Realtor.com® Unveils the Top Markets for Real Estate Investors

Rhea-AI Summary

Realtor.com® has unveiled the top U.S. markets for real estate investment, with Dayton, Ohio leading the list. The top 5 markets are Dayton, Ohio; Rochester, N.Y.; Cleveland, Ohio; Pittsburgh, Pa.; and Knoxville, Tenn. These markets offer strong returns from lower prices and steady demand, with a focus on the Midwest and Northeast regions.

Key findings include:

• Top markets saw nearly double (1.95x) the average page views per property compared to national trends
• Home prices in these markets are 21.7% lower than the national average
• Rental vacancy rates averaged 4.8%, below the national average of 6.6%
• 13.8% of buyers in these markets were investors in Q1 2024

The report analyzed data from the 75 largest U.S. metros, considering factors such as listing prices, views per property, housing stock, and vacancy rates to identify the most promising investment opportunities.

Positive

• Dayton, Ohio tops the list with below-average home prices and robust demand
• Top markets saw 1.95x average page views per property compared to national trends
• Home prices in top markets are 21.7% lower than the national average
• Rental vacancy rates in top markets averaged 4.8%, below the national average of 6.6%
• Investor activity has increased by 4.4 percentage points since 2019 in top markets

Negative

• Rising home prices and mortgage rates present challenges for investors
• Only a handful of markets from the South and West made the list due to affordability challenges and rising inventories

Insights

Market Research Analyst

This report highlights significant opportunities for real estate investors, particularly in the Midwest and Northeast regions. The top markets, led by Dayton, Ohio, offer a compelling mix of affordability and growth potential. Key findings include:

• Average home prices in top markets are 21.7% lower than the national average
• Rental vacancy rates average 4.8%, well below the national 6.6%
• Investor activity in these markets has increased by 4.4% since 2019

The shift towards these regions indicates a changing landscape in real estate investment. While traditionally popular Southern and Western markets face affordability challenges, cities like Dayton, Rochester and Cleveland are emerging as hidden gems. This trend could reshape investment strategies, potentially leading to increased demand and property values in these areas over time.

For investors, this data suggests focusing on markets with lower entry costs and steady demand. The combination of affordable prices and low vacancy rates in these top markets presents an opportunity for potentially higher returns on investment compared to more saturated, expensive markets.

Dayton, Ohio; Rochester, N.Y.; Cleveland, Ohio; Pittsburgh, Pa.; and Knoxville, Tenn., markets lead the top 5, offering strong returns from lower prices and steady demand

SANTA CLARA, Calif., Oct. 1, 2024 /PRNewswire/ -- Amid rising home prices and mortgage rates, savvy real estate investors can still find hidden gems in affordable metros across the country, with Dayton, Ohio, standing out as the top destination for property investment this year. Realtor.com^® today unveiled a list of the top U.S. markets for real estate investment, showcasing opportunities for would-be investors in less obvious but highly promising markets, with the spotlight shining brightly on the Midwest and Northeast regions.

The top 10 in rank order include: Dayton, Ohio; Rochester, N.Y.; Cleveland-Elyria, Ohio; Pittsburgh, Pa; Knoxville, Tenn.; Albany-Schenectady-Troy, N.Y.; New Haven-Milford, Conn.; Buffalo-Cheektowaga, N.Y.; Grand Rapids-Kentwood, Mich.; and Columbus, Ohio.

"For buyers interested in investing in rental properties or other real estate, it's key to know which areas are both affordable and in high demand to be able to capitalize on any investment opportunities, especially with today's higher prices and rates," said Danielle Hale, chief economist at Realtor.com^®. "With low vacancy rates and strong demand, the markets we've highlighted as top markets for investment opportunity offer a great mix of affordability and growth potential. These spots give aspiring investors a chance to tap into long-term growth and set themselves up for solid returns as the market shifts."

The top markets for real estate investment are noted for their affordability, low rental vacancy rates, rising rents and sustained buyer demand, making them prime candidates for investment. Realtor.com^® research indicates that these markets saw nearly double (1.95x) the average page views per property compared to the national trends, with home prices an average of 21.7% lower than the national average, offering compelling value for investors.

Rental vacancy rates in these hotspots averaged just 4.8% so far in 2024, well below the national average of 6.6%, signaling a strong rental market with minimal property turnover. Furthermore, 13.8% of buyers in these markets were investors in Q1 2024, 1 percentage point below the national average, but up 4.4 percentage points from 2019 levels, reflecting a growing trend of real estate investment since pre-pandemic levels despite economic challenges.

Dayton, Ohio reigns supreme as the top investment hotspot
Dayton, Ohio topped the list for investment opportunity with its below-average home prices and robust demand, boasting a low 4.7% rental vacancy rate in early 2024. Investor activity has picked up over the past five years, with 13.7% of buyers in the first quarter being investors, just shy of the national average.

