13 Real Estate "Hotspots" to Invest In (2025 Update)
33:17 Share

Whenever you see one of those lists that claim they know the best cities to investing, I get a little bit annoyed. I don't think click on the article first, read every single word of IT, but then I get a little bit annoyed because they always have the same cities over and over again. And moreover, they never actually tell you how they arrived at the list of cities that they put on this list in the first place.

But today, we're pulling back the curtain on what the bigger pockets, latest list of hot spots. Everyone is dave. Welcome to on the market the news and economic show for informed real state investors today to go over our list.

I am joined by my friend and a market selection grow. I don't want to use the grew where it's like a bad word in real state, but a great market picker. Kathy feci, thanks for joining us, Cathy.

Oh, thanks for not calling me a gou that i'm flattered you're got me a goddess or something .

A A market selection. Got this exactly what I was going for happy. How log have you been picking real state markets for?

Would say I started around two thousand four once, you know going outside my backyard and just kind of nerd out on IT.

I just love IT. Twenty years we have the right person to join us and we also have bigger pockets own Austin wolf joining us today who put together his list of thirteen real estate hot spots that he thinks will have the most growth potential for twenty, twenty five and bio d. And just see, you know, these aren't algona markets that you're used to hearing about. A couple of them might be similar to ones who have, but I promise you will hear some markets that you have not heard of, seen on some of these lists before. So let's bring on Austin.

Hey, guys.

happy to be here. Also, we'll get to you research in just A C. But first I want to put Cathy on the Kathy have been wrong about picking a market.

You know, I really haven't I I really have nailed IT every time. The mistakes i've made have been overlooking some markets, not investing in places like Austin or loss vegas. And at the time I just I got the cash flow wasn't as good as other markets like dallas where we where we invested quite heavily or florida and know i'm happy today, twenty years later, all worked out. But the other some markets like why I didn't I buy the cash flow went have been as good. But look at that appreciation.

yes, absolutely. This is why you're the market picking got this cafe. You haven't been wrong so far. I I feel like i've been okay so far. There's one syndication I did.

It's not a bad market, but I think I picked the wrong asset class for the wrong market on one will see it's still going okay. But I have a bad thing about that. I take .

you back. I broke all my rules. Some of the rules are always invest in areas where there's a lot of a job diversification, employment diversion ation remember my little .

north kota issue? No.

north kota very dependent on oil. As soon as we thought the land there, oil Prices tanked and we're still holding IT. However, um it's looking good right now.

Yeah yeah we see what happens for your Prices. And all right, well, I think doing pretty well still where you you can retain your your gottest title I to the episode at least. okay. So Austin, let's get to hear list here. Tell me you just a little bit when you talk about a real state hot spite, what does that even mean in the first place?

yes. So to me, I defined that as A A real state market where the economy is is booming and is going to continue to boom. If we look at the correlation between income growth and home Price appreciation over the majority of markets, we find that there is a strong relationship as incomes, right? So do the Prices of homes.

And one thing that contributes to incomes rising is a diverse economy that also growing as well. And so through that logic, I did an analysis last month where I just analyzed the markets with the fastest growing incomes in the area, but I didn't think that painted the entire picture. So here I actually did want to paint the whole picture of of the economy. So I looked at, I started with population growth, but then I also looked at job growth, wage growth as well as GDP per capital, which can be thought of as a measure of of productivity in a given market. So those are the key variables that I looked up to, then go down and and take a look at which markets are healthy and which markets are still growing strong.

Seem great variables. Austin, i'm curious because we on the show, we talk about a lot of different data. Can you just explain a little bit about why you pick those? Because there are a lot of different ways that you can measure the economy and the labor market and job market. why? Why did you pick these ones specifically?

Yes, these ones are most correlated with growth in in Prices. There are other things that you could look at, such as uh, percent of people with stem degrees, percent of people with with batteries are higher as well as occupation diversity. So maybe you don't want to pick a market where most people in there are just in the entertained industry or or most people in there are just in the logistics industry. Maybe it's Better to have a more diverse economy, but the most important factors when we look at correlation between variables and and Price growth or a population job a and waging increases, I did at GDP in there as well. It's it's not as strongly correlated as those of the three, but I thought I was a little more important to include than maybe percent of people with batter degrees.

