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2018: The year of the secondary market? 24 under-the-radar cities that investors are eyeing

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Within the real estate sector, there’s a lot of talk about primary markets and secondary markets. If you’ve encountered these terms before, you’ve probably wondered, “What makes some thriving cities primary markets, while others are secondary markets?” or “How do you tell the difference between secondary markets and tertiary markets?”

You’re not the only one who has these questions—in fact, even real estate experts often disagree about the boundaries of secondary markets. The characteristics that differentiate primary, secondary, and tertiary markets are constantly evolving in response to changes in the city’s population and the volume of real estate transactions.

What most experts agree on is that Boston, Chicago, Los Angeles, New York, San Francisco, and Washington D.C. are primary markets; and some consider Dallas-Fort Worth and Houston to be as well. These cities are powerhouses in terms of their population, real estate market, and economic impact. These are cities where hundreds of thousands (and sometimes millions) of people live and work. In an upcoming post, we’ll talk about primary markets’ past, present, and future growth.

But in this post, we’ll talk about secondary markets: What they are; how they’re growing; and the opportunities they may present for property managers, owners, and investors in 2018. For more predictions for the 2018 real estate market, be sure to download our free guide: What to Watch in 2018: 7 Predictions for the Housing Market & Property Management Industry.

What Are Secondary Markets in Real Estate?

Secondary markets are generally mid-sized cities that have begun to experience an uptick in growth—and as a result, they begin to capture people’s attention. We see steady growth in the local economy, with new jobs and businesses opening up, as well as an emerging tech sector in many cases. We also see steady growth in the city’s population as young, educated professionals and families move in. The housing market steadily gains strength but remains less competitive than primary markets—resulting in lower prices for homebuyers and higher returns for investors. In the rental market, occupancy rates begin to rise; but because the supply of apartments is relatively unconstrained, rent prices stay affordable for most residents.

Because there are no strict boundaries delimiting which cities qualify as secondary markets versus primary or tertiary ones, there are exceptions to this definition. For example, many of the country’s most populous cities are not considered primary markets. Among America’s 10 largest cities are Phoenix, Philadelphia, San Antonio, San Diego, and San Jose, each of which has over 1 million residents—but the strength of their respective housing markets classifies them as secondary markets.

In addition, the cities that are considered primary or secondary markets are constantly changing in parallel with the local and global economies. Detroit is a prime example of a city whose dwindling economy caused a dramatic shift from a primary market that once attracted hundreds of thousands of workers and families, to a secondary or even tertiary market that has endured bankruptcy and lost over 60% of the population it had at its peak.

Nashville, TN | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

What Impact Did the Recession Have on Secondary Markets?

At this point, you might be having déjà vu: Weren’t investors talking about secondary markets during the real estate boom of the 2000s, too? The answer is yes—and here’s why. In a strong housing market, competition can grow so steep in primary markets that investors begin looking to secondary markets for new opportunities with higher returns. This happened prior to the last recession—but then, of course, the market crashed, leveling housing markets across the country.

As of 2017, our real estate market had officially rebounded from the recession, with home sale prices meeting and often exceeding pre-recession rates. Secondary markets initially took longer to bounce back than primary markets did. However, since early 2016, secondary markets’ year-over-year growth has beat out growth in primary markets—and investor interest has been swiftly rising, just as it did over a decade ago.

Some experts believe that secondary markets simply have more room to grow than primary markets, which are constrained by buyers’ dwindling ability to afford these markets’ steep prices. On average, according to a 2017 report released by PwC and the Urban Land Institute, the cost of doing business in secondary markets is 16% lower than in primary markets. Real estate costs are 38% lower in secondary markets, energy costs are 22% lower, and labor costs are 14% lower than in primary markets.

Overall, in relation to income, home prices are 45% more affordable in secondary markets. This is one of many factors making secondary markets highly attractive to investors and homebuyers alike. As more people and businesses make the move into thriving secondary markets, strong rent growth and occupancy rates will present big opportunities for property managers and owners looking to grow in new directions.

Read it on the #BuildiumBlog: Which 24 cities are our best bets for business growth in 2018? Click To Tweet

Which Secondary Markets Are Good Investments in 2018?

We took the time to dig into hundreds of expert predictions about which secondary markets buyers should watch in the coming year—and by extension, where property managers should focus their attention if they’re looking to grow in 2018. We’ve selected 12 secondary markets that are our “best bets”; and another 12 up-and-coming secondary markets to keep an eye on in the coming year.

The secondary markets we’ve chosen to highlight are those that are consistently mentioned in expert predictions for real estate investments of all kinds. They’re places where homeowners and businesses are moving in, some of whom have been priced out of primary markets. The cities’ local economies show rising GDP per capita, along with strong job growth and falling unemployment rates. Home sales and prices show strong growth but remain affordable, sparking investor interest and increased homeownership rates. New properties are being built to accommodate the growing population and are being absorbed into the market. In these rental markets, rent growth and occupancy rates are rising, making these cities a promising destination for property managers, homebuyers, and investors alike.

Which Secondary Markets Are Good Investments in 2018?

Tier I: Our Best Bets

Austin, Texas

Austin, TX | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Austin Real Estate Market Statistics

  • Population: 947,897 (City Data, 2016)
  • Population growth: 19.93% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 31% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 20.3% (PWC, 2017)
  • 5-year job growth: 137.0% (PWC, 2017)
  • Median home sale price: $286,100 (Zillow, 10/2017)
  • Home price growth: 0.6% (PWC, 2017)
  • Home affordability index: 148.1 (PWC, 2017)
  • 3-year projected household growth: 8.7% (PWC, 2017)
  • Rent as % of household income: 19.9% (PWC, 2017)
  • Median rent – 1-bedroom units: $1120 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $1380 (Apartment List, 1/2018)
  • Year-over-year rent growth: 0.1% (Apartment List, 1/2018)

Expert Opinions on Austin’s Real Estate Market

  • Top Destination Markets for Migration from Primary Markets (2011-2015): Ranked #20 (PWC/U.S. Census Bureau)
  • U.S. Markets to Watch in 2018 – Overall Real Estate Prospects: Ranked #2 (PWC)
  • U.S. Markets to Watch in 2018 – Homebuilding Prospects: Ranked #25 (PWC)
  • Local Economy: Ranked #4 in the U.S. (PWC)
  • Top 9 Real Estate Markets to Watch in 2018 (Curbed)
  • 10 Hottest Housing Markets of 2018 – Ranked #6 (Business Insider)
  • Fastest Growing Cities in the U.S. – Large Cities: Ranked #1 (WalletHub)
  • Best Places for First-Time Home Buyers – Large Cities: Ranked #19 (WalletHub)

