Wednesday, June 16, 2021 / by Jay Lesko
The recent post-pandemic property boom has seen mortgage interest rates fall to their lowest in nearly a decade. Researchers are in fact pointing to a new global crisis in housing affordability which means that Americans are not facing this issue alone, albeit that the problem is somewhat intense in the US. This is not about tricks individual home owners pull to increase their property value, but about a real trend that has gripped the US - to the extent that real estate outperformed numerous sectors in Q1 2021.
While families and wealthier individuals are looking to leave behind overcrowded cities, and moving abroad still not looking to become reality in the next year, what are some of the best US cities for real estate investment?
Although popular cities such as D.C., L.A., Miami, San Francisco, and Seattle have remained popular choices to relocate to. Several demographic changes in real estate investment have influenced how people are purchasing and renting new homes. Some of the key factors that influence the change in recent real estate trends stretch across the board. From increased crime rates in New York, natural disasters in Florida, and the work-from-home environment - people are looking to settle in areas that can offer them a better lifestyle and a more affordable cost of living.
What are the best cities for property investment in 2021?
Depending on where you want to relocate to, looking at factors such as employment, local property trends, interest rates, valuations, cap rates, and inventory is imperative to finding the most suitable investment opportunity. As more and more families are leaving the big city, investing in low-cost areas can be more lucrative.
The pandemic has seen Denver enter a property boom, coming from all angles. Both commercial and residential property has been growing, and home values have increased 7.3% in recent months. Purchasing a home in Denver means that owners will have better job opportunities, and as the population steadily grows, younger and more affluent individuals are making this city their new home.
Las Vegas, Nevada
People are migrating from the West Coast inland to Las Vegas, as the small, but the busy city now offers some of the best cost of living. More so, the zero percent income tax in Nevada is seeing larger corporations and tech giants relocating offices to the area. Property value has increased by 15.9% since 2020, and rental yields currently stand at 5.3%. As LA becomes overcrowded, and as drought seasons become longer, families are now fleeing to Sin City.
Far north, where the Delaware Bay and the Atlantic Ocean meet, the small city of Lewes has become the top choice for many property investors and wealthier individuals looking to move out of Washington D.C. and New York City. Lewes, Delaware homes for sale have increased in the first and second quarter of 2021, with home appreciation levels up 3.7%. More so, Lewes offers an above-average (US average) cost of living and property investment. The tight-knit community of Lewes is offering affluent families a chance to restart, but also increase property values for future sales and rental.
Lewes, DE vs Miami, FL - which is better?
Comparing these two cities against each other isn’t easy, as both offer some of the best property investment opportunities, public services, beaches, jobs, and neighborhoods. Although Miami has seen an increase in recent natural disasters and hurricanes, it remains one of the most popular choices for individuals looking to retire or relocate from the city.
Pros and Cons of Lewes, DE.
Low income and state property taxes, for working and retired individuals.
A host of better job opportunities.
Diverse and progressive education opportunities.
High cost of living compared to the US average (151.3 points compared to the US average of 100 points).
Property size can vary but remain relatively smaller than in other areas of Delaware.
Limited public transportation and airports.
Pros and Cons of Miami, FL:
A lot of great new job opportunities.
More advanced health care systems are coming into place.
The booming property market, in South Florida, both residential and commercial.
Miami is prone to more natural disasters and hurricanes year-round.
As more people move down, the city will soon become overcrowded.
Some areas such as Wynwood, Coconut Grove, and Upper Eastside are experiencing higher crime rates.
Why has Lewes, DE become so popular in recent years?
Not just for retirees, but families and other wealthy individuals feel that the small community of Lewes can offer them a more balanced lifestyle than in other places. As the overall city's popular growth increased by 5.5%, and real estate prices spiked, many inhabitants are seeing the city gaining new life in recent years. Don’t forget about Ocean City, MD, which is still a popular holiday and property investment hotspot. According to Jay Lesko, realtor and owner of Iron Valley at the Beach, there are ‘146 Blocks, size of Delaware Coast, better value, homes close to the beach.’ Property values are still soaring in the area, and families are looking to call Ocean City their new home.
Although its current unemployment rate stands at 6.6%, above the US average of 5.5% as of May 2021, there are still a lot of innovations being introduced to help revive the city landscape. Above all, its relaxed environment, and lucrative property options have now made it one of the best places to live for many people in the north, and east coast.
There are numerous other US cities that are popular for a variety of reasons. The key fundamentals in support of the overall market, are continuous population growth and off course the fact that we’re still the largest economy in the world.