This is so cool. This is often, where have you bent on my life?

You can't hire her, Cathy. He works for us.

Twenty years ago when I started, you might have been, and I don't know, I love, I love, love, love that you are breaking IT down to this level of detail where for me it's a lot of gist gut check, right? But you're validating so much of the gut check with this data. I'm thrilled. Thank you. Bigger pockets.

Yeah, yeah, this is great. awesome. Thank you. And you could all everyone, by the way, we will put a link to this. We're going to talk about this bunch of the show, but awesome publishes on the bigger poke's blog.

So i'll put a link to that or you could just google bigger pockets, thirteen rail state hot spots come up there before we get into the exact mark. I also I did have one more question for you. This is just something that happens with data else as data is inherently backward looking, right? IT is stuff that is already happened. So how do you take the data and things that have happened historical? And then as looking forward, which markets you think the trends are going to continue or perhaps even mabe even Better markets where you think that the growth might accelerate in the future?

So when IT comes to time series forecasting and you have to use past data to predict future results, there is no other way to do IT. Then by looking at past data that I have a joke when I was studying data science that how does the data scientist driver a car? You're looking in the review myr, because you have to look back wards to look forwards.

But one thing that I did to not just take a look at OK, what are the places that grew most in the past five years? I also took a look, places that grew the most in the past one year as well. And I thought that was important because you could have these pandemic boom towns where they they really grew in and twenty and twenty one and twenty two.

But what about the previous year? Did that growth slow down or or did that growth continue? So it's not a perfect prediction. But I think looking at the whole as as a fired average and then also how much I grew in the past previous year, IT is A A good enough mix of both to hopefully take a look those Marks that are still continuing to seek groth, ones that didn't just boom during the pandemic and now are sort of stage meeting.

right? great. That is a great example. And just everyone you should know this about all data, all lists that obviously past performance not indicative of future results. But we do our best here to try understand where trends are heading. And austen is a fantastic job doing this. Are will going to take our first break, but don't go anywhere, will get into the cities on Austins list and which one surprises the most right after this?

Wondering where the bigger pockets community gets the best rental property insurance start at steadily dotcom steadily landlord insurance protects against property damage, loss of rental income and liability claims. With lightning fast quotes, superior coverage and a team that understands real state investors, unique needs they've got you covered could be that com for an instinct quote.

Now the big repointed com slash insurance and protect your renters with steadily insurance, steadily insurance found by landlords, for landlords. Byo cell. Hi, very easy to say, but not always so easy to do.

For example, high interest rates are hurting the real estate market right now. Demand is dropping and Prices in a lot of markets are falling even for many of the best asset. So no wonder the funder ized flagship fund plans to go on a buying spray, expanding its a billion dollar real estate portfolio over the next few months.

You can add the fun rise flagship fun to your portfolio in just minutes. There is little as ten dollars by visiting fundraised dot com slash pockets. Fundraised t com slash pockets carefully considered the investment objectives, risks, charges and expenses of the fund rise fog ship fund before investing. This and other information can be found in the funds perspective at funding SE 点 com slash flagship。 This is a paid advertisement.

This podcast is brought to you by progressive insurance, physically responsible financial genius, monetary magicians. These are the things people say about drivers who switch their car, turns to progressive and save hundreds. Visit progressive dot com to see if you could save progression using insurance company. The potential savings very not available in all the situations.

Hi mesters. I'm here with osteoarthritis fec talking about the cities where the data tells us we should be investing. Let's get back into IT. Cathy, you're looking at the stuff all the time. You see these lists that come out all the time where there any markets on Austin list that you are surprised by?

Yeah, the number one, the number one on the list was photo x. Um and that surprised me.

I was kind of surprised what .

I want to me too, really. Yeah, I I was surprised as well.

