Find Emerging Real Estate Markets

Find Emerging Real Estate Markets:

While a recent report can identify some towns as "booming" , for real estate investors, it's important to do your own research on emerging markets. After all, your goal should be to get in on the ground floor before others realize the extent of the investment opportunity. With that in mind, here are some important metrics to look at if you're searching for emerging real estate markets.

First, look at broader economic metrics

In order to find the markets where the best real estate opportunities are located, your first step should be to look at the local economy as a whole. After all, if there isn't any economic growth, it's likely that the real estate market isn't going to be flourishing either.

Job growth

In finding an emerging market, one of the first signs that you want to look for is job growth. In particular, you will want to focus on questions such as the following:
What is the current unemployment rate?

How does the unemployment rate compare to the national average?

Has the unemployment rate been increasing or decreasing over the last few years?

Are there growing job opportunities in multiple sectors?

As for where to find this info, your first stop should be to look at Labor Statistics.

Population growth

Typically, when an economy is doing well, the population will be growing at a steady rate. By extension, a growing population will increase housing demand and will ultimately strengthen the market over time.

Then, look deeper into specific housing metrics
Then, once you've identified a few emerging economies, the next step is to take a closer look at the real estate market as a whole. In truth, there are many different metrics you can use to get a sense of how the property market is faring.

New-construction numbers

Many real estate gurus would say that there's no better indicator of a healthy housing market than new construction. In some respects, they are right. In an up-and-coming market, it can seem like there's construction on every corner and in just about every asset class.

Existing-home sales

Next, it's important to look at existing-home sales. Along with new construction, home sales should be on the rise if a particular market is about to explode. 

Rental rates

If rental property rates are climbing, that's another indicator that demand is high. With that in mind, you'll want to search areas where rents have been on the rise for the last couple of years.

A note on finding the right neighborhood
While the above metrics should be enough for you to identify broader areas for real estate investment, you'll also need to zero in on particular neighborhoods before looking at any investment properties themselves.

The ability to identify emerging markets is one of the great skills in real estate investing. While there are many investing software programs out there that claim to sift through the crucial data for you, in truth, it's important to know how to do this process yourself. After all, that's the only way you'll know your assessment will truly be accurate.

With that in mind, use the metric above to get a sense of whether a particular market is right for real estate investing. While combing through all the data may take a little bit of time, in the end, it will likely be worth the effort. Armed with this knowledge, you should have a much clearer idea of where to find your next investment opportunity.