Investment Outlook: Top Real Estate Markets For 2018

Investment Outlook: Top Real Estate Markets For 2018

What does the new real estate investment landscape look like in 2017? Where are the best real estate markets to invest in now?

Expectations are that this will be an exciting year in the U.S. real estate industry. There are many potential changes in the air which could impact the property market and portfolios. While the new surge in confidence is needed and welcomed, experienced investors know that where you invest still matters. So, what factors are likely to impact the markets in the months ahead? Where are some of the top destinations for investing in real estate in 2017?

2017 Market Influencers

A revival of confidence in the economy in the wake of the presidential election appears to be the main driving factor in 2017. Love or hate him; the new president of the United States appears to have inspired new confidence and optimism on all fronts. The Dow Jones surged and looked set to break 20,000, though appears to now be hampered by the basic math of current stock prices. In December, the National Association of Home Builders Housing Market Index, which measures market sentiment on single family home sales hit its highest level since 2005. Several major automakers have announced new plans to expand plants and jobs in the U.S. At the individual and consumer level this confidence is no doubt spurring spending and purchases. Though we will have to wait for the trailing data and indexes to catch up in order to fully and accurately quantify the impact.

Trump has made many pledges about tax reform, and repealing regulations such as the Dodd-Frank Act, and major new infrastructure investments. Again, we’ll have to wait and see what actually happens, though Trump’s strong arm tactics against auto manufacturers seem to suggest that he will get his way on many fronts. Two of the most significant parts of the new White House administration’s posed agenda will be wage growth, and access to borrowing.

One thing we can almost count on for certain in 2017 is higher interest rates. The Fed has projected the potential need for 3 or more increases this year. That can be both a positive and negative. For real estate investors this certainly means there is an advantage in moving early. Those looking to bulk up their portfolios, or to shift more of their portfolios into real estate will lock in the best spreads by acting swiftly before higher rates hit.

Early movers will also benefit by locking in value before asset prices continue to rise, and affordability issues cramp cap rate potential. New job and wage growth could offset some affordability concerns, and accelerate price growth faster than anticipated, especially in already hot markets. Still, wise investors seeking optimal returns, safety, and long term passive income cash flow should remain selective in the destinations they enter in 2017.

Three Top Real Estate Markets to Watch in 2017


Orlando, Florida continues to be one of the world’s most loved and famous destination cities. That’s unlikely to change anytime soon. It offers a wealth of entertainment, and Florida weather, along with consistently being the beneficiary of mountains of outside capital and spending. According to the latest data from the Orlando Regional Realtor Association it remains one of the healthiest markets in the U.S., with many metrics tracking in reverse of the rest of the country.

Quick Stats:

  • Median Price $207,900
  • Price Increase Y-O-Y +12%
  • Inventory -19%
  • New Contracts +11%

Orlando continues to be a strong play for income and future appreciation, along with downside protection.

Chicago, IL

While still one of America’s most famous metros, Chicago has been amongst one of the last to recover. Like parts of New York, Chicago has still had a number of dragging foreclosure sales. However, this also positions the city as one of the best value buys for real estate investors in 2017. Forecasts by the National Association of Realtors has projected the city will continue with slow growth this year. Yet, the Illinois state association of Realtors has forecast a far more robust year of recovery and gains.

  • Median Price Change Projected 2017 +3.8 – 8.4%
  • Sale Volume Forecast 2017 -3.5 – +9.21%
  • Median Sales Price $248,000 
  • Median Rent $1,500
  • Homeownership Rate 45%

Memphis, TN

Memphis, Tennessee continues to offer real estate investors a stable and growing income property destination. With all eyes on affordability, Memphis could be a smart play for both cash flow and growth in 2017.

The latest numbers from the Memphis Area Association of Realtors and Zillow Show:

  • Median Home Value: $78,600
  • Median List Price Sq Ft $53
  • Median Rent $895
  • Growth Forecast 2017 +5.1%
  • Sales Volume Growth Y-O-Y 13.4% to almost $3B


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