Yeah, I mean, it's one of those markets like I said earlier, like I I, I always knew that californians were moving there, but I kind of thought I was over like twenty years ago and then you five years later. Like I can keep growing, but IT just does and that's amazing. So yeah, I mean, good for all you who did invest there.

I I know some of my daughters friends there. They are genius who are investing in the area and they're renting by the room, making the numbers work because IT is expensive. It's expensive but is still growing. And I think a lot of reassuring happening that I know some of the chip manufacturer moving into the area as well.

Yeah, I just seems like he just keeps growing. And I mean, if our friend James dyer just move there, i'm sure the profitability of all real estate investments are going to go up just because he is because he's one person, he's going to bring up the average profit. So also, you said you were surprised like what what was the data saying to you that made this number one on the list?

The wage growth, the employment growth, the GDP per capital, the low unemployment rate, everything there is. It's just shocking to me. I I actually grow up in phoenix.

X I was born there. I lived there for half my life. I still visit there many times a year because my dad lives there and so um i've personally seen IT grow. But growing up there I have my own voices about the city that I was like, okay, this is just a desert city.

Not lot of water is very hot and in the summer times when I was a kid, summer break meant you state indoors all day, play video games because you can't go outside or you're hand on the swing set so um I didn't personally enjoy growing up there. But man, the data proves you wrong. So many people love living there, and so many people are moving, continuing to move there again.

Wages are increasing and just the employment numbers are are my boggling there. And the Austin grew so much over the pandemic and I think that um I I personally think that that ship has has sailed. If you got into Austin during that during that time, before that time, you made a lot of money, but I don't think the growth has started to slow down for phoenix X I. I think that phoenix is continuing to to grow even, even more than Austin just according these numbers.

That's very surprising.

Yeah, I don't know, Kathy. Maybe you feel the same way for me. Photo x is just the cash low.

I think we've missed like that part to me. I think you'd have to be patient. You look at the rent Price ratio, there is point four. yeah. So you're gonna to do some pretty heavy value ad to probably find cash. Al, right now, I totally buy the idea that the city is growing, but IT probably is Better for my instinct is just that this would be Better for people who are going to flip, who are going to rent by the room, like caffeine you mentioned, or who are going to do. Maybe birds are of a heavy value out kind of strategy.

Yeah, you can have to get creative in that market, but I guess the californians are still coming on over.

Yeah, I am curious. I I want to see who else is moving there. Have you ever see those tools are kind of cool, where they show, like where people are moving from. I'd be interested to see from photo x, you just anette ally Kathy live in california. A lot of you think a lot of california a move there.

absolutely. I an if started home is over a million dollars. I think one point two now how are you going to do that? You know so IT still looks somewhat affordable for a first time home buyer um compared to here. And it's a quick light know if you if you have to go into the office, baby, three days a week, baby, you just live there and jump on a plane and you're here in forty five minutes or you know, it's not it's not far well.

I pulled up, uh, actually one of those tools just what we are talking and you're right. The number one in bound uh city is loss and Angeles absolutely right. There's a lot of interestingly in state uh, migration so people from flag staff from two sons or moving to phoenix looks like vegas is another popular on so it's mostly regional but do see people from chicago new or column ving there as well.

And what confuses me is why two son hasn't had the same trajectory because it's a great little town. You know it's it's beautiful, it's nearby phoenix, but it's just I don't know us and you did you get any data on .

yeah I ve always wonder the same IT just doesn't w is you're right. The employment numbers aren't growing as fast but they have a great college there yeah relatively speaking um it's a wonderful place. Um there's a great music scene.

It's actually cooler than phoenix because they don't have much concrete. S V enix is less of a heat island effect. IT seems like a nice place.

Am, also why companies aren't also moving. There may be maybe it's because the newark effect photo x is already so big. You are they have so much access to yeah talented workers that start your business.

The x to then on, I would like IT is so expensive, why don't companies move? They are, but it's still the hub. If you really want to be somebody got to .

be there that in the I don't know much about two thousand sort of flies in the face of one of my favorite investing philosophy, which is sort of city idea where when they're super expensive cities um or really big growing cities, that secondary cities of church I cities that are right outside of them typically grow as well.

