Investors are always interested in securing investment opportunities featuring the ideal balance of risk and reward, and rightly so. In the real estate market, there are several still-emerging trends influencing where investors are most likely to find properties in which the potential return on investment greatly exceeds the potential risk associated with that investment. In 2017, at least in a general sense, the best and most balanced investment opportunities can be found in cities located in the southern half of the United States, with a few notable exceptions, of course.
Each of the following cities selected earned its placement on this list through an analysis of a number of factors most likely to be predictive of future value relative to the likelihood of investment risk. The cities are limited to those featuring a population density of at least 500,000 residents, with the future price forecast and current level of affordability representing the most heavily weighted of the various factors used in evaluating the best limited-risk, high-ROI real estate markets.
Dallas tops the list of cities in which real estate investments feature a significant return on investment along with a minimal potential for risk, as the Texas city is currently underpriced by 3 percent relative to historical averages. In the past year alone, home prices have gone up by nearly 4 percent, but that rate is expected to accelerate rapidly over the next three years mostly due to gains in job growth as well as overall population growth. Based on these trends, home prices are expected to increase by 31 percent by 2020.
Jacksonville, Orlando, and West Palm Beach, Florida
The financial crisis hit Florida hard, but the state’s real estate market has proven to be among the most resilient in the country, as Jacksonville, Orlando, and West Palm Beach feature all the conditions necessary for yielding a significant return on investment that involves minimal risk. Consistent job growth throughout the state, combined with a renewed commitment to restraint among builders, has made several cities throughout the state among the most undervalued in the country, with some undervalued by as much as 20 percent in recent years.
In Seattle, Washington, the Pacific Northwest real estate market features at least one city representing the ideal balance of investment risk and reward. At a price of more than $400,000 on average, Seattle’s average home price is the highest of the five cities listed here, but the expectation of a 26 percent increase will push home values over the $500,000 threshold by 2020, making the iconic Pacific Northwest city one of the most balanced investment opportunities for investors seeking to maximize ROI without courting any unnecessary risk.