Charleston, South Carolina

Charleston, SC | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Charleston Real Estate Market Statistics

  • Population: 137,539 (City Data, 2016)
  • Population growth: 11.91% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 29% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 9.5% (PWC, 2017)
  • 5-year job growth: 117.7% (PWC, 2017)
  • Median home sale price: $231,100 (Zillow, 10/2017)
  • Home price growth: 1.4% (PWC, 2017)
  • Home affordability index: 145.3 (PWC, 2017)
  • 3-year projected household growth: 5.4% (PWC, 2017)
  • Rent as % of household income: 20.7% (PWC, 2017)

Expert Opinions on Charleston’s Real Estate Market

  • U.S. Markets to Watch in 2018 – Overall Real Estate Prospects: Ranked #14 (PWC)
  • U.S. Markets to Watch in 2018 – Homebuilding Prospects: Ranked #8 (PWC)
  • Local Economy: Ranked #11 in the U.S. (PWC)
  • Fastest Growing Cities in the U.S. – Mid-Sized Cities: Ranked #20 (WalletHub)

Charlotte, North Carolina

Charlotte, NC | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Charlotte Real Estate Market Statistics

  • Population: 842,029 (City Data, 2016)
  • Population growth: 15.12% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 27% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 15.3% (PWC, 2017)
  • 5-year job growth: 115.7% (PWC, 2017)
  • Median home sale price: $200,000 (Zillow, 10/2017)
  • Home price growth: 0.7% (PWC, 2017)
  • Home affordability index: 163.0 (PWC, 2017)
  • 3-year projected household growth: 8.7% (PWC, 2017)
  • Rent as % of household income: 21.1% (PWC, 2017)
  • Median rent – 1-bedroom units: $940 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $1090 (Apartment List, 1/2018)
  • Year-over-year rent growth: 2.0% (Apartment List, 1/2018)

Expert Opinions on Charlotte’s Real Estate Market

  • Top Destination Markets for Migration from Primary Markets (2011-2015): Ranked #18 (PWC/U.S. Census Bureau)
  • U.S. Markets to Watch in 2018 – Overall Real Estate Prospects: Ranked #12 (PWC)
  • U.S. Markets to Watch in 2018 – Homebuilding Prospects: Ranked #16 (PWC)
  • Local Economy: Ranked #15 in the U.S. (PWC)
  • 10 Hottest Housing Markets of 2018 – Ranked #4 (Business Insider)
  • Fastest Growing Cities in the U.S. – Large Cities: Ranked #2 (WalletHub)
  • U.S. Cities with the Highest Rent Growth: Ranked #3 (Business Insider)
  • 10 U.S. Housing Markets That Will Rule 2018: Ranked #7 (Realtor.com)
  • 10 U.S. Cities with Huge Increases in Homeownership: Ranked #2 (Realtor.com)
  • Best Places for First-Time Home Buyers – Large Cities: Ranked #15 (WalletHub)

Dallas, Texas

Dallas, TX | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Dallas Real Estate Market Statistics

  • Population: 1,317,942 (City Data, 2016)
  • Population growth: 10.03% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 28% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 10.9% (PWC, 2017)
  • 5-year job growth: 125.9% (PWC, 2017)
  • Median home sale price: $243,400 (Zillow, 10/2017)
  • Home price growth: 2.0% (PWC, 2017)
  • Home affordability index: 153.7 (PWC, 2017)
  • 3-year projected household growth: 6.5% (PWC, 2017)
  • Rent as % of household income: 19.6% (PWC, 2017)
  • Median rent – 1-bedroom units: $880 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $1100 (Apartment List, 1/2018)
  • Year-over-year rent growth: 2.2% (Apartment List, 1/2018)

Expert Opinions on Dallas’ Real Estate Market

  • Top Destination Markets for Migration from Primary Markets (2011-2015): Ranked #8 (PWC/U.S. Census Bureau)
  • U.S. Markets to Watch in 2018 – Overall Real Estate Prospects: Ranked #5 (PWC)
  • U.S. Markets to Watch in 2018 – Homebuilding Prospects: Ranked #7 (PWC)
  • Local Economy: Ranked #2 in the U.S. (PWC)
  • Top Multifamily Property Investment Prospects: Ranked #15 in the country (PWC)
  • Top 9 Real Estate Markets to Watch in 2018 (Curbed)
  • 10 Hottest Housing Markets of 2018 – Ranked #10 (Business Insider)
  • Fastest Growing Cities in the U.S. – Large Cities: Ranked #17 (WalletHub)
  • Hottest Markets of 2017: Ranked #9 (Realtor.com)
  • U.S. Cities with the Highest Rent Growth: Ranked #15 (Business Insider)
  • 10 U.S. Housing Markets That Will Rule 2018: Ranked #2 (Realtor.com)
  • 10 U.S. Cities with Huge Increases in Homeownership: Ranked #9 (Realtor.com)
  • Best Places for First-Time Home Buyers – Large Cities: Ranked #26 (WalletHub)

Denver, Colorado

Denver, CO | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Denver Real Estate Market Statistics

  • Population: 693,060 (City Data, 2016)
  • Population growth: 15.48% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 28% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 13.2% (PWC, 2017)
  • 5-year job growth: 121.3% (PWC, 2017)
  • Median home sale price: $368,800 (Zillow, 10/2017)
  • Home price growth: 1.6% (PWC, 2017)
  • Home affordability index: 111.5 (PWC, 2017)
  • 3-year projected household growth: 5.4% (PWC, 2017)
  • Rent as % of household income: 20.6% (PWC, 2017)
  • Median rent – 1-bedroom units: $1040 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $1310 (Apartment List, 1/2018)
  • Year-over-year rent growth: 1.6% (Apartment List, 1/2018)