And I actually wanted to call out two of them um that I noticed here uh one for me I wasn't surprised to see but IT brought up some painful memories like Cathy said when I really missed was colorado springs, colorado. That's I don't know if you call the satellite city, but it's only about hour, hour and fifty minutes from denver. And when I was investing in denver, uh, I went down there actually for a totally not real state reason and I wanted up just like go on to some open houses, and everything was so cheap.

And like twenty, even in twenty teen or twenty fourteen, he was so cheap. And I honestly at that point just I didn't have the sophistication to set up a team that far away. And I didn't do IT.

And i've always regretted IT because you could buy duplexes for nothing back then and it's just absolutely exploded there. And I will say the reason i'm surprised by IT is like I didn't really think the economy would grow there as much as IT is. But I can you tell us a little bit about why color our spring is on the list?

Yeah, I think the economy is is starting to diversify more than IT has been over the past ten years. And we have the military there as more professional services, tech jobs are being added into the area as well. And to your point, IT is more affordable than denver.

And and one reason why denver didn't make the list IT just didn't have as much a wage growth as color order printed. Colorado springs is has seen a healthy percentage of wage increases over the past five years as well. So I think that, that contributed a lot to this area, sort of growing and also being added on this list.

Again, I did wage growth pretty highly. So I think that the wage growth overall, the region is going to start to contribute to to Price appreciation there. So anyone that's gotten into this market, I would say it's not too late.

I think personally, I think the ship is also sailed on denver. If you got in the past ten years, great. Um but this year and next year, i'm not so sure. I think color the springs might be a Better bet for you.

I'm curious, David looked up um migration to phoenix. Are there a lot of californians move in color us springs because aneta I know a lot of people like some of our own employees. We have a remote company and they they would buy the property where they want to retire um years ago because he was so hard in california and moved there. So one of our employees did that. He bought the house probably ten years ago, but just moved there a couple of years ago.

So there is not any big city that's contributing to car, any one individual city that's growing the most september. This this tool and apartment less says forty percent of the people who are are searching for apartments in color of springs from out of, out of town or from dever, where as la is just one point three percent. So it's that huge.

Like compared to new york is one percent. Chicago is one point seven percent. So it's kind of equal for all the big cities for color to springs.

And then you see a lot of other military towns there too, which is not surprising. You know that the air force catoe is in color. Spring is big military presence there, which is great for investors.

You mean that provides a very stable tenant base for sure? And it's so asset to me. These are both sort of good appreciation markets. Are other any markets that you think on this list are Better for cash out?

absolutely. I would say probably the majority of them since and hio um their job numbers are very impressive. Columbo hio equally as impressive fit fill the northwest arkansas employment numbers. Very, very.

very impressive. You just added one. You just added one job to the employment.

That's right. I am a taxpayer in this area.

They go bigger pockets, added one job to fail. fail. Yeah, if you guys haven't heard the Austin story, he worked a bigger pockets, obviously, but he just moved from L A.

To to faith vill to housework, his first investment property. So i'm just joking around with him about that. But obviously he put his money where mouth is with favor for sure. Yeah.

yeah. I mean, alcohol, a city a is another one. And then we have a metro in south CarOlina called at columbia looking into IT. It's it's more for college town, but they seem to start. To have diversified their economy and the Green bill south american as well, which has a lot of a distribution and manufacture jobs. So I would say that most of the metro sonless list actually are quite affordable, pared to all the of the metros s in the united states at this current point time that that are also growing.

Kathy, do you have any experience with any of those markets?

Well, I was happy to see santonio on the list because as you know, um we have a indication we just launched to build to rent community. It's on passive pockets now yeah and i'm happy to see its on the list because we believe it's one of the fast well Philippo that were in in the top ten fastest growing that come in the country. So it's just great to have the confirmation that we have a gensia that did the data .

research .

to back up yeah oklahoma city always i've i've been a big fan of oklahoma city. There hasn't been as much appreciation there, but that could be changing. I know. Okay, ma is kind of in competition with texas now possibly going to remove the stay in context to be able to compete. So I think that's a great kind of cash flow play where there could be appreciated.

