Real estate experts predict that cities and metro areas with spacious, affordable housing will bring the heat into 2022.
As many in real estate would expect, the coming year could be spelling good fortunes for perhaps some more than others. The largest cities and often the most popular ones are finally losing appeal. People have been moving away from cities such as New York, San Francisco, Los Angeles, and Chicago at accelerating rates.
With sky-high rents, limited space, expensive home prices, and an overall steep cost of living price, these cities are not seeing the same growth as those poised for growth.
Why are certain cities thriving?
Millennials and baby boomers make up the two largest buyer pools. Despite the drastic generational differences, they are largely moving to the same areas. There are a variety of factors contributing to this trend.
Some of the trends that have influenced the growth of new real estate markets going forward include remote work. The number of people working from home continues to grow astronomically. This is in addition to the relocation and expansion of giant companies into some new cities and markets necessitating the move to follow the newly created jobs.
Moreover, low taxes play an important role in the hottest real estate market debate (be sure to consult with a CPA or other tax professional if you’re considering this option). Other factors include affordability, education, health care, employment development, and available space.
Taking everything into account, here are the cities that experts expect to experience a continued surge in activity and property value in 2022.
Nashville hot no longer just applies to its famous chicken. It continues to be a hot spot for tourists, but is also gaining tremendous residential traction. This city is following the recent trends of a seller’s market where the demand is exceeding supply. It’s a factor that will continue to drive the prices of real estate into 2022. The city shows promise for development opportunities with rising home prices.
As of right now, the median price for a single-family house is about $425,000. That’s up over 20 percent from last year. The prices of condominiums have hit an all-time high of $298,000. This setup greatly favors real estate developers.
The state of Tennessee, local community and Tennessee Valley Community work together to provide some outstanding tax benefits to residents and businesses. Incentives are in place for those who create jobs, relocate, and make capital investments. Specifically, investors may qualify for energy credits, write-offs, and flexible loans. Tennessee has no state income tax on wages and the second lowest state tax. It’s especially alluring to those moving from states with higher tax rates who also want affordable living.
The Research Triangle, North Carolina
If you like basketball, you’re probably familiar with Duke (Durham) and the University of North Carolina (Chapel Hill). This area has drawn in thousands of new residents over the past year. The presence of tech space such as the Research Triangle creates jobs in a booming industry. Raleigh and Durham are aggressively building up tech and entrepreneurship opportunities. Large players like Google recently announced that they plan on spending over a billion dollars building campuses for engineering in the area.
Furthermore, North Carolina has tax relief programs in place that greatly benefit retirees and veterans. It’s a place where people can retire with no tax on their social security income. Programs such as the Homestead Exclusion, Circuit Breaker Tax Deferment, and Disabled Veteran Exclusion are just a few qualifying programs where several sources of income won’t count as taxable.
Raleigh has appeal to those who prefer working remotely which shifted dramatically last year. Now that employees don’t have to live near the office full time, their home options became flexible. Add in the fact that Raleigh is among the top most educated cities in America, and it makes sense why homeowners are choosing this place. Its unique combination of renowned schools and booming job market makes it more likely to retain talent after graduation. Collectively, these opportunities make the Research Triangle an attractive draw.
Talk about a rapidly growing metro area. Austin, Texas has been flooded with newcomers since 2010. The city grew 30% between 2010 and 2019 thanks to an exciting culture loaded with quality music and southern cuisine. Here, the median listing price stands at $360,000 which is 4% higher than pre-Covid rates.
Tech companies based out of California were frantically looking for relocation during the pandemic. Texas became a hot spot for the tech industry and people came to work. Austin city is host to two interstate highways, two major airports, a railway line, and a large general airport for private flights making it an ideal place to live and work in.
There are also quality schools both public and private that provide schooling convenience. The huge number of employees seeking to work remotely in a more quiet environment. Tech giants like Google and Tesla have also moved into the town further boosting its lucrative status for both business and residential areas.
Perhaps the only thing more friendly than the people of Texas are the tax breaks. There isn’t a corporate or state income tax in Texas. It is worth noting that Texas has very high property taxes, however, local taxes averaged $4,481 per person in 2018, 17% less than the national average. Over the past couple years, Texas has continuously ranked as a top 5 business climate in the country where businesses are nicely set up for development where they can compete globally.
Coming in hot on the heels of Nashville, Austin, and Raleigh, the real estate rush is in Tampa too. This city has been on a forward trajectory of positive growth offering employment to tens of thousands of Americans in the tech industry and beyond. Something that makes Tampa a hot spot destination is the easy cost of living. Tampa has a cost of living that is lower than the national average at just 91%. Tampa has a favorable tax structure for businesses that encourages development and high quality training. While there’s a long list of tax incentives, a few include:
- Economic Development Transportation Fund
- Florida First Business Bond Pool
- Qualified Defense Contractors Tax Refund Program
- Tampa Foreign Trade Zone
- Channel District Neighborhood Amenity Incentive Program
In Tampa, the average time of property on the market is 12 days. Furthermore, the average listing price of $297,500 for a single-family unit is expected to rise as we move into the new year. The warm weather all year round provides wonderful recreation for residents including fishing, beach trips, and golf. Tampa has an abundance of sports teams and a thrilling night life as well.