Expert Opinions on Denver’s Real Estate Market

  • Top Destination Markets for Migration from Primary Markets (2011-2015): Ranked #17 (PWC/U.S. Census Bureau)
  • U.S. Markets to Watch in 2018 – Overall Real Estate Prospects: Ranked #23 (PWC)
  • U.S. Markets to Watch in 2018 – Homebuilding Prospects: Ranked #14 (PWC)
  • Local Economy: Ranked #7 in the U.S. (PWC)
  • Top 9 Real Estate Markets to Watch in 2018 (Curbed)
  • 10 Hottest Housing Markets of 2018 – Ranked #7 (Business Insider)
  • Fastest Growing Cities in the U.S. – Large Cities: Ranked #3 (WalletHub)
  • Hottest Markets of 2017: Ranked #10 (Realtor.com)
  • Best Places for First-Time Home Buyers – Large Cities: Ranked #10 (WalletHub)

Miami, Florida

Miami, FL | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Miami Real Estate Market Statistics

  • Population: 453,584 (City Data, 2016)
  • Population growth: 13.55% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 26% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 10.9% (PWC, 2017)
  • 5-year job growth: 102.0% (PWC, 2017)
  • Median home sale price: $252,300 (Zillow, 9/2017)
  • Home price growth: 1.8% (PWC, 2017)
  • Home affordability index: 77.7 (PWC, 2017)
  • 3-year projected household growth: 5.6% (PWC, 2017)
  • Rent as % of household income: 34.2% (PWC, 2017)
  • Median rent – 1-bedroom units: $1070 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $1360 (Apartment List, 1/2018)
  • Year-over-year rent growth: 0.4% (Apartment List, 1/2018)

Expert Opinions on Miami’s Real Estate Market

  • Top Destination Markets for Migration from Primary Markets (2011-2015): Ranked #3 (PWC/U.S. Census Bureau)
  • U.S. Markets to Watch in 2018 – Overall Real Estate Prospects: Ranked #11 (PWC)
  • Local Economy: Ranked #35 in the U.S. (PWC)
  • Fastest Growing Cities in the U.S. – Large Cities: Ranked #7 (WalletHub)

Nashville, Tennessee

Nashville, TN | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Nashville Real Estate Market Statistics

  • Population: 660,393 (City Data, 2016)
  • Population growth: 9.84% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 28% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 11.1% (PWC, 2017)
  • 5-year job growth: 108.0% (PWC, 2017)
  • Median home sale price: $237,400 (Zillow, 10/2017)
  • Home price growth: 1.9% (PWC, 2017)
  • Home affordability index: 150.2 (PWC, 2017)
  • 3-year projected household growth: 6.5% (PWC, 2017)
  • Rent as % of household income: 20.6% (PWC, 2017)
  • Median rent – 1-bedroom units: $910 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $1110 (Apartment List, 1/2018)
  • Year-over-year rent growth: -0.1% (Apartment List, 1/2018)

Expert Opinions on Nashville’s Real Estate Market

  • Top Destination Markets for Migration from Primary Markets (2011-2015): Ranked #21 (PWC/U.S. Census Bureau)
  • U.S. Markets to Watch in 2018 – Overall Real Estate Prospects: Ranked #9 (PWC)
  • U.S. Markets to Watch in 2018 – Homebuilding Prospects: Ranked #11 (PWC)
  • Local Economy: Ranked #3 in the U.S. (PWC)
  • Investor Demand in 2018: Ranked #5 in the country (PWC)
  • Top 9 Real Estate Markets to Watch in 2018 (Curbed)
  • 10 Hottest Housing Markets of 2018 – Ranked #8 (Business Insider)
  • Fastest Growing Cities in the U.S. – Large Cities: Ranked #5 (WalletHub)
  • 10 U.S. Housing Markets That Will Rule 2018: Ranked #9 (Realtor.com)
  • 10 U.S. Cities with Huge Increases in Homeownership: Ranked #8 (Realtor.com)
  • Best Places for First-Time Home Buyers – Large Cities: Ranked #8 (WalletHub)

Orlando, Florida

Orlando, FL | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Orlando Real Estate Market Statistics

  • Population: 277,198 (City Data, 2016)
  • Population growth: 16.31% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 29% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 18.0% (PWC, 2017)
  • 5-year job growth: 112.3% (PWC, 2017)
  • Median home sale price: $211,900 (Zillow, 10/2017)
  • Home price growth: 2.7% (PWC, 2017)
  • Home affordability index: 137.7 (PWC, 2017)
  • 3-year projected household growth: 12.3% (PWC, 2017)
  • Rent as % of household income: 24.2% (PWC, 2017)
  • Median rent – 1-bedroom units: $1020 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $1230 (Apartment List, 1/2018)
  • Year-over-year rent growth: 6.8% (Apartment List, 1/2018)

Expert Opinions on Orlando’s Real Estate Market

  • Top Destination Markets for Migration from Primary Markets (2011-2015): Ranked #15 (PWC/U.S. Census Bureau)
  • U.S. Markets to Watch in 2018 – Overall Real Estate Prospects: Ranked #16 (PWC)
  • U.S. Markets to Watch in 2018 – Homebuilding Prospects: Ranked #13 (PWC)
  • Local Economy: Ranked #19 in the U.S. (PWC)
  • Investor Demand in 2018: Ranked #22 in the country (PWC)
  • Fastest Growing Cities in the U.S. – Large Cities: Ranked #15 (WalletHub)
  • Best Places for First-Time Home Buyers – Mid-Sized Cities: Ranked #21 (WalletHub)

Portland, Oregon

Portland, OR | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Portland Real Estate Market Statistics

  • Population: 639,635 (City Data, 2016)
  • Population growth: 9.61% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 27% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 12.1% (PWC, 2017)
  • 5-year job growth: 113.1% (PWC, 2017)
  • Median home sale price: $357,300 (Zillow, 10/2017)
  • Home price growth: 2.9% (PWC, 2017)
  • Home affordability index: 111.1 (PWC, 2017)
  • 3-year projected household growth: 5.7% (PWC, 2017)
  • Rent as % of household income: 20.7% (PWC, 2017)
  • Median rent – 1-bedroom units: $1120 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $1320 (Apartment List, 1/2018)
  • Year-over-year rent growth: -1.6% (Apartment List, 1/2018)

