5 Emerging Real Estate Markets to Invest in 2020

The US housing market 2020 seems to be in a relatively good spot despite the COVID-19 outbreak. Mortgage rates are at historic lows, home prices are stable, inventory is still limited, and demand for rental properties remains as strong as ever. However, we all know that success in the industry is all about finding the best cities to invest in real estate and avoiding the worst. And today, instead of investing in major markets like Los Angeles and New York City, savvy investors are heading to secondary markets. These markets are heating up thanks to job growth, population growth, and faster appreciation, making them the best places to buy rental property. In this article, we list the 5 best emerging real estate markets in the US and why owning rental property there is smart in 2020 and beyond.

Related: Secondary Market Heats Up As Housing Demand Rises

How to Identify Emerging Real Estate Markets

Before we discover the top emerging markets for investing in real estate, let’s first explain how to identify them. Typically, investors look for a number of factors or trends in any real estate market in order to determine whether or not it’s worth investing in. Key real estate market trends that’ll help you locate emerging or up-and-coming cities where rental properties are profitable include:

1. Growing job opportunities and employment rates that surpass the national average
2. A growing population that is forecast to continue growing
3. Future real estate development plans
4. Affordability (based on price to rent ratio)
5. Absorption rate

These trends indicate that home values are increasing and demand for rentals is strong. Thus, you can find good real estate investment opportunities, mainly cash flow properties that generate high rental yield and allow for equity growth. There are many cities across the US housing market where these trends exist. The emerging real estate markets mentioned here are those which you should focus on in 2020. In no particular order, these cities are:

1. Charlotte, NC
2. Jacksonville, FL
3. Boise, ID
4. Tucson, AZ
5. Huntsville, AL

Let’s go over each city’s real estate market trends and data to explain why they’re great for rental property investing in 2020 and beyond.

#1 Charlotte Real Estate Market

The Charlotte real estate market keeps emerging as one of the best places to buy rental property year after year. The city has a diverse economy that supports a strong job market growth which, in turn, attracts a lot of people to move to Charlotte for work. Given that home prices aren’t the most affordable here, the growth in economy and population will naturally lead to growing rental demand and, in turn, growing rental prices. This is easily seen by the high price to rent ratio of 23 as you can see from our data below. This tells us that not only is there a large pool or tenants, but that Charlotte rental properties ae profitable and generate a good monthly rental income.

Charlotte Housing Market Data

• Median Property Price: $426,797
• Price Per Square Foot: $208
• Average Days on Market: 71
• Traditional Rental Income: $1,539
• Price to Rent Ratio: 23
• Airbnb Rental Income: $2,172
• Average Airbnb Daily Rate: $124
• Airbnb Occupancy Rate: 50%

To start looking for and analyzing the best rental property for sale in Charlotte, click here.

#2 Jacksonville Real Estate Market

Located on the eastern coast of Florida, the Jacksonville real estate market just keeps on growing. In fact, its population has been steadily increasing at a rate of about 2% per year for many reasons. First off, house prices in Jacksonville are the most affordable on our list of emerging real estate markets. This, along with the low cost of living, makes it attractive not just for people to live there, but to invest there as well. In addition, 13 of Forbes Global 500 have operations in Jacksonville which explains why its workforce is growing at a consistent rate. Plus, market predictions show that future job growth in Jacksonville over the next 10 years is 39.2%! With these positive trends, it’s no wonder why you can find the best real estate investments in Jacksonville.

Related: 10 Best Job Markets to Invest in Real Estate in 2020

Jacksonville Housing Market Data

• Median Property Price: $279,637
• Price Per Square Foot: $149
• Average Days on Market: 87
• Traditional Rental Income: $1,291
• Price to Rent Ratio: 18
• Airbnb Rental Income: $2,165
• Average Airbnb Daily Rate: $119
• Airbnb Occupancy Rate: 56%

To start looking for and analyzing the best rental property for sale in Jacksonville, click here.

