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Best cities for investors in 2022

Growth markets

The run-up in housing prices in many areas of the country, which was partly spurred by the pandemic-inspired flight to the suburbs from urban centers, seems to have more staying power than many experts expected.

In fact, few expected some of the extraordinary events that have recently transpired in the housing market: bidding wars in cities as disparate as Kingston, NY, and Coeur d’Alene, Idaho; lumber costs up by a multiple of 7; a shift away from office work that appears here to stay; and an epic housing shortage that has left many would-be homeowners sidelined.

Still, opportunities abound, and markets where there is more potential for upside are at the top of the list.

For investors looking to jump on that bandwagon, here are the places Mynd recommends checking out.

1. Nashville's market is riding high

Nashville - best cities for investors

2022's hot growth markets are some fan favorites, couples with other more unexpected locales. Nashville is one of these spots. (Credit: Getty Images)

Nashville is best known for country music — it garnered the name Birthplace of Country Music after fostering the early scene in the 1950s. As the genre built a fan base, everyone wanted a piece of the action and a chance at fame on stages like the Grand Ole Opry. 

From Patsy Cline (who has her own museum in town, in a building named after Johnny Cash) to Taylor Swift, name a country star and they’ve most likely lived and performed here. The Man in Black made his Grand Ole Opry debut in 1956, and in 1966, a young spitfire named Dolly Parton had her first recorded hit. The Country Music Hall of Fame opened in 1967.

But there’s more to Nashville than booting and scooting, and the real estate market has caught the fever. Like all else in Tennessee’s capital right now, it’s on fire.

The truth about Nashville's real estate market

According to Greater Nashville Realtors, home prices in the metropolitan area broke records in 2021, and continue to go up in 2022.

  • The median list price for a single family home is $446,175, up from $357,150 last February.
  • There are fewer homes for sale. 1,338 sales were pending at the end of February this year, in comparison to 3,229 pending sales at the same time in 2021.
  • Average price appreciation between early 2021 and early 2022 was 23.7 percent. “And we’re probably going to see the same again this year,” says Steve Jolly, Greater Nashville Realtors’ 2022 president.
  • Inventory for the Middle Tennessee region was down for the overall market and for single family homes. Residential home inventory at the close of February was 3,378 — a 25 percent reduction from February 2021’s inventory of 4,477.
  • Homes are spending a median 28 days on market, down from 37 year-over-year.

What makes Nashville’s economy go?

In a recent report, the research institute Wealth-X put the formerly honky-tonk town among the globe’s top 30 growth cities. 

A longtime magnet for healthcare companies as well as songwriters and guitar players, Nashville is poised to make its mark as a tech hub as well, as Amazon, Oracle (currently building a $1.2 billion Cumberland Riverfront campus), NTT Data, AllianceBernstein and other corporations take up residence.

“Businesses are coming to Nashville because Tennessee is a really friendly place to do business,” says Jolly. “We have investors from across the nation, as well as international players, putting money in Nashville.”

Regular people are following. A 2021 Bloomberg analysis of LinkedIn data saw Greater Nashville beating other destination cities as it drew the second-largest migration of tech talent in the U.S. between May 2020 and April 2021. (Austin was number 1.) The wave resulted in a net increase of 155 software and information technology workers per 10,000 residents.

— Carole Braden

2. Indianapolis lives down 'Indiana-no-place' moniker

Indianapolis

Indianapolis lives down its 'Indiana-no-place' moniker. (Credit: Getty Images)

The name of Indiana’s capital city was formed when state Supreme Court justice Jeremiah Sullivan combined Indiana, “land of the Indians,” with the Greek word for city, “polis.” It has been subject to some unflattering nicknames, like “Indiana-no-place,” but this Midwest city of about 2 million inspires loyalty among some of its famous natives. 

In 2015, when comedian David Letterman said, “It’s the highlight of my career,” he wasn’t referring to a moment from his 33 years in late-night television. He was talking about his name and a caricature of his goofy grin splashed on the car driven by Oriol Servia’s car at the Indianapolis 500. (He became a co-owner of the team in 1996.)

Maybe there’s something in the water that fosters a self-deprecating sense of humor. Novelist Kurt Vonnegut, known for his willingness to poke fun at himself, once said: “All my jokes are Indianapolis. All my attitudes are Indianapolis. … What people like about me is Indianapolis.”

When a New York Times writer (and another native son) visited the 15th-most populous city in the union and third-largest in the Midwest (after Chicago and Columbus) in 2019, he said that while it has changed over the years, it remains true to its nature: “Short on pretension, heavy on pork and still, for the most part, incomprehensibly cheap.”

Home prices on a tear, yet still affordable

The pandemic-era real estate market has been on a precipitous rise, but homes are still within reach of most buyers. 

  • In February, the median home listing price was $220,000, up 18.9 percent year-over-year.
  • The median home sale price was $222,000, up 23.3 percent year-over-year. 
  • Homes were on the market for a median 9 days, down from 13 year-over-year.