Expert Opinions on Portland’s Real Estate Market

  • Top Destination Markets for Migration from Primary Markets (2011-2015): Ranked #19 (PWC/U.S. Census Bureau)
  • U.S. Markets to Watch in 2018 – Overall Real Estate Prospects: Ranked #13 (PWC)
  • U.S. Markets to Watch in 2018 – Homebuilding Prospects: Ranked #23 (PWC)
  • Local Economy: Ranked #13 in the U.S. (PWC)
  • Top Multifamily Property Investment Prospects: Ranked #11 in the country (PWC)
  • Investor Demand in 2018: Ranked #11 in the country (PWC)
  • Top 9 Real Estate Markets to Watch in 2018 (Curbed)
  • 10 Hottest Housing Markets of 2018 – Ranked #9 (Business Insider)
  • Fastest Growing Cities in the U.S. – Large Cities: Ranked #18 (WalletHub)
  • U.S. Cities with the Highest Rent Growth: Ranked #4 (Business Insider)

Raleigh, North Carolina

Raleigh, NC | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Raleigh Real Estate Market Statistics

  • Population: 458,862 (City Data, 2016)
  • Population growth: 13.61% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 28% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 15.4% (PWC, 2017)
  • 5-year job growth: 110.8% (PWC, 2017)
  • Median home sale price: $251,800 (Zillow, 10/2017)
  • Home price growth: 1.4% (PWC, 2017)
  • Home affordability index: 173.5 (PWC, 2017)
  • 3-year projected household growth: 9.2% (PWC, 2017)
  • Rent as % of household income: 19.0% (PWC, 2017)
  • Median rent – 1-bedroom units: $960 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $1110 (Apartment List, 1/2018)
  • Year-over-year rent growth: 2.6% (Apartment List, 1/2018)

Expert Opinions on Raleigh’s Real Estate Market

  • Top Destination Markets for Migration from Primary Markets (2011-2015): Ranked #16 (PWC/U.S. Census Bureau)
  • U.S. Markets to Watch in 2018 – Overall Real Estate Prospects: Ranked #4 (PWC)
  • U.S. Markets to Watch in 2018 – Homebuilding Prospects: Ranked #15 (PWC)
  • Local Economy: Ranked #8 in the U.S. (PWC)
  • Investor Demand in 2018: Ranked #12 in the country (PWC)
  • Top 9 Real Estate Markets to Watch in 2018 (Curbed)
  • 10 Hottest Housing Markets of 2018 – Ranked #2 (Business Insider)
  • Fastest Growing Cities in the U.S. – Large Cities: Ranked #10 (WalletHub)
  • Best Places for First-Time Home Buyers – Large Cities: Ranked #1 (WalletHub)

San Antonio, Texas

San Antonio, TX | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

San Antonio Real Estate Market Statistics

  • Population: 1,492,494 (City Data, 2016)
  • Population growth: 12.44% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 29% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 6.6% (PWC, 2017)
  • 5-year job growth: 106.5% (PWC, 2017)
  • Median home sale price: $199,900 (Zillow, 10/2017)
  • Home price growth: 1.1% (PWC, 2017)
  • Home affordability index: 160.9 (PWC, 2017)
  • 3-year projected household growth: 5.5% (PWC, 2017)
  • Rent as % of household income: 18.9% (PWC, 2017)
  • Median rent – 1-bedroom units: $830 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $1040 (Apartment List, 1/2018)
  • Year-over-year rent growth: 1.6% (Apartment List, 1/2018)

Expert Opinions on San Antonio’s Real Estate Market

  • U.S. Markets to Watch in 2018 – Overall Real Estate Prospects: Ranked #18 (PWC)
  • Local Economy: Ranked #29 in the U.S. (PWC)
  • Fastest Growing Cities in the U.S. – Large Cities: Ranked #16 (WalletHub)
  • Best Places for First-Time Home Buyers – Large Cities: Ranked #27 (WalletHub)

Tampa, Florida

Tampa, FL | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Tampa Real Estate Market Statistics

  • Population: 377,172 (City Data, 2016)
  • Population growth: 12.35% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 24% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 10.0% (PWC, 2017)
  • 5-year job growth: 106.2% (PWC, 2017)
  • Median home sale price: $183,800 (Zillow, 10/2017)
  • Home price growth: 2.7% (PWC, 2017)
  • Home affordability index: 150.7 (PWC, 2017)
  • 3-year projected household growth: 6.9% (PWC, 2017)
  • Rent as % of household income: 23.0% (PWC, 2017)
  • Median rent – 1-bedroom units: $980 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $1220 (Apartment List, 1/2018)
  • Year-over-year rent growth: 6.2% (Apartment List, 1/2018)

Expert Opinions on Tampa’s Real Estate Market

  • Top Destination Markets for Migration from Primary Markets (2011-2015): Ranked #14 (PWC/U.S. Census Bureau)
  • U.S. Markets to Watch in 2018 – Overall Real Estate Prospects: Ranked #19 (PWC)
  • U.S. Markets to Watch in 2018 – Homebuilding Prospects: Ranked #24 (PWC)
  • Local Economy: Ranked #20 in the U.S. (PWC)
  • Top Multifamily Property Investment Prospects: Ranked #5 in the country (PWC)
  • Investor Demand in 2018: Ranked #23 in the country (PWC)
  • Fastest Growing Cities in the U.S. – Large Cities: Ranked #14 (WalletHub)
  • U.S. Cities with the Highest Rent Growth: Ranked #9 (Business Insider)
  • Best Places for First-Time Home Buyers – Large Cities: Ranked #4 (WalletHub)
On the #BuildiumBlog: 24 cities that present growth opportunities for property managers in 2018! Click To Tweet

Which Secondary Markets Are Good Investments in 2018?

