Looking to make a big investment in 2016? According to Forbes, you’re in the right place. In an annual report, the magazine names San Antonio the No. 3 "best buy city" for 2016.
Forbes teamed up with Local Market Monitor, a data company that tracks home prices and economic factors in over 300 housing markets, to determine the top 20 American cities that promise a healthy real estate market to invest in this year.
While these places are great for people looking to put their money into rental properties, it doesn’t bode well for first-time homebuyers in the low- and middle-income bracket due to high housing costs. Even so, these cities are where aspiring homeowners have the best opportunity to make an economically sound purchase, according to Forbes.
Up from its No. 6 spot in 2015, San Antonio places in the top three due to these main factors: healthy job growth (3.7 percent annually), strong population growth (6.1 percent from 2011 to 2014), and anticipated home price appreciation (8 percent annually).
According to the report, San Antonio’s housing market is also undervalued by 9 percent, which was determined by looking at local income and housing prices, and bodes well for investment. When there’s a stable relationship between local home prices and local salaries, there’s likely to be a better return on investment.
Texas has the second-greatest number of cities on Forbes’ list, behind Florida. In addition to San Antonio, where homes average $201,000, two other Lone Star State cities make the cut. Dallas comes in at No. 6, where home prices average $211,000, while Austin places at No. 7 with an average home price of $281,000. Forbes points to San Antonio’s high number of financial firms and data centers; Austin's growth in the high tech sector; and Dallas' welcoming of the relocation of major corporations Toyota, State Farm Insurance, and Liberty Mutual Insurance as boosting each metro area's individual ranking.
Ingo Winzer, founder and president of Local Market Monitor, predicts that it will be a while before Texas prices reach the point where these cities will no longer be a good investment. This marker, he estimates, is overpriced housing by about 20 percent, which is a nice indication for San Antonio, whose current under priced calculation sits at 9 percent.
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