Which Midwestern markets have "coastal style" real estate appreciation?

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hvaclorax
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by hvaclorax »

I live in Montana. No one likes the cold. Our appreciation for housing has been high as have the coasts but started from rather lower levels. But really the question is how small of a city do you want to consider? Or maybe I might be missing something?
wilked
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by wilked »

What is your defintion of Midwest?
beardsicles
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by beardsicles »

If I had to bet, Rochester MN. But that would be a bet, not an investment. Better off trying to pick the next penny stonk.
02nz
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by 02nz »

JustGotScammed wrote: Sat Jun 01, 2024 2:49 pm Ehh, sick of watching other people make real estate $$$.
User name checks out ...
hiduplex
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by hiduplex »

Gary Indiana Detroit and other towns like that may have some high upside growth if the place you buy doesn't get condemned or something not sure they can get much lower.

In Iowa the prices are all over the place 10 years ago or so you could have gotten some fairly good housing for 50-100k now even really bad dumps are going for 90k+ it's still really cheap compared to most of the USA but a lot compared to what it was and not sure a lot of it will be blowing up in price again.
toomanysidehustles
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by toomanysidehustles »

JustGotScammed wrote: Sat Jun 01, 2024 2:42 pm Which markets there have the highest price appreciation, such that if I own a home for a few years, I'd be most likely to make money on it?

[OP has a related thread at viewtopic.php?t=421723, but this is a separate different question. Moderator Pops1860]
3 years? 5 years? Bentonville, Arkansas is blowing up right now and I think you would make good money if you sell in the future. Lots of people moving for the high quality of sports (mountain biking) for example.
rockstar
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by rockstar »

I’d look for low property taxes.

The problem with most of the Midwest is high property taxes.
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TheRoundHeadedKid
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by TheRoundHeadedKid »

Dallas, Denver and Minneapolis come to mind. They have major international hub airports, which tends to help with people move into those cities and keep the population growing. This is turn helps with real estate appreciation. Most other cities in the Midwest, I would be worried about worsening tornados, floods, or hurricanes due to climate change. These are reasons people might leave.
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WhitePuma
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by WhitePuma »

What is your obsession with buying? Has the real estate marketing juggernaut sunk its fangs into you?
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by WhitePuma »

How about Calumet City?
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JustGotScammed
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by JustGotScammed »

WhitePuma wrote: Wed Jun 05, 2024 7:15 pm What is your obsession with buying? Has the real estate marketing juggernaut sunk its fangs into you?
I'd rather own property and make the money from appreciation rather than pay higher rent when property appreciates.
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happyisland
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by happyisland »

JustGotScammed wrote: Sun Jun 09, 2024 5:58 pm
WhitePuma wrote: Wed Jun 05, 2024 7:15 pm What is your obsession with buying? Has the real estate marketing juggernaut sunk its fangs into you?
I'd rather own property and make the money from appreciation rather than pay higher rent when property appreciates.
It's not always a financial win to own rather than rent. Here's an easy calculator that helps with the math: https://www.nytimes.com/interactive/202 ... lator.html
unwitting_gulag
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by unwitting_gulag »

happyisland wrote: Sun Jun 09, 2024 6:45 pm
JustGotScammed wrote: Sun Jun 09, 2024 5:58 pm
WhitePuma wrote: Wed Jun 05, 2024 7:15 pm What is your obsession with buying? Has the real estate marketing juggernaut sunk its fangs into you?
I'd rather own property and make the money from appreciation rather than pay higher rent when property appreciates.
It's not always a financial win to own rather than rent. Here's an easy calculator that helps with the math: https://www.nytimes.com/interactive/202 ... lator.html
That calculator is a fantastic resource! Unfortunately, it's plagued by a crucial unknown: expected annual real-estate appreciation. Everything else, including prospective returns on other investments (stocks, bonds,...) have plausible expected bounds. These things can be estimated. So too, can mortgage rates and rise in property taxes and alternatively the rise in rents. For all of that stuff, we can erect reasonable guard rails... best case and worst case. But for housing-appreciation, we can not. If we have another run, as we did over the past 5 years, then the OP's premise becomes only too true. FOMO would be wisdom incarnate. If we get a stagnation, as happened say during 2012-2017, then it's probably better to rent. And so on.
marcopolo
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by marcopolo »