Tampa’s healthcare system consists of world-class professionals and research institutions. Tampa General Hospital ranked as one of the top hospitals in the entire country. It’s one of the largest hospitals (1,000+ beds) and is a non-profit academic medical center. Other institutions include BayCare, USF Health, and Moffitt Cancer Center. Not only is Tampa’s robust healthcare system attractive to newcomers, but it welcomes talented healthcare students with career paths.
Charlotte, North Carolina
Another trending city in the state of North Carolina that is likely to headline the real estate market in 2022. As we mentioned earlier when discussing the Research Triangle, tax incentives are driving Fortune 500 companies to North Carolina. Charlotte boasts a long list of companies now calling “The Queen City” home such as:
- Bank of America
- Wells Fargo
- Duke Energy
- Lending Tree
- Novant Health
In recent years, the city has experienced an increased demand for houses with dipping real estate property inventory. This has significantly impacted the housing prices that hit an all-time high of $405,000 mid this year. However, with the economy opening up buyers are optimistic that significant investment in the sector in 2022 may balance the supply versus the demand in housing and help level up the prices which will, in turn, encourage more people to buy homes.
Deep blue skies, spectacular mountain views, and a friendly environment aren’t the only factors driving new residents into Colorado’s capital. The Mile High City has had nearly 100,000 people move in over the past 7 years. Denver is making strides towards a robust job market in aerospace, defense, healthcare, and finance sectors.
Growth companies such as Palantir Technologies and Kleos Space are some of the latest to land in Denver. Meanwhile, Robinhood, Facebook, Slack and Zoom are some tech giants who have already established their presence nearby.
With rapid growth happening in Denver, there’s also a demand for construction workers due to public investments, commercial expansion, and large-scale cultural building. That’s why Denver funded the innovative Denver Construction Careers Pilot program where youth-based individuals could join. The program collaborates with Denver’s public school system and guides young people of Denver interested in a construction career. It’s a smart move to handle the anticipated growth happening in the future.
Denver is also doing hard work in the healthcare industry with top performing results. HCA Continental Division/HealthOne is based in Denver and was recognized as the top health system by IBM back in 2020 through a rigorous selection process. They have over 11,000 employees and they frequently donate to hundreds of organizations nearby. UCHealth settles in the Aurora area and has consistently ranked in the top 5 for health systems serving as a major one-two punch for Colorado’s health care.
People moving south is a familiar trend heading into 2022. Besides the well-known Georgia heat, Atlanta is emerging as one of the hottest housing markets thanks to a number of reasons. There’s booming business with diversified sectors in the restaurant, hotel, entertainment, and tech industries.
Companies such as Coca-Cola, Delta, BlackRock, and Airbnb are bolstering Atlana’s job market. Not to mention, actors and entertainment producers are recognizing Atlanta as the next biggest spot. Yet, another reason why the giant metros like Los Angeles are facing stunted growth.
Atlanta is known for its distinct neighborhoods featuring bungalows and Victorian-style homes. Virginia-Highland, Peachtree Hills, and Morningside are just a few neighborhoods to check out known for their combination of Georgia culture and friendliness. Younger professionals typically reside in Midtown and Buckhead (more pricey) while Eastside is heating up with more growth.
The cost of living and rent prices in Atlanta are on par with the national average. The national average price of one bedroom rent is$1,048 while Atlanta’s average is $1,077. It shouldn’t be overlooked considering the fact that Atlanta is a major metro area with a stellar airport and a growing workforce.
The Emerald City may have a reputation as a rainy place, but it offers a temperate climate year-round. With low humidity and plenty to offer newcomers, Seattle is much more than just a city with fun outdoor activities. In the following report on the best markets to buy a home, Seattle ranked 18th out of 300 locations. It’s also ranked 3rd among the list of cities by size.
Seattle is loaded with personality and diversity that’s helping it thrive. You can find a bunch of broken up neighborhoods where each of them have a bit of culture on their own. Capital Hill for instance, is fantastic for younger people because of its artistic vibe with boutiques on each corner. Typically families thrive in the west where there are top public schools and breathtaking parks.
The unemployment rate in Seattle settled around 4% on par with the U.S. average. There’s also no state income tax in Washington. Overall there are good opportunities in various job sectors such as tech, healthcare, and manufacturing. Seattle benefits from the additions of Amazon, Microsoft, Joint Base and Lewis-McChord creating jobs for hundreds of thousands of people. The University of Washington also bridges opportunities for students and post-grads looking for a career nearby.
A Bright future for many
Plenty of cities out there are going through periods of substantial growth for many reasons. Affordable cities with a solid amount of spacing are drawing in thousands of people per year. Tax benefits, strong job markets, and a flexible amount of educational options are also taking the interest of newer generations. Sundae’s marketplace contains 23 real estate markets (and growing), including some of the cities mentioned in this article. Be on the lookout for some of these cities headed into 2022.
Rob Marini is a content writer for Sundae who also produces content for real estate agents, investors, and prop tech companies across the country. He works as a digital marketing specialist in Connecticut, where he resides. When he’s not designing content or learning about real estate, you can find him podcasting, playing the guitar, or watching the Philadelphia Eagles.