Tier II: Up-and-Coming Markets

Boise, Idaho

Boise, ID | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Boise Real Estate Market Statistics

  • Population: 223,152 (City Data, 2016)
  • Population growth: 8.50% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 26% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 3.8% (PWC, 2017)
  • 5-year job growth: 114.9% (PWC, 2017)
  • Median home sale price: $238,900 (Zillow, 10/2017)
  • Home price growth: 2.4% (PWC, 2017)
  • Home affordability index: 158.8 (PWC, 2017)
  • 3-year projected household growth: 7.3% (PWC, 2017)
  • Rent as % of household income: 19.0% (PWC, 2017)
  • Median rent – 1-bedroom units: $710 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $910 (Apartment List, 1/2018)
  • Year-over-year rent growth: 5.9% (Apartment List, 1/2018)

Expert Opinions on Boise’s Real Estate Market

  • Local Economy: Ranked #22 in the U.S. (PWC)
  • Top Multifamily Property Investment Prospects: Ranked #4 in the country (PWC)
  • Fastest Growing Cities in the U.S. – Mid-Sized Cities: Ranked #72 (WalletHub)
  • Best Places for First-Time Home Buyers – Mid-Sized Cities: Ranked #4 (WalletHub)

Colorado Springs, Colorado

Colorado Springs, CO | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Colorado Springs Real Estate Market Statistics

  • Population: 465,084 (City Data, 2016)
  • Population growth: 11.69% (Wikipedia, 2010 to 2016)
  • Median home sale price: $258,000 (Zillow, 10/2017)
  • Median rent – 1-bedroom units: $940 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $1210 (Apartment List, 1/2018)
  • Year-over-year rent growth: 4.3% (Apartment List, 1/2018)

Expert Opinions on Colorado Springs’ Real Estate Market

  • Fastest Growing Cities in the U.S. – Large Cities: Ranked #20 (WalletHub)
  • Hottest Markets of 2017: Ranked #8 (Realtor.com)
  • 10 U.S. Housing Markets That Will Rule 2018: Ranked #8 (Realtor.com)
  • Best Places for First-Time Home Buyers – Large Cities: Ranked #3 (WalletHub)

Columbus, Ohio

Columbus, OH | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Columbus Real Estate Market Statistics

  • Population: 862,643 (City Data, 2016)
  • Population growth: 9.28% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 29% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 7.0% (PWC, 2017)
  • 5-year job growth: 117.4% (PWC, 2017)
  • Median home sale price: $166,800 (Zillow, 10/2017)
  • Home price growth: 1.9% (PWC, 2017)
  • Home affordability index: 208.9 (PWC, 2017)
  • 3-year projected household growth: 4.5% (PWC, 2017)
  • Rent as % of household income: 15.7% (PWC, 2017)
  • Median rent – 1-bedroom units: $740 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $960 (Apartment List, 1/2018)
  • Year-over-year rent growth: -0.1% (Apartment List, 1/2018)

Expert Opinions on Columbus’ Real Estate Market

  • U.S. Markets to Watch in 2018 – Homebuilding Prospects: Ranked #18 (PWC)
  • Local Economy: Ranked #27 in the U.S. (PWC)
  • Top Multifamily Property Investment Prospects: Ranked #19 in the country (PWC)
  • Fastest Growing Cities in the U.S. – Large Cities: Ranked #26 (WalletHub)
  • Hottest Markets of 2017: Ranked #7 (Realtor.com)

Jacksonville, Florida

Jacksonville, FL | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Jacksonville Real Estate Market Statistics

  • Population: 880,623 (City Data, 2016)
  • Population growth: 7.16% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 27% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 10.7% (PWC, 2017)
  • 5-year job growth: 114.1% (PWC, 2017)
  • Median home sale price: $173,500 (Zillow, 10/2017)
  • Home price growth: 2.7% (PWC, 2017)
  • Home affordability index: 160.2 (PWC, 2017)
  • 3-year projected household growth: 7.2% (PWC, 2017)
  • Rent as % of household income: 18.6% (PWC, 2017)
  • Median rent – 1-bedroom units: $860 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $1050 (Apartment List, 1/2018)
  • Year-over-year rent growth: 4.5% (Apartment List, 1/2018)

Expert Opinions on Jacksonville’s Real Estate Market

  • Fastest Growing Cities in the U.S. – Large Cities: Ranked #30 (WalletHub)
  • Best Places for First-Time Home Buyers – Large Cities: Ranked #23 (WalletHub)

Las Vegas, Nevada

Las Vegas, NV | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Las Vegas Real Estate Market Statistics

  • Population: 632,916 (City Data, 2016)
  • Population growth: 8.42% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 27% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 17.4% (PWC, 2017)
  • 5-year job growth: 108.4% (PWC, 2017)
  • Median home sale price: $245,800 (Zillow, 10/2017)
  • Home price growth: 2.2% (PWC, 2017)
  • Home affordability index: 132.2 (PWC, 2017)
  • 3-year projected household growth: 8.7% (PWC, 2017)
  • Rent as % of household income: 19.9% (PWC, 2017)
  • Median rent – 1-bedroom units: $890 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $1110 (Apartment List, 1/2018)
  • Year-over-year rent growth: 4.4% (Apartment List, 1/2018)

Expert Opinions on Las Vegas’ Real Estate Market

  • U.S. Markets to Watch in 2018 – Homebuilding Prospects: Ranked #27 (PWC)
  • Fastest Growing Cities in the U.S. – Large Cities: Ranked #21 (WalletHub)
  • U.S. Cities with the Highest Rent Growth: Ranked #1 (Business Insider)
  • 10 U.S. Housing Markets That Will Rule 2018: Ranked #1 (Realtor.com)
  • Best Places for First-Time Home Buyers – Large Cities: Ranked #22 (WalletHub)

Minneapolis, Minnesota

Minneapolis, MN | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Minneapolis Real Estate Market Statistics

  • Population: 413,645 (City Data, 2016)
  • Population growth: 8.12% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 27% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 6.5% (PWC, 2017)
  • 5-year job growth: 137.0% (PWC, 2017)
  • Median home sale price: $239,300 (Zillow, 10/2017)
  • Home price growth: 3.1% (PWC, 2017)
  • Home affordability index: 180.4 (PWC, 2017)
  • 3-year projected household growth: 4.4% (PWC, 2017)
  • Rent as % of household income: 18.1% (PWC, 2017)
  • Median rent – 1-bedroom units: $890 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $1130 (Apartment List, 1/2018)
  • Year-over-year rent growth: 1.5% (Apartment List, 1/2018)

Expert Opinions on Minneapolis’ Real Estate Market

  • U.S. Markets to Watch in 2018 – Overall Real Estate Prospects: Ranked #25 (PWC)
  • Local Economy: Ranked #18 in the U.S. (PWC)
  • Top Multifamily Property Investment Prospects: Ranked #20 in the country (PWC)
  • Investor Demand in 2018: Ranked #26 in the country (PWC)
  • U.S. Cities with the Highest Rent Growth: Ranked #2 (Business Insider)
  • Best Places for First-Time Home Buyers – Large Cities: Ranked #13 (WalletHub)

