During this year, it has been difficult to figure out which local markets have the best potential for real estate investors. The pandemic not only cut growth in all markets but also changed how the economy is structured. Some sectors, like healthcare, government, and restaurants, seem to have lost jobs for good. Construction and finance quickly rebounded because of a surge in home prices (and will benefit greatly from infrastructure spending). The retail sector was pushed to lean more on online sales.
The fallout from these changes, and others we can’t even identify yet, will be felt in changing levels of job growth and therefore changing demand for housing in many markets.
The dust hasn’t settled yet, but we’re getting a clearer picture of which markets are most likely to have solid growth by tracking the growth of jobs in the business services sector. These are outside services that every business needs: from CPAs and temporary receptionists to computer engineering and office cleaning. Together they’re only 15 percent of all jobs but are a reliable indicator of local business activity.
Nationally, business services jobs were up a sharp two percent in October, compared to the pre-pandemic level. Here are 10 markets with the strongest increase. There may be other reasons to wonder about investing there right now, such as sky-high prices, but as we emerge from the pandemic into a changed economy, these markets are clear bets for good growth.
Our Investors Metro Analysis shows the opportunity and risk in 200 local real estate markets at www.LocalMarketMonitor.com. Including the Best Rent Range in all local zip codes.
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