unwitting_gulag wrote: Mon Jun 10, 2024 12:12 am
happyisland wrote: Sun Jun 09, 2024 6:45 pm
JustGotScammed wrote: Sun Jun 09, 2024 5:58 pm
WhitePuma wrote: Wed Jun 05, 2024 7:15 pm What is your obsession with buying? Has the real estate marketing juggernaut sunk its fangs into you?
I'd rather own property and make the money from appreciation rather than pay higher rent when property appreciates.
It's not always a financial win to own rather than rent. Here's an easy calculator that helps with the math: https://www.nytimes.com/interactive/202 ... lator.html
That calculator is a fantastic resource! Unfortunately, it's plagued by a crucial unknown: expected annual real-estate appreciation. Everything else, including prospective returns on other investments (stocks, bonds,...) have plausible expected bounds. These things can be estimated. So too, can mortgage rates and rise in property taxes and alternatively the rise in rents. For all of that stuff, we can erect reasonable guard rails... best case and worst case. But for housing-appreciation, we can not. If we have another run, as we did over the past 5 years, then the OP's premise becomes only too true. FOMO would be wisdom incarnate. If we get a stagnation, as happened say during 2012-2017, then it's probably better to rent. And so on.
How would you predict rise in rents without being able to roughly predict rise in housing prices? I would suspect there is a very strong correlation between the two.
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invest4
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by invest4 »

It’s always tough to assess where and why real-estate will go up or down over a given period.

For example, I am surprised to see Floridians go to great lengths including self-insuring their homes while climate change continues to wreak havoc in the vulnerable coastal areas with no sign of abating.

Feels like the boiled frog to me and would definitely not invest any monies in those areas. Of course, others disagree and keep going.

There are a number of states and cities which are projected as being more climate ready and resilient. Will that translate to strong returns on real-estate? Possibly, but it could take awhile yet before you may see it…or see an extraordinary amount of activity if things take a faster turn for the worse.

In the end, it’s guessing and hoping. Instead, I would simply make a best bet what will be good for your family over the long term and go with that.
InvisibleAerobar
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by InvisibleAerobar »

JustGotScammed wrote: Sun Jun 09, 2024 5:58 pm
WhitePuma wrote: Wed Jun 05, 2024 7:15 pm What is your obsession with buying? Has the real estate marketing juggernaut sunk its fangs into you?
I'd rather own property and make the money from appreciation rather than pay higher rent when property appreciates.
Where do you reside now? And how much can you afford?

In other threads you started, you mention that 1) your current rent is $1,300 and that 2) you are interested in living in coastal areas near San Diego (Del Mar) where rent for 1k sq ft exceeds $5k/ month.

There is some dichotomy among 1), 2), and premise of the current thread. For instance, $1,300/month in rent is right around what is reasonable for an older but well maintained 1-BR APT in a decent area in some Midwest locales that have seen significant RE appreciation (both in terms of rentals and property pricing). in such areas, newer 1-BR units built in the last 15 years generally cost -$1,600 or more. The places that now rents for $1,300 also tend to have had rents of ~$1k/month about four years ago. In some locales, even $1,600 might not be enough.

That’s all a long-winded way of saying what you are seeking to avoid is already present in the more desirable places in the Midwest, and that desirability is ultimately what drove appreciation in the past and what would drive future appreciation.

If your intent is really what are the next hot places in the Midwest (as opposed to what places has been hot and have likelihood of maintaining the trend), such intent really isn’t more than just mere speculation.
SubPar
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by SubPar »

There are A LOT of factors that go into this analysis -- job market/workforce demographics, state-level politics, weather patterns, population trends, property/income taxes, housing supply/demand, etc.

The short answer is that there are certain characteristics within the coastal markets (aka Sunbelt region aka Smile States) that aren't fully replicable in the Midwest. You'd have to have a very intimate understanding of specific submarkets within a given Midwestern MSA, as there would likely be idiosyncratic drivers for such appreciation.

A good example was already mentioned -- Rochester, MN. Mayo Clinic, obviously, but those outside of the area probably don't know as much about the DMC ("Destination Medical Center") program that's driving tons of growth/investment in that city.
unwitting_gulag
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by unwitting_gulag »