The great prices have attracted investors from all over, resulting in a very hot market.

“It’s definitely crazy,” said Jon Hensley, an agent with Coldwell Banker Kaiser. “We’ve seen prices rising steadily. For buyers, it’s a tough market. Homes are off the market very quickly. If it’s priced anywhere near correct and the house has any redeeming value, it is gone.

“Our buyers need to be prepared to make a decision the day they look at a house,” Hensley said. “Homes are on the market for 16 days on average, and the only reason it’s that high is that there are some sellers who have marginal property or are looking to make a killing.”

Homes that are priced correctly are snapped up in four or five days, he added.

Flyover country no more

Hoosiers like to dismiss misconceptions of their city as being another burg in flyover country.

“We offer everything that you can get in other cities and parts of the country, whether you want a city with a lot to do, or you can get out of the city very easily,” said Hensley.

Conceptions of the city as being part of the Rust Belt are also outdated. While it’s true that the city lost many manufacturing jobs in the period between 1990 and 2012, its economy has since diversified. Moody’s associate economist Matt Colyar says that his company’s diversity rating of the city is a 77 out of 100; by comparison, Chicago gets an 80.

“As far as population trends, prior to the pandemic, people were moving into Indianapolis, by contrast with other places in the Midwest,” Colyar said. “Logistics is huge there, and that’s an industry that’s hiring at high rates. It’s got a cool identity that some other Midwest cities can’t boast.”

Pharmaceutical companies like Eli Lilly and Roche help attract college educated young workers. 

“Having a draw for jobs that require a college degree is crucial,” Colyar added. “Any mayor is looking to expand that.”

Fortune 500 health care company Anthem was founded and remains headquartered here. Eli Lilly is the largest private employer, with 11,000 staffers. Amazon has a major presence, employing 9,000, and FedEx has a national hub that employs 7,000. 

The city is home to one of the country’s largest life sciences clusters, employing between 20,000 and 30,000 among nearly 350 companies. It’s also a hub for academic medicine and research, with such institutions as Indiana Biosciences Research Institute, Indiana School of Medicine, and the American College of Sports Medicine.

— Brian Boucher

3. Jacksonville's days under the radar are a thing of the past

Jacksonville

The Gateway to Florida, Jacksonville has been underestimated for a long time, but today it is drawing new residents and investors and its housing market is feeling the bump. (Credit: Getty Images)

One could argue that Jacksonville’s less-than-stellar reputation in pop culture — think cultural backwater populated by hillbillies, a city that couldn’t supply enough hotel rooms at the 2005 Super Bowl — has worked in its favor, with residents enjoying a pleasant and affordable quality of life in a river-and-ocean city well below the radar. 

Now, with the national housing landscape having shifted to one of high panic over shrinking inventory, Jacksonville real estate has been discovered and the city is booming with sales and rentals that match or exceed the frenzy that has plagued other hot markets across the country. 

But, locals in the know would argue that there is still some runway before prices begin to match those of other in-demand cities, and Jacksonville remains a very good place to invest, provided a buyer is ready to wade into its hyper-competitive market.

An underestimated city hits its stride

The city and its real estate market have long been underestimated, putting it in the position today where it is feeling the effects of a boom.

“Jacksonville has been undervalued for a very long time compared to the national numbers,” said Wendy Griffis, a Better Homes & Gardens realtor. “At one point you could buy a beautiful house on the ocean for a million—now that couldn’t happen.” 

According to data from Better Homes & Gardens Real Estate Lifestyles Realty, the dollar volume of closed sales in Northeast Florida went from $9 billion in January of 2021 to over $14 billion in January of 2022. 

  • In March, Jacksonville’s median home listing price was $289,900, up nearly 21 percent from $239,900 in March 2021, according to realtor.com. 
  • The median home sale price was $291,250, up from $235,000 in March of 2021, or nearly 24 percent. 
  • Homes were on the market for a median 42 days in March, down from 49 days year-over-year.

Lisa Pruitt has worked in real estate in the area since 1992, and has witnessed a shift.

“​​Our housing is more affordable than most parts of the country,” she said. “It’s a great place for investors to come in. It’s only to the locals that prices seem extremely high because of what we’re used to.”

Buyers from far-flung places discover Jacksonville

Griffis notes that “100 people a week are moving to Jacksonville,” and data shows some 1,100 people moving to Florida. The city ranks #25 on The Street’s list of cities with the biggest influx of new residents in 2021. 

But the demographics of new buyers has morphed considerably over the last few years, as they have in other Florida cities, such as Tampa and Orlando, and other hot markets across the South, like AtlantaCharlotteRaleigh and Dallas.

Pushpa Devi, a Jacksonville realtor for almost two decades, has seen the change. 

“It started out that people from Miami were trying to get out of that craziness, looking here for properties,” she said. “Now it’s becoming all Northeast and West Coast people, selling their house for a million, and getting a house