A three-year study of buyers’ returns identified 10 US cities with the highest-yield real estate, 4 Florida cities among them

A three-year study of buyers’ returns identified 10 US cities with the highest-yield real estate, 4 Florida cities among them

Many buyers of American real estate saw high returns from 2019 to 2021. Those who invested in residential properties in ten cities featured in a rating by Redfin, four of them in Florida, achieved the most impressive performance. Buyers’ returns grew by 6.8% nationwide, hovering around 17% in these cities.

Boise, Idaho, was at the top of the list. Buyers of local real estate saw an average return of USD 98,000 in 2021, which is 24.1% higher than in 2019. The rating based on the three-year study is as follows:

  1. Boise, Idaho: 24.1% higher returns, up to USD 98,000 (housing prices grew by 53%).
  2. Austin, Texas: 19.1% higher returns, up to USD 137,000 (housing prices grew by 48%).
  3. Cape Coral, Florida: 18.5% higher returns, up to USD 96,000 (housing prices grew by 48%).
  4. North Port, Florida: 18.5% higher returns, up to USD 109,000 (housing prices grew by 47%).
  5. West Palm Beach, Florida: 17.0% higher returns, up to USD 110,000 (housing prices grew by 33%).
  6. Miami, Florida: 16.9% higher returns, up to USD 104,000 (housing prices grew by 38%).
  7. Phoenix, Arizona: 15.9% higher returns, up to USD 95,000 (housing prices grew by 48%).
  8. Stockton, California: 15.3% higher returns, up to USD 113,000 (housing prices grew by 34%).
  9. Tacoma, Washington: 15.1% higher returns, up to USD 107,000 (housing prices grew by 39%).
  10. Salt Lake City, Utah: 13.8% higher returns, up to USD 91,000 (housing prices grew by 41%).

Economists from Redfin believe that the rapid increase of returns in these locations is mostly caused by migration of remote workers receiving high wages in their home cities. The inflow of people also enhanced competition for the limited number of residential properties, where local buyers mostly failed as they competed with newcomers.

“White-collar employees with high salaries benefit greatly from remote work which enables them to move from a tech center, such as San Francisco, to more affordable parts of the country, such as Boise or Salt Lake City. Cities featured in this rating offer relatively cheap homes,” says Sheharyar Bokhari, Senior Economist at Redfin. This, however, “can have negative consequences for residents of these cities, particularly tenants, who faced a sharp surge of rent payments while their income remained the same.”

Pandemic boom is beginning to slow down

Cape Coral, Boise, North Port, Austin, Tacoma, and Phoenix are among 20 residential property markets that cooled down the fastest in the first half of 2022. Cape Coral, Boise, West Palm Beach, North Port, Miami, Salt Lake City, and Stockton are among 25 residential property markets most prone to price slumps in case of a recession.

Even if they are subject to a decline, these locations will hardly experience a collapse of the housing market. “People are still moving out of California and they still have enough money to buy good homes in attractive communities,” Gabriel Recio, representative of Redfin, declares. “But the days when a home could sell with at a 25% premium are over. Buyers are not so impatient any longer, especially now when the mortgage rates increased and the word is the housing market is going to cool. Local buyers as well as buyers from other cities can now take their time and purchase homes at the asking price.”

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