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Phoenix, Arizona

Phoenix, AZ | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Phoenix Real Estate Market Statistics

  • Population: 1,615,041 (City Data, 2016)
  • Population growth: 11.72% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 27% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 10.8% (PWC, 2017)
  • 5-year job growth: 125.9% (PWC, 2017)
  • Median home sale price: $238,500 (Zillow, 10/2017)
  • Home price growth: 2.1% (PWC, 2017)
  • Home affordability index: 142.6 (PWC, 2017)
  • 3-year projected household growth: 7.4% (PWC, 2017)
  • Rent as % of household income: 17.7% (PWC, 2017)
  • Median rent – 1-bedroom units: $820 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $1020 (Apartment List, 1/2018)
  • Year-over-year rent growth: 3.8% (Apartment List, 1/2018)

Expert Opinions on Phoenix’s Real Estate Market

  • Top Destination Markets for Migration from Primary Markets (2011-2015): Ranked #7 (PWC/U.S. Census Bureau)
  • U.S. Markets to Watch in 2018 – Overall Real Estate Prospects: Ranked #34 (PWC)
  • U.S. Markets to Watch in 2018 – Homebuilding Prospects: Ranked #33 (PWC)
  • Local Economy: Ranked #28 in the U.S. (PWC)
  • Investor Demand in 2018: Ranked #33 in the country (PWC)
  • Fastest Growing Cities in the U.S. – Large Cities: Ranked #19 (WalletHub)
  • U.S. Cities with the Highest Rent Growth: Ranked #6 (Business Insider)
  • Best Places for First-Time Home Buyers – Large Cities: Ranked #20 (WalletHub)

Riverside, California

Riverside & San Bernardino, CA | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Riverside Real Estate Market Statistics

  • Population: 324,727 (City Data, 2016)
  • Population growth: 6.86% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 29% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: -1.3% (PWC, 2017)
  • 5-year job growth: 113.4% (PWC, 2017)
  • Median home sale price: $335,300 (Zillow, 10/2017)
  • Home price growth: 4.0% (PWC, 2017)
  • Home affordability index: 99.2 (PWC, 2017)
  • 3-year projected household growth: 2.9% (PWC, 2017)
  • Rent as % of household income: 25.8% (PWC, 2017)
  • Median rent – 1-bedroom units: $1050 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $1310 (Apartment List, 1/2018)
  • Year-over-year rent growth: 6.3% (Apartment List, 1/2018)

Expert Opinions on Riverside’s Real Estate Market

  • Top Destination Markets for Migration from Primary Markets (2011-2015): Ranked #1 (PWC/U.S. Census Bureau)
  • Investor Demand in 2018: Ranked #25 in the country (PWC)
  • Fastest Growing Cities in the U.S. – Large Cities: Ranked #22 (WalletHub)

Sacramento, California

Sacramento, CA | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Sacramento Real Estate Market Statistics

  • Population: 495,200 (City Data, 2016)
  • Population growth: 6.16% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 27% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 3.8% (PWC, 2017)
  • 5-year job growth: 112.6% (PWC, 2017)
  • Median home sale price: $368,800 (Zillow, 10/2017)
  • Home price growth: 6.7% (PWC, 2017)
  • Home affordability index: 120.4 (PWC, 2017)
  • 3-year projected household growth: 3.7% (PWC, 2017)
  • Rent as % of household income: 21.5% (PWC, 2017)
  • Median rent – 1-bedroom units: $940 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $1190 (Apartment List, 1/2018)
  • Year-over-year rent growth: 9.3% (Apartment List, 1/2018)

Expert Opinions on Sacramento’s Real Estate Market

  • Top Destination Markets for Migration from Primary Markets (2011-2015): Ranked #11 (PWC/U.S. Census Bureau)
  • Top Multifamily Property Investment Prospects: Ranked #17 in the country (PWC)
  • Fastest Growing Cities in the U.S. – Large Cities: Ranked #28 (WalletHub)
  • Hottest Markets of 2017: Ranked #4 (Realtor.com)
  • U.S. Cities with the Highest Rent Growth: Ranked #7 (Business Insider)
  • Best Places for First-Time Home Buyers – Large Cities: Ranked #29 (WalletHub)

Salt Lake City, Utah

Salt Lake City, UT | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Salt Lake City Real Estate Market Statistics

  • Population: 193,776 (City Data, 2016)
  • Population growth: 3.92% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 30% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 8.7% (PWC, 2017)
  • 5-year job growth: 102.1% (PWC, 2017)
  • Median home sale price: $286,200 (Zillow, 10/2017)
  • Home price growth: 2.6% (PWC, 2017)
  • Home affordability index: 139.0 (PWC, 2017)
  • 3-year projected household growth: 5.2% (PWC, 2017)
  • Rent as % of household income: 16.7% (PWC, 2017)
  • Median rent – 1-bedroom units: $840 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $1050 (Apartment List, 1/2018)
  • Year-over-year rent growth: 6.3% (Apartment List, 1/2018)

Expert Opinions on Salt Lake City’s Real Estate Market

  • U.S. Markets to Watch in 2018 – Overall Real Estate Prospects: Ranked #3 (PWC)
  • U.S. Markets to Watch in 2018 – Homebuilding Prospects: Ranked #4 (PWC)
  • Local Economy: Ranked #10 in the U.S. (PWC)
  • Top Multifamily Property Investment Prospects: Ranked #2 in the country (PWC)
  • Investor Demand in 2018: Ranked #27 in the country (PWC)
  • Top 9 Real Estate Markets to Watch in 2018 (Curbed)
  • 10 U.S. Housing Markets That Will Rule 2018: Ranked #6 (Realtor.com)
  • Best Places for First-Time Home Buyers – Mid-Sized Cities: Ranked #16 (WalletHub)

San Diego, California

San Diego, CA | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

San Diego Real Estate Market Statistics

  • Population: 1,406,622 (City Data, 2016)
  • Population growth: 7.59% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 30% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 5.5% (PWC, 2017)
  • 5-year job growth: 119.8% (PWC, 2017)
  • Median home sale price: $528,200 (Zillow, 10/2017)
  • Home price growth: 5.0% (PWC, 2017)
  • Home affordability index: 70.8 (PWC, 2017)
  • 3-year projected household growth: 3.7% (PWC, 2017)
  • Rent as % of household income: 26.7% (PWC, 2017)
  • Median rent – 1-bedroom units: $1540 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $1990 (Apartment List, 1/2018)
  • Year-over-year rent growth: 3.3% (Apartment List, 1/2018)

