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3 Most Attractive Cities in the Southeast for Real Estate Investing

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  • Real estate investment platform Cadre has identified the most valuable locations to invest in today.
  • Founder Ryan Williams has described these Southeastern cities as “good for business” and “affordable.”
  • Insider took a particular look at the top three metropolitan areas investing in multifamily housing.

Institutional money seemed to make a big wave in residential real estate last year, setting new quarterly records house purchased by an investor versus ordinary individuals. one year ago, Some of the most popular locations for investors Southern cities such as Atlanta, Charlotte, and Jacksonville were included. And evidence suggests that this investment trend in the southern United States remains strong.

In a recently released report from real estate investment platform Cadre, the company found the most valuable assets for institutional investors today by comparing several key metrics such as year-over-year rent growth, occupancy rates and median real estate prices. We have identified a location (the so-called MVP) where variables such as values. Cadre has selected MVPs for three different asset classes: Multifamily, Office and Industrial. The company also named several selected cities the “Triple Crown.” This is the metro area that made it onto all three MVP lists.

All three cities with the Triple Crown designation are located in the Southeast. Raleigh, North Carolina. Charlotte, North Carolina. and Nashville, Tennessee.

When reviewing the data, Insider focused specifically on metropolitan areas that are good candidates for multifamily home investment. This is what Cadre defines as his larger buildings with more than 50 residential units. Southeastern cities dominated Cadre’s Multifamily MVP list, accounting for 9 of the 15 selected markets.

Ryan Williams, founder of Cadre’s Global Investment Committee, says these Southern cities have three big similarities. New York, San Francisco, Boston, etc. And each of these markets has seen significant population growth. “

It also has low tax rates and good infrastructure, he added.

Raleigh, Charlotte, Nashville

Raleigh, Charlotte and Nashville are among the fastest growing cities for industrial, commercial and multifamily real estate, according to Williams.

For multifamily properties, Cadre said in a recent report, the company is “bullish in a market with permanent employment and population growth, where apartment rents are more affordable than homeownership prices.” That’s what I mean.

These fundamentals, he suggests, are what make these three big cities strong candidates for continued investment in various asset classes, especially residential real estate, over the next few years. Variables that make cities like Raleigh, Charlotte and Nashville less susceptible to similar mini-booms and busts seen in other hot pandemic-era markets are having diversified economies and local universities (Take Boise for example), investment and house prices rose dramatically and fell sharply as well.

“There are other markets that have had pandemic booms, but they’re going to recede,” Williams said of some areas that have been particularly hot over the past two years.[In cities that were] Due to the oversupply of housing, caution should be exercised when investing in terms of multifamily housing. We may not be able to generate enough stable cash flow or rental income to meet the new reality and debt service aspects. “

Williams said his firm isn’t just in Charlotte, Raleigh and Nashville, but the majority of Cadre’s real estate assets are in the MVP cities highlighted in the report.

For 15 cities, including Atlanta, Austin, Boston, Dallas, Denver, Las Vegas, Miami, Orlando, Phoenix, San Diego, Tampa and Washington, “We spend about 80% of our time sourcing in these markets. , in addition to the three Triple Crown cities.”But the most important metric we’re looking at is growth.”

in numbers

Median home sales prices are rising across the board in all three of the Triple Crown cities.

The median home price was $397,000 in September, up 9% from last year, according to Raleigh data. redfin, condos, single family homes, townhouses and co-ops.Raleigh house prices, per Giraud, The median price was $451,332 as of September 30, up 20.2% year-over-year.

The median selling price for Charlotte in September was $385,000, up 13.2% from last year. redfin. according to JiroHowever, the price was slightly higher at $400,662 as of Sept. 30, up 20.2% over the same timeframe.

Elsewhere, Nashville’s September median sales price was $449,000, an 18.1% year-over-year growth rate. redfin. The average price in this area is $458,485. Jiroup 25.4% year-on-year.

From an institutional perspective, acquiring multifamily homes with strong tourism and service industries in southern cities like Nashville, or in Savannah, Georgia, where Cadoré owns a hotel, is a trend that people tend to spend is a particularly attractive proposition in a post-pandemic world where More money for experiences and travel.

“There’s a big boom in markets like drive-thru leisure facilities,” he explained. “And we think it will continue, especially as people tend to shift their spending from goods to services.”

Going forward, it will be more important than ever to invest in the right places, Williams said. Debt, given where the interest rate is. “

He explained that a market without strong demand or growth, or a market with oversupply, would make it difficult for property owners to maintain occupancy and cash flow.

For markets with limited supply and significant demand, including Cadre’s MVP, “I think we’re going to see pretty significant investment prospects,” he said.

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