As the real estate sector’s recovery from the brutal 2008 recession continues to mature (we’re about six years into it already), the eyes of Real Estate IRA investors have turned to ‘emerging’ housing markets as residential real estate leaders. These markets are 2nd and 3rd tier American cities not thought of as huge national cultural centers, but which are benefiting tremendously from new industries, technology, a new class of computer-savvy workers, and an increasing fragmentation of many ‘clean and green’ industries that allows workers to find prosperity – without having to move to New York or Los Angeles to do it.
We’ve mentioned that in recent blog posts. But our own writing is confirmed by the most recent 2015 Emerging Trends In Real Estate study – a joint publication of Price Waterhouse Coopers and the Urban Land Institute.
According to the study, Houston, Texas, occupies the top spot in their U.S. Markets to Watch section, citing solid and expanding technology and energy industry industry (Enron’s spectacular collapse was almost 15 years ago now!). The study also notes that employment in Houston is expanding at over twice the national rate (4.3 percent to 2 percent). That’s tremendously attractive for young and tech savvy professionals, as well as young blue-collar workers with increasingly sought after energy industry skills.
Houston also has lots to recommend it as a center of culture and recreation, tons of incredible restaurants.
Texas actually boasts the two top cities in the U.S. Markets to Watch list. Austin is the state capital, of course, and if it’s not the cultural capital of the state, it is a least the counter-cultural center. They’ve built a thriving technology industry there, nestled on top of a long-established hotbed of music and the arts. Austin has long boasted many of the best musicians in the Southland, perhaps second only to Nashville in its cultural draw for regional musicians. As a result, millennials are flocking to the city and building a solid demographic foundation for prosperity for years to come.
The urban area is booming with 8.6 percent growth over the past 12 months.
The Golden Gate City ranks third on the Cities to Watch List. In our view, the market is hampered by an already elevated price level, high taxes, a stubborn water shortage, and a potentially disastrous pension crisis hanging over the state. But investors are compensated by continued gentrification of wide swathes of the city, an immense and growing nearby technology industry, the presence of Apple right down the street and Silicon Valley right down the highway, and several world-class colleges. Plus it’s one of the most beautiful areas to live in the world, and for all the challenges, that’s not changing. It’s a first-rate cultural center and a first-tier gateway city with a lot of room for growth ahead of it. If you can handle the price level and the taxes, this is a great spot for Real Estate IRA investing.
The Mile High City offers the best of inland charm and recreation, with solid demand for single-family housing. It has a big population of millennials, who demographically speaking should be looking to move up in house very soon. About a quarter of a million people in the Generation Y age group will be looking to purchase their starter homes or family homes in the next few years. This is an opportunity for forward looking Real Estate IRA investors to get ahead of that demand – in one of the loveliest cities in the country.
Lots of people don’t know this but the largest urban arts district in the country isn’t in New York or Los Angeles or Chicago, but in Dallas. It’s also a notoriously business friendly area, and this reputation has fueled and will likely continue to fuel expansion for many years to come. The city also benefits from strong Texas oil revenues and an affordable cost of living. It’s a great city for recreation and for making your Real Estate IRA income go a long way.
The Texas Advantage
It’s no accident that three of the top five cities in the country, as cited by the 2015 Trends in Real Estate report, are in Texas. Finally, owners of Self-Directed IRAs and Real Estate IRAs should take note: Texas is a great spot for real estate owners (relatively high property tax rates notwithstanding) and retirees alike. Why? Modest cost of living, combined with no state income tax.
Here are the cities rounding out the top 20 markets, according to the report authors:
- Los Angeles
- Orange County
- New York/Manhattan
- San Jose
- Portland, Oregon
- Oakland/East Bay
- San Diego
American IRA, LLC specializes in Real Estate IRAs and other forms of self-directed retirement account investing. Our offices are in North Carolina, but we work with successful investors in Texas, Colorado, California and everywhere else in the country. To learn more, visit us at www.AmericanIRA.com, or call us at 866-7500-IRA(472).