Expert Opinions on San Diego’s Real Estate Market

  • Top Destination Markets for Migration from Primary Markets (2011-2015): Ranked #5 (PWC/U.S. Census Bureau)
  • U.S. Markets to Watch in 2018 – Overall Real Estate Prospects: Ranked #32 (PWC)
  • Local Economy: Ranked #16 in the U.S. (PWC)
  • Top Multifamily Property Investment Prospects: Ranked #6 in the country (PWC)
  • Investor Demand in 2018: Ranked #18 in the country (PWC)
  • Fastest Growing Cities in the U.S. – Large Cities: Ranked #29 (WalletHub)
  • Hottest Markets of 2017: Ranked #6 (Realtor.com)
  • U.S. Cities with the Highest Rent Growth: Ranked #8 (Business Insider)

San Jose, California

San Jose, CA | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

San Jose Real Estate Market Statistics

  • Population: 1,025,373 (City Data, 2016)
  • Population growth: 8.39% (Wikipedia, 2010 to 2016)
  • Population – ages 15 to 34: 28% (PWC, 2017)
  • 5-year population growth – ages 15 to 34: 9.4% (PWC, 2017)
  • 5-year job growth: 113.4% (PWC, 2017)
  • Median home sale price: $996,800 (Zillow, 10/2017)
  • Home price growth: 5.9% (PWC, 2017)
  • Home affordability index: 56.5 (PWC, 2017)
  • 3-year projected household growth: 2.5% (PWC, 2017)
  • Rent as % of household income: 26.3% (PWC, 2017)
  • Median rent – 1-bedroom units: $2020 (Apartment List, 1/2018)
  • Median rent – 2-bedroom units: $2530 (Apartment List, 1/2018)
  • Year-over-year rent growth: 2.7% (Apartment List, 1/2018)

Expert Opinions on San Jose’s Real Estate Market

  • Top Destination Markets for Migration from Primary Markets (2011-2015): Ranked #6 (PWC/U.S. Census Bureau)
  • U.S. Markets to Watch in 2018 – Overall Real Estate Prospects: Ranked #8 (PWC)
  • U.S. Markets to Watch in 2018 – Homebuilding Prospects: Ranked #32 (PWC)
  • Local Economy: Ranked #9 in the U.S. (PWC)
  • Top Multifamily Property Investment Prospects: Ranked #18 in the country (PWC)
  • Investor Demand in 2018: Ranked #10 in the country (PWC)
  • Fastest Growing Cities in the U.S. – Large Cities: Ranked #6 (WalletHub)
  • Hottest Markets of 2017: Ranked #3 (Realtor.com)
  • 10 Hottest Housing Markets of 2018 – Ranked #1 (Business Insider)
Secondary markets: What do property managers + investors need to know? Find out on the #BuildiumBlog! Click To Tweet

How Do Secondary Markets Stack Up?

How do secondary markets compare to the rest of the country in terms of their population growth, job growth, affordability, and more?

Population Growth

In 2016, the U.S. population was 323.1 million. Between 2010 and 2016, the country’s population grew at a rate of 0.75%.

In contrast, the population in the secondary markets on our list grew significantly faster between 2010 and 2016 than the population did nationwide. In our Tier I cities, the average population growth rate was 13.4%. In Tier II cities, it was 8.2%.

The top 5 fastest-growing cities on our list were:

  1. Austin, TX – 19.9% population growth
  2. Orlando, FL – 16.3%
  3. Denver, CO – 15.5%
  4. Charlotte, NC – 15.1%
  5. Raleigh, NC – 13.6%

Population: 15 to 34 Years Old

In 2017, the percentage of the U.S. population between the ages of 15 and 34 was 27%.

The proportion of 15- to 34-year-olds in the general population was about the same in the secondary markets on our list as it was nationwide. About 28% of the population of our Tier I and Tier II cities is comprised of 15- to 34-year-olds.

The youngest cities on our list were:

  1. Austin, TX – 31% of the population is between the ages of 15 and 34
  2. Salt Lake City, UT & San Diego, CA – 30% (tie)
  3. Charleston, SC; Columbus, OHOrlando, FLRiverside, CA & San Antonio, TX – 29% (5-way tie)

Population Growth: 15 to 34 Years Old

Over the last 5 years, the population of 15- to 34-year-olds increased by 2.6% nationwide.

Meanwhile, in the Tier I cities on our list, the population of 15- to 34-year-olds increased by an average of 12.8% over the last 5 years. In Tier II cities, it grew by 7.5%.

The top 5 cities on our list with the fastest-growing population of 15- to 34-year-olds were:

  1. Austin, TX – 20.3% growth in the population of 15- to 34-year-olds
  2. Orlando, FL – 18.0%
  3. Las Vegas, NV – 17.4%
  4. Raleigh, NC – 15.4%
  5. Charlotte, NC – 15.3%

Job Growth

Across the U.S., jobs grew at a rate of 109.2% over the last 5 years.

The 5-year job growth rate was slightly higher in the secondary markets on our list than it was nationwide. In our Tier I cities, jobs grew by an average of 114.7%; while in Tier II cities, they grew by an average of 116.3%.

The top 5 cities on our list with the most significant job growth were:

  1. Minneapolis, MNAustin, TX – 137.0% job growth (tie)
  2. Dallas, TXPhoenix, AZ – 125.9% (tie)
  3. Denver, CO – 121.3%

Median Home Sale Price

In October 2017, the median sale price for homes in the U.S. was $226,800.

The cities on our list had slightly higher median home sale prices than the nationwide average. Our Tier I cities had a median home price of $240,400; and our Tier II cities had a median price of $251,900.

On our list, 4 of the top 5 most expensive cities for homebuyers were all located in California:

  1. San Jose, CA – $996,800 median home sale price
  2. San Diego, CA – $528,200
  3. Sacramento, CA – $368,800
  4. Portland, OR – $357,300
  5. Riverside, CA – $335,300

The top 5 most affordable places to buy homes on our list were:

  1. Columbus, OH – $166,800 median home sale price
  2. Jacksonville, FL – $173,500
  3. Tampa, FL – $183,800
  4. San Antonio, TX – $199,900
  5. Charlotte, NC – $200,000

San Diego, CA | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

Home Price Growth

Across the country, home prices grew by an average of 3% in 2017.

