more technology employees are pouring in, and it has become another new technology center in the United States, so there are many of start-ups choose to do business here, and 20.7% of remote workers here. At the same time, there are 111% more available listings on the market than in 2021, bringing more choices to homebuyers.

2nd Place in Raleigh, North Carolina

The second place is Raleigh, North Carolina, which is not too surprising, because this is an emerging city that is often heard during the hot housing market. It has many interesting data, including population growth, population immigration and Remote work ranks first. In addition, the proportion of the high-tech industry is as high as 7.9%, and the increase of available houses for sale is 167%. It is a pity that high-tech employment increased by 2.9%, which was lower than the 5.4% increase in the United States.

No. 1 is Atlanta, Georgia

The final No. 1 is the Atlanta-Sandy Springs-Marietta metropolitan area in Georgia, which has a reason for being the champion, most importantly because of its higher employment situation than others. The metropolitan area, and the focus is on the booming high-tech here, accounting for 11% of the local GDP, and tech employment growth of 11.2%, are the best data. It also ranks third for affordability, second for migration, and second for remote work. Only new housing construction permits require 5.6 jobs, more than the national data.

The above are the top ten metropolitan areas with potential real estate market in 2023. From the location of the metropolitan area, we can find that these places are all located in the sun belt or the edge of the sun belt in the southern region. The most important measurement data are employment and housing affordability sex. As demand is held back by interest rates and housing supply is clamped down by the supply chain, lower demand also keeps housing starts below the historical average of 1.5 million units, suggesting that inventories will remain tight, putting upward pressure on housing prices.

While we’ve seen inflation come down now, the next step for the Fed may be to slow down the pace of rate hikes rather than stop them, so while mortgage rates have come down in recent weeks, further declines aren’t certain yet, and As more and more signals of economic recession and layoffs appear, we have to maintain a more cautious observation attitude towards the US real estate market in 2023. ◇

Responsible editor: Li Yaoyu

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