Other Midwest metros, such as Cleveland, Ohio; Pittsburgh, Penn.; and Grand Rapids, Mich. also offer strong returns for investors, thanks to their low prices and steady demand. Climbing home prices in these markets reflect sustained buyer interest, while relatively low home prices mean the typical monthly mortgage payment is lower than the U.S. average.

"As the rental market eases in many areas, the Midwest and Northeast stand out for their combination of affordability and stability," said Hannah Jones, Realtor.com^® senior economic research analyst. "These regions offer investors a prime chance to secure steady rental income and tap into growing demand, making them attractive for both seasoned and first-time investors alike."

While Midwest and Northeast lead, South and West also hold opportunities
While the South and West have historically been popular regions for investors, recent affordability challenges and rising inventories have shifted focus to the more stable, growth-ready markets in the Midwest and Northeast, and only a handful of markets from the South and West made the list. Knoxville, Tenn., is the sole Southern city to make the list, while Fresno, Calif., and Albuquerque, N.M., stand out in the West as top investment spots for their notable demand and price growth, despite their higher home prices.

Top Investor Markets

Market Rank	Geo Name	Region	Average Page Views per Property vs U.S.	Median Listing Price	Median Listing Price YoY	Property Count YoY	Rental Vacancy Rate	2024Q1 investor share	Typical housing payment
	USA	USA	1	$427,000	0.4 %	9.7 %	6.6 %	14.8 %	$2,100
1	Dayton, Ohio	Midwest	2.09	$239,000	6.7 %	5.7 %	4.7 %	13.7 %	$1,200
2	Rochester, N.Y.	Northeast	2.93	$265,000	9.5 %	-5.2 %	4.5 %	14.7 %	$1,300
3	Cleveland-Elyria, Ohio	Midwest	1.97	$241,000	12.0 %	-9.4 %	4.3 %	17.4 %	$1,200
4	Pittsburgh, Pa.	Midwest	1.47	$246,000	10.9 %	0.9 %	6.3 %	13.7 %	$1,200
5	Knoxville, Tenn.	South	1.71	$469,000	5.4 %	23.8 %	4.0 %	14.0 %	$2,300
6	Albany-Schenectady-Troy, N.Y.	Northeast	1.47	$424,000	14.2 %	-6.6 %	3.1 %	12.4 %	$2,100
7	New Haven-Milford, Conn.	Northeast	2.60	$408,000	7.8 %	-13.4 %	2.4 %	13.6 %	$2,000
8	Buffalo- Cheektowaga, N.Y.	Northeast	1.62	$266,000	9.0 %	-2.0 %	8.1 %	11.8 %	$1,300
9	Grand Rapids-Kentwood, Mich.	Midwest	1.28	$409,000	6.3 %	-3.0 %	3.8 %	7.1 %	$2,000
10	Columbus, Ohio	Midwest	2.39	$381,000	6.6 %	7.6 %	7.1 %	19.4 %	$1,900
25	Fresno, Calif.	West	1.15	$460,000	5.3 %	-7.7 %	3.9 %	19.5 %	$2,300
33	Albuquerque, N.M.	West	1.04	$409,000	4.3 %	12.5 %	7.7 %	10.7 %	$2,000

Note: Fresno, Calif. and Albuquerque, N.M. included to represent the top-ranking metros in the Western region.

Methodology
The report analyzed Realtor.com^® listing data and public data for the 75 largest U.S. metros. It used the 12-month average of listing prices, views per property, and housing stock, along with 2024 Q1 and Q2 vacancy data, to identify the top markets for real estate investment. The best markets were determined by a combination of high listing viewership, low home prices, significant price growth, growing inventory, and low rental vacancy rates.

About Realtor.com^®
Realtor.com^® is an open real estate marketplace built for everyone. Realtor.com^® pioneered the world of digital real estate more than 25 years ago. Today, through its website and mobile apps, Realtor.com^® is a trusted guide for consumers, empowering more people to find their way home by breaking down barriers, helping them make the right connections, and creating confidence through expert insights and guidance. For professionals, Realtor.com^® is a trusted partner for business growth, offering consumer connections and branding solutions that help them succeed in today's on-demand world. Realtor.com^® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more information, visit Realtor.com^®.

Media Contact
Sara Wiskerchen, press@realtor.com

 

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SOURCE Realtor.com

FAQ

What is the top market for real estate investment according to Realtor.com®?

According to Realtor.com®'s report, Dayton, Ohio is the top market for real estate investment in 2024.

How do home prices in the top investment markets compare to the national average?

Home prices in the top investment markets are, on average, 21.7% lower than the national average, offering compelling value for investors.

What is the average rental vacancy rate in the top investment markets?

The average rental vacancy rate in the top investment markets is 4.8%, which is well below the national average of 6.6%.

How has investor activity changed in the top markets since 2019?

Investor activity in the top markets has increased by 4.4 percentage points since 2019, despite economic challenges.

Which regions dominate the list of top real estate investment markets?

The Midwest and Northeast regions dominate the list of top real estate investment markets, with only a few markets from the South and West making the list.