#3 Boise Real Estate Market

At the beginning of 2020, Realtor.com forecasted that Boise will be one of the hottest real estate markets of the year. And despite the initial slowdown due to COVID-19, the Boise real estate market is proving its strength. The demand for homes for sale in Boise quickly climbed back up in June – mainly due to low mortgage rates. Boise is also a growing city but, at the same time, the housing inventory here is still low. As a result, home prices have and will keep growing in 2020. Over the past year, Boise’s appreciation rate was higher than a whopping 98.9% of housing markets in the nation! Still, Boise rental properties are still considered affordable. This makes it one of the best places to invest in real estate for both cash flow and appreciation.

Boise Housing Market Data

• Median Property Price: $541,998
• Price Per Square Foot: $250
• Average Days on Market: 49
• Traditional Rental Income: $1,421
• Price to Rent Ratio: 31
• Airbnb Rental Income: $2,095
• Average Airbnb Daily Rate: $103
• Airbnb Occupancy Rate: 56%

To start looking for and analyzing the best investment property for sale in Boise, click here.

#4 Tucson Real Estate Market

The State of Arizona is home to some of the best places to buy rental property like Scottsdale and Phoenix. However, those are not the only markets worth investing in – one of the most profitable emerging real estate markets here is Tucson. Why is Tucson going to be hot this year? Like in many other housing markets across the US, extremely low inventory and high demand are affecting this market. Experts predict that home prices in Tucson will grow by 3.3% in 2020. Moreover, the city’s economy is wide and diversified and its population has seen great growth in the last few years. In addition, it’s the second-most affordable real estate market in our list. All of these trends suggest that competition for Tucson rental properties is likely going to be fierce in 2020.

For more details about the city, read: Tucson Housing Market 2020: Should You Invest?

Tucson Housing Market Data

• Median Property Price: $296,547
• Price Per Square Foot: $169
• Average Days on Market: 59
• Traditional Rental Income: $1,145
• Price to Rent Ratio: 21
• Airbnb Rental Income: $2,395
• Average Airbnb Daily Rate: $100
• Airbnb Occupancy Rate: 56%

To start looking for and analyzing the best investment property for sale in Tucson, click here.

#5 Huntsville Real Estate Market

The final city on our emerging real estate markets list for 2020 is Huntsville. It’s the 4^th largest city and the 2^nd most populated metro area in Alabama. The Huntsville real estate market is also one of those leading economic recovery in the nation. The market is fairly affordable according to our real estate data and it enjoys a strong rental demand for many reasons. Mainly, Huntsville enjoys a low unemployment rate and a rise in the population. An additional benefit of rental property investing in Huntsville is low property taxes – Alabama has the second-lowest property tax rate in the US! Huntsville real estate investors should be encouraged by these trends and consider buying rental property here as soon as possible.

Huntsville Housing Market Data

• Median Property Price: $383,630
• Price Per Square Foot: $141
• Average Days on Market: 59
• Traditional Rental Income: $1,865
• Price to Rent Ratio: 17
• Airbnb Rental Income: $1,854
• Average Airbnb Daily Rate: $146
• Airbnb Occupancy Rate: 61%

To start looking for and analyzing the best rental property for sale in Huntsville, click here.

Ready to Start Your Property Search?

Knowing where to invest in real estate is only the first step of your property search. Savvy real estate investors look for investment properties that not only provide positive cash flow, but a high ROI as well. Mashvisor’s software and tools make it easy to locate these properties in emerging real estate markets in 2020. When signing up with Mashvisor, you’ll be able to browse thousands of MLS and off-market listings in your city of choice. We make it easy to set your criteria to filter out unwanted properties to find the ones that best meet your goals. Moreover, we also simplify the process of analyzing real estate deals by providing you with a readily-estimated rental property analysis for every listing across the US. As a result, your investment property search will only take a matter of minutes to be complete!

Sign up for Mashvisor now with a 60% discount with promo code CORONA60 to access our tools and find and analyze the best rental properties for sale in your market of choice.