And then since anadi, oh my god h fifteen years ago, this woman came to me and said, hey, you know, I know you you are looking for a good teams around the country. How about this little area between since and addie and date? Ohio, Butler r county now um it's not just such a like people know IT.

Now there has been very high appreciation over the last few years in this in this little Butler county that you know that we took a big risk on. So you can still cash low there. But there, i'm not going to say that it's going to be a high appreciating market in the future.

But one of the things that gives me comfort, and I know David and I ve talked about this, I don't think you put this on the list, awesome, but climate change is is going to be a huge factor. And that ohio region has a lot of water, which makes me nervous about phoenix. Like what if they run out of water? That's an issue.

Where's ohio has plenty of IT. So I like IT for that. The follow the possible appreciation in the water yeah.

there's a lot of I can send to di. I was looking at markets in the midwest last year, and I thought about that and one up just not picking a fur. Couple of convenience reasons.

But yeah, there's a lot to like there. And I actually almost invested in tannura ney. I think i've told you this cat, they actually flew down there and went around.

But IT was really hard for me being out of state investor to figure this out. It's so big, it's big. It's like, I don't know. It's the eighth bigger city in the country .

like IT is huge. People don't under the radar, still has a small town field. We just did our company retreat there and had an absolute blast. The river walk is gorgeous.

It's ine. It's cool. yeah.

So and the little pockets around town, we went rock climbing. We did laser attack.

Great times.

Lot going on. And i've got a close friend who's now in the military there. It's again another huge military base.

and that's always good. Yeah, yeah for sure. You know, silly B, I looked at in antonia because I was like, oh, Austin, getting over built. I'm going to look for like a satellite city of Austin.

And I was like, weight Austin, the satellite city of stadio, said a is a way even yeah even though you know also obviously gets a lot of news because it's a take up but but just population wise uh, senator is absolutely massive, are at time for one last short break. But as always, if you want to leg up under your own market research, you can use the market finder and deal finder tools at bigger pockets. Stock com will be repeat running at a gas.

That's a problem that's avoided owning a rental property without proper landlord insurance. That's a problem that's equally avoidable. Steadily, landlord insurance can help steadily offers fast quotes on property and liability coverage that are Taylor made for the real state of vector community, and they can even compare pricing from multiple Carriers for landlords looking to with their different option.

You can rest rest easy knowing your investments are secure with steadily the available online twenty four seven and they can start coverage as fast as the next day is bigger pockets that com slash landlord insurance to secure your investments with steadily insurance, steadily insurance wound by landor's or landlords byo cell high, very easy to say, but not always so easy to do. For example, high interest rates are hurting the real state market right now. Demand is dropping.

Prices in a lot of markets are falling even for many of the best assets. So it's no wonder the fundraised flagship fund n plans to go on a buying spray expanding its a billion dollar real estate portfolio over the next few months. You can add the furries flagship fun to your portfolio in just minutes and with as little as ten dollars by visiting funded SE dot com slash pockets. Fundraised dot com slash pockets carefully considered red the investment risks, charges and expenses of the fn rise flagship fund before investing this and other information can be found in the funds perspectives at funding SE dark com slash flagships. This is a paid advertisement.

This podcast has brought you by progressive insurance you chose to hit play on this podcast today. Smart choice, make another smart choice with other, explore to compare rates from multiple congresses. M, S, not available in all states or situations.

Prices very based on how you buy. IT took a lifetime to find the person you wanted marry, finding the perfect engagement ring is a lot easier. A blue ele that com you can find, or design the way you've always dreamed of with help from blue ele jewelry experts who are on hand, twenty four answer questions and the easing convenience of shopping online for a limited time. Get fifty dollars off your purchase of five hundred dollars or more with code pod at blue that com. That's fifty dollars off with code pod at blue, ie that com.

Welcome back to the show. Let's jump back again, right? So those are a couple of the spots on our list.