marcopolo wrote: Mon Jun 10, 2024 12:52 am
unwitting_gulag wrote: Mon Jun 10, 2024 12:12 am
happyisland wrote: Sun Jun 09, 2024 6:45 pm
JustGotScammed wrote: Sun Jun 09, 2024 5:58 pm
WhitePuma wrote: Wed Jun 05, 2024 7:15 pm What is your obsession with buying? Has the real estate marketing juggernaut sunk its fangs into you?
I'd rather own property and make the money from appreciation rather than pay higher rent when property appreciates.
It's not always a financial win to own rather than rent. Here's an easy calculator that helps with the math: https://www.nytimes.com/interactive/202 ... lator.html
That calculator is a fantastic resource! Unfortunately, it's plagued by a crucial unknown: expected annual real-estate appreciation. Everything else, including prospective returns on other investments (stocks, bonds,...) have plausible expected bounds. These things can be estimated. So too, can mortgage rates and rise in property taxes and alternatively the rise in rents. For all of that stuff, we can erect reasonable guard rails... best case and worst case. But for housing-appreciation, we can not. If we have another run, as we did over the past 5 years, then the OP's premise becomes only too true. FOMO would be wisdom incarnate. If we get a stagnation, as happened say during 2012-2017, then it's probably better to rent. And so on.
How would you predict rise in rents without being able to roughly predict rise in housing prices? I would suspect there is a very strong correlation between the two.
Rise in housing prices has become unmoored from rise in rents. Consider for example the past 5 years. In my locale, rents have been basically stagnant, or perhaps just tracking inflation. Housing prices have exploded, resulting in returns beating US small-caps or ex-US stocks (US large-cap excepted, of course). Can this continue? I have no clue about housing prices. But for rents, the uncertainty bounds are narrower. Why? Because high rent would cause all sorts of social ructions and dislocations. The market would react adversely. People would move away. High and higher housing prices don't seem to thus behave. It has become understood that housing (locally) is a luxury-good.

That brings us back to the OP's question. Lots of folks have critiqued the OP for feeling envious or of reducing housing to a financial decision, whereas in reality (we are told) it's mainly a lifestyle or consumption decision. Well, I agree with the OP. If housing weren't a lucrative investment, I'd never buy.
aristotelian
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by aristotelian »

Chicago probably has the most expensive real estate in the midwest... Denver is another hot one. But I am confused, if you are getting priced out of coastal real estate, why would you be seeking expensive real estate in the midwest?
JPM
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by JPM »

Chicago may reverse its deteriorating business and social climates, meanwhile SE Wisconsin and NW Indiana are benefiting. These areas have ready access to the Chicago's transportation hub and its financial center. I would not expect RE appreciation on the scale of California or greater NYC where there are far more people with 7,8, and 9 figure incomes or net worths available to elevate RE prices. Chicago does have a lot of rich people, but not on the scale of NYC or California.

Agree with prior post praising the desirability of Ozaukee, Sheboygan, and Door counties north of Milwaukee, but transportation from Chicago would have to be 2-5 hrs by car. Safe walkable Lake Geneva Wi in Walworth county has a convenient train directly from Chicago and so it has been a summer playground for the Chicago rich since the late 19th century. Much shorter car ride than the other three from Chicago as well. Relatively few rich people in Indiana or Wisconsin.
MMiroir
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by MMiroir »

Generally, Midwestern markets don't have the strong population growth figures that drive home values like the higher growth coastal cities. However, within the Midwest, I would think that cities with flagship public colleges and large government employment would do better than average. Think Madison, WI, or Columbus, OH.

You can research historical home values by city and county at the St. Louis Fed site.

https://fred.stlouisfed.org/

Here is the data for the United States, Madison, Columbus, and Chicago.

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unwitting_gulag
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by unwitting_gulag »

MMiroir wrote: Tue Jun 11, 2024 6:00 am Generally, Midwestern markets don't have the strong population growth figures that drive home values like the higher growth coastal cities. ...
While this stands to reason, in terms of supply-and-demand etc., I have to wonder about markets such as Los Angeles. LA County has been stagnant or declining in population for a while; it looks to have peaked in 2017, and is now some 3% below where it was 7 years ago. Even so, housing prices have burgeoned.

Clearly, if population goes into long-term decline, it's hard to surmise, why housing prices would keep rising. But maybe there are large lags? In other words, could it be, that over some substantial period of time - call it maybe 10 years - trends in population and trends in housing prices could move in opposite directions?
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JustGotScammed
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by JustGotScammed »

Does it make sense to prioritize homes near major highways? They seem to appreciate more.
mikejuss
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by mikejuss »

How about I answer your question in a public forum, and we all get rich, OP?
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vinhodoporto
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Re: Which Midwestern markets have "coastal style" real estate appreciation?

Post by vinhodoporto »

What you are looking for doesn’t really exist.

Typically “coastal style” real estate appreciation is a result of demand outpacing supply and enough buyers with the ability and willingness to pay eye watering prices.

Places like NYC, the Bay Area, SoCal, Seattle, Boston, and even DC have geographic factors and restrictive zoning that makes it difficult to build new homes which limits supply, lots of very high income, “family money”, and international buyers who are less price sensitive, and a culture where spending a huge % of income on housing is normal. For the most part the Midwest has none of these factors, which is why you don’t typically see the same type of appreciation. It also means there’s less of the boom/bust volatility seen on the coasts.

A better bet would be to look in the fast growing sun belt areas, especially those where lots of people have been moving from the VHCOL coastal areas bringing their high incomes, big down payments, and expectation to pay a lot. Unfortunately for you, many people figured this out in 2020 so most of the easy gains have already been taken.
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