In the secondary markets in Tier I of our list, home prices grew more slowly over the last year than they did nationwide: The average home price rate was 1.7%. In our Tier II cities, however, they grew slightly faster than they did nationwide, with an average home price rate of 3.5%.

4 of the top 5 cities on our list where home prices grew the fastest were in California—suggesting that while prices are lower in these cities than in San Francisco, they may not be for long:

  1. Sacramento, CA – 6.7%
  2. San Jose, CA – 5.9%
  3. San Diego, CA – 5.0%
  4. Riverside, CA – 4.0%
  5. Minneapolis, MN – 3.1%

The 5 cities on our list where home prices grew the slowest were:

  1. Austin, TX – 0.6%
  2. Charlotte, NC – 0.7%
  3. San Antonio, TX – 1.1%
  4. Raleigh, NCCharleston, SC – 1.4% (tie)

Home Affordability Index

On the home affordability index, a score of 100 means that a family earning the median income in a particular area has exactly the amount they need to afford a mortgage on a home selling for the median price, including a 20% down payment. A score above 100 means that they have more than enough income to afford a home, including a 20% down payment.

In the U.S., the national home affordability index in 2017 was 153.9. This means that nationwide, a family earning the median income has 153.9% of the income they need to get a mortgage on a home at the median price, including a 20% down payment.

On average, across the secondary markets on our list, the home affordability index was 140.3 for Tier I cities, and 133.5 for Tier II cities. Many cities on our list were more affordable than the national home affordability index, including:

  1. Columbus, OH – 208.9 home affordability index
  2. Minneapolis, MN – 180.4
  3. Raleigh, NC – 173.5
  4. Charlotte, NC – 163.0
  5. San Antonio, TX – 160.9
  6. Jacksonville, FL – 160.2
  7. Boise, ID – 158.8

The only cities with home affordability indexes far below 100 were:

  1. San Jose, CA – 56.5 home affordability index
  2. San Diego, CA – 70.8
  3. Miami, FL – 77.7

This means that for all but 3 of the cities on our list, a family earning the median income can afford a home at the median price, including a 20% down payment.

Household Growth

The number of households across the country is expected to grow by 3.7% over the next 3 years.

In the next 3 years, households are expected to form at a faster rate in the secondary markets on our list than in the rest of the country. In our Tier I cities, the number of households are expected to increase at an average rate of 7.2%; while in Tier II cities, households will increase at a rate of 5.2%.

The 5 cities on our list where households are projected to grow at the fastest rate were:

  1. Orlando, FL – 12.3% projected growth
  2. Raleigh, NC – 9.2%
  3. Charlotte, NCAustin, TX; & Las Vegas, NV – 8.7% (3- way tie)

 

Rent as a Share of Household Income

For the average American household in 2017, 26.6% of their income was devoted to rent.

On average, rent consumes a smaller portion of residents’ incomes in the secondary markets on our list than in the rest of the country. On average, in our Tier I cities, 21.9% of household income goes toward rent; while in our Tier II cities, 20.5% of their income is reserved for rent.

The 5 cities on our list with the lowest rent-to-household-income ratio were:

  1. Columbus, OH – 15.7% rent-to-household-income ratio
  2. Salt Lake City, UT – 16.7%
  3. Phoenix, AZ – 17.7%
  4. Minneapolis, MN – 18.1%
  5. Jacksonville, FL – 18.6%

Charlotte, NC | Secondary Markets: 24 Cities to Watch in 2018 | Buildium

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If you liked this post, there are two other pieces of content that you won’t want to miss:

Are there any markets whose growth you’re keeping an eye on in 2018? How do you plan on growing your business? We look forward to hearing your thoughts in the comments!

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Robin Young

Robin Young

As Buildium's Senior Researcher & Content Manager, Robin is the force behind the company's primary research and thought leadership content. She holds degrees in psychology, sociology, and songwriting. In her free time, you can find her perfecting her lifestyle blog, Feather & Flint; writing articles for WordPress and Thrive Global; and working on her first novel.

  • http://www.bonnaire.us Claudia M Gallegos

    Robin, the population of Miami is 2,693,117.
    This incorrect information makes me disbelieve your article.

    • Buildium

      Hi Claudia, thanks for reaching out with this information. I just cross-checked my source, City Data, with the U.S. Census Bureau and a number of other trustworthy sources. The 453K+ number is the population of the city of Miami; while the 2M+ number is the population of Miami-Dade County. Here is the U.S. Census Bureau’s website: https://www.census.gov/quickfacts/fact/table/miamicityflorida,miamidadecountyflorida/PST045216
      I appreciate you reaching out with this information. It’s great to know that someone is reading this article so closely! I just want to let you know that my responsibility to provide property managers with accurate, helpful information is not something that I take lightly. That’s why I synthesized hundreds of sources over months of research in order to develop this list for the benefit of the Buildium Blog’s incredible readers. So you can trust the veracity of the information provided here.
      Thanks again, and I truly hope that this article is helpful to you!
      Robin

      • http://www.bonnaire.us Claudia M Gallegos

        Thinking that Miami is a secondary market is an error. One of the most serious problems you find in most areas is gentrification, as old buildings are being taken over by developers. Miami has very few areas left to be converted as a great amount of the areas were already sold to developers and investors, which are part of development groups. I live in Miami since 1998 and it is a daily event.

        • Buildium

          Hi Claudia,
          Though there is disagreement over which cities are considered secondary vs. tertiary markets, there is widespread agreement over which cities are primary markets. Real estate experts agree that the primary markets are New York City, San Francisco, Boston, Los Angeles, Washington D.C., and Chicago. It can be confusing, because obviously there are many thriving cities in the U.S. besides these 6. However, in terms of the volume of transactions, the population, and the size of their impact on the country’s economy, these 6 cities are in a class of their own. That’s why real estate experts call Miami (as well as other massive cities with thriving real estate markets like Dallas, Austin, Charlotte, Orlando, Denver, Nashville, etc.) a secondary market.
          Robin

[0-9]
[0-9]
[name="_email_address"]
[name="_email_address"]