Um I could read off a couple of others just so everyone knows the top five or fedex number two is tampa. And no surprise there. Cathos been talking about that for years.

Great market three is rally, another one that's kind of on a lot of list, then santoni and then boysie. Austin, you know, some of these are on common list, some are definitely not. So what do you think differentiates your list from the ones that you probably see on, I don't know, yahoo finance.

yeah. The most important thing is when IT comes to a list on, say, yahoo finance or other places, population is always sort like the main variable that people use an. And for good reason, you need people moving into a city for IT to grow.

But the other thing that I sure to look at was was wage growth and then the GDP per capital factory. Those variables in did change the cities that got included into this less. But that being said, places like photo x and Riley and tamper and boys, I just grew so much and they still continue to grow that you're probably going to continue to see them on these other lists as well. I don't think the growth has has stopped for these cities that they're are going to continue to grow for at least the next year, if not the next five.

Now is interesting with tampa know we've had some major storms with major damage and and that was terrifying. We were fine. We were fine because we focus on buying, not buying in flood zones.

If you stay out of the flood zones, our house is in same Petersburg is older. I've always said, get a new property if you're going to be in near the coasts in florida, because they really are built to her kane standards. But the one we have is old, really old. And the only thing that happened in that massive storm was the fense went down. So if that gives anybody any you a little bit of pazar comfort, as long as you get a little inland and stay out of the zones, you know it's it's still a great place to invest.

All right. Well, I ask you both your surprise cities that we're on here, Austin, are there are cities that you thought that would make the list, that when you did all the calculations surprise you that they didn't make the st.

I I still really thought awesome would make the list, but I just didn't have as much wage growth in the past one year. I think that's that's fine at the wage. The wages there are pretty high already to begin with.

It's it's hard for the cities like solar city and dallas and nash fill to continue to grow their wages. They are not going to keep growing forever. I just think that those places, while I was surprised to not see them on this list to me, it's maybe possibly in indication that again, the ship has sailed as far twenty twenty five goes. If you bought before this year, you probably did very well. But there are maybe Better places to buy in the coming year than than those places.

Yeah, I was super surprised to not see dallas on there or Jackson, vic. Cities come up on every list.

Yeah, yeah. I was jealous. I was kind of surprised by Jackson. Bill, yeah, is on pretty much to every list.

I just never like to the fundamentals of Jackson walls for some raising. Personally, I was really surprised atlanta wasn't on there. I feel like everyone's ago.

It's kind of over. I don't know it's over. It's a huge growing city. But IT has gone super expensive in atlanta relatively. And the one I really felt was going to be on there was indian apple is I just feel like everyone loves indian apple is I know you thought about buying that, right?

yeah. So any apples was actually my first choice for the house fate. Those number two, an apple lus has such great fundamentals. IT just didn't beat since ini and columbus for the sort of the top spot.

When IT comes to the employment and wage growth, the wage growth hasn't been a strong the employment growth husband, there are so many jobs moving their relative to other midwest places. So I still like the with mark, and I think that's good undammed. Tals didn't have as much wage growth this since and .

ati or columbus. So why why do you pick if if indian apple was choice number one, right, to pick them? Well.

I actually found a deal so good here that I couldn't say, no, I love IT. yeah. So the fundamental of the deal with great new construction shaper than anywhere I could find in fail or an enables IT was really good.

It's not too good to be true. It's not easy to be in the deal. It's little chAllenging. But what is warned about IT said IT was a good property for a fair Price.

Alright, anything to hang out with Henry, which something that financially is that you're close to Henry? All right. Well, I think that's all we got today for you guys.

If you want to see out the rest of the list again, we'll put a link to the show notes so you could just google thirteen rail state hot spots by Austin wolf. awesome. Thank you so much for putting together this list.

Really appreciate not just doing the research but explaining IT to people so they don't just see a list and you know trusted blindly but understand all the thought and care that you put into IT as well. Happy help. And Kathy, the market picking got us. Thank you for gracing us with your presence today. We appreciated as always.

and I will end with a blessing to you.

You gave I think you are so much we'll see you next time for on the.