"Jobs are the engine that drives real estate markets."
Although home prices have been rising briskly in many markets across the country, the prospects for investors in these markets can be quite different from market to market. This is especially true for investors in rental properties who need a longer-term perspective than those rehabbing and reselling.
Jobs are the engine that drives real estate markets. The lack of jobs growth and, in some cases, even the loss of jobs, has held home prices down in many markets across the country this year. On the other hand, markets that have added jobs have seen home prices and rents move higher.
The link between more jobs and higher home prices stems from the fact that builders can’t put up new housing fast enough. This makes “doubled up” markets where job growth and housing demand are on the rise particularly interesting to real estate investors.
Our list shows 10 markets where job growth in the past year was not just strong; it was even stronger than in the previous year.
This acceleration is an important point to consider because demand for homes tends to lag behind the actual creation of new jobs. This isn’t surprising. The holder of a new job doesn’t rush out and immediately buy a home – that happens later.
What the combination of job growth and housing demand implies for these 10 markets is that demand for homes in 2018 will be even stronger than it was in 2017, when it already was pretty good.
Are These Markets Overvalued?
Not for the most part. Note that with the exception of North Port-Bradenton and Riverside-San Bernardino, prices in these markets have a way to go before they get into over-priced territory.