The Best (And Worst) Real Estate Markets (According to New Data…)

Not so long ago the best markets for investing were easy to find: just go where the foreclosures are. With foreclosures falling 30 percent a year and more for the last several years and well-funded institutional investors gobbling up everything available, these days small investors need a little more help to find where the deals are.

Lately some of the nation’s top data providers have been battling for investors’ attention—and dollars—with listings of “best markets” for investing. These are selected by a variety criteria—you can decide for yourself which best fits your business model.

Last June, David Hicks, co-president of HomeVestors of America, the nation’s largest buyer of houses in the U.S, released the quarterly ranking by HomeVestors and Local Market Monitor based on the factors that affect the demand for housing and therefore affect home prices. The potential for price increases is the investment opportunity, the potential for price decreases or stagnation is the investment risk. The list of 100 top housing markets in the U.S contained only one market-Providence, Rhode Island—that Hicks categorized as “dangerous” for investors.

Markets can be ranked as “low risk,” “medium risk,” “speculative” and “dangerous” depending on their numerical score of minus-ten to plus-ten based on population, job growth, unemployment, home price changes, the market’s equilibrium home price and the 12-month home price forecast.