2021 is a very attractive year to buy real estate in America because mortgage rats have plummeted due the flight to bonds. Further, President Biden is pumping as much stimulus into the economy as possible. Let's look at the hottest housing markets for younger buyers today.
Buyers for 2021 and beyond need to focus on choice locations with strong job markets. Further, a good idea is to focus on well-priced homes trading at reasonable valuations. The coastal city real estate markets like New York and Seattle are expensive. But they are also very strong due to job growth.
Hottest Housing Markets For Younger Buyers
Data from Realtor.com’s 2020 top 10 markets report found that certain cities throughout the country are getting a record number of mortgage applications from millennials. Additionally, the markets are becoming a hotbed for job growth and new construction.
“These markets are millennial magnets with bustling economies, affordable housing for today’s standards, and an overall high quality of life,” Danielle Hale, chief economist at Realtor.com, said.
This year’s top markets include Lakeland, Florida, Grand Rapids, Michigan, El Paso, Texas, and Chattanooga, Tennessee. Realtor.com said millennials, in particular, have the strongest hold in these markets, taking out up to 49 percent of mortgages for these areas.
Invest In The Heartland Of America
In other words, my investment thesis of investing in the Heartland Of America due to lower valuations, growing remote work, and technology is coming true. I believe investing in the heartland of America is a multi-decade long trend that will make savvy investors looking to arbitrage real estate valuations across the country very rich.
Homes in these markets are all expected to have higher price growth in 2020 than the national average. Lakeland, Florida, topped this year’s list due to its low median forecasted price for a home, which is roughly $100,000 cheaper than the national average, coming in at $161,757.
Grand Rapids, Michigan, which has been nicknamed Beer City, USA due to its plethora of microbreweries, came in second on the list for its reputation as a “fun place” with top schools and affordable housing. According to Realtor.com, homes are selling in 52 days.
The Top 10 Hottest Housing Markets For Younger Buyers
Post-pandemic, here are the 10 hottest housing markets for younger buyers. These housing markets are more affordable and have good job growth numbers.
1. Lakeland, Florida Percentage of millennial mortgage takers: 32
2. Grand Rapids, Michigan Percentage of millennial mortgage takers: 48.8
3. El Paso, Texas Percentage of millennial mortgage takers: 45.7
4. Chattanooga, Tennessee Percentage of millennial mortgage takers: 43.9
5. Phoenix, Arizona Percentage of millennial mortgage takers: 31.9
6. Bridgeport, Connecticut Percentage of millennial mortgage takers: 33.8
7. Las Vegas, Nevada Percentage of millennial mortgage takers: 30
8. Boise City, Idaho Percentage of millennial mortgage takers: 32.4
9. Miami, Florida Percentage of millennial mortgage takers: 29.9
10. Boston, Massachusetts Percentage of millennial mortgage takers: 41.8
I did some further research on the best cities to buy real estate based on demographic trends, job growth, and taxes as well for the new decade.
Invest On The Best Platforms
It used to be hard as a real estate investor to take advantage of different real estate markets across the country. Flying everywhere and kicking sheetrock is an inefficient use of time.
Thankfully today, with real estate crowdfunding, you don’t need to risk $100,000 or more to invest in commercial real estate. Instead, you can invest as little as $1,000 and be much better diversified.
Local real estate developers who know the market are vetted onto the platform and bring deals that they think are attractive along with the real estate crowdfunding platform for all to invest.
The best real estate crowdfunding platforms today are:
1) CrowdStreet, founded in 2014 and primarily for accredited investors. CrowdStreet is focused on secondary cities with higher cap rates, lower valuations, and potentially higher growth rates due to demographic changes. The platform is free to sign up and explore. You can build your own select real estate portfolio with CrowdStreet. I like how CrowdStreet focuses on real estate opportunities in 18-hour cities.
2) Fundrise, founded in 2012 and available for accredited investors and non-accredited investors. I’ve worked with Fundrise since the beginning, and they’ve consistently impressed me with their innovation. They are pioneers of the eREIT product. Most recently, they were the first ones to launch an Opportunity Fund in the real estate crowdfunding space to take advantage of new tax laws.
Both of these platforms are the oldest and largest real estate crowdfunding platforms today. They have the best marketplaces and the strongest underwriting of deals. I have personally invested $810,000 in real estate crowdfunding to diversify and earn income passively.
About the Author: Sam started Financial Samurai in 2009 as a way to make sense of the financial crisis. He proceeded to spend the next 13 years after attending The College of William & Mary and UC Berkeley for b-school working at Goldman Sachs and Credit Suisse. He owns properties in San Francisco, Lake Tahoe, and Honolulu and has a total of $810,000 invested in real estate crowdfunding. In 2012, Sam was able to retire at the age of 34 largely due to his investments that now generate roughly $260,000 a year in passive income. He spends time playing tennis, hanging out with family, consulting for leading fintech companies and writing online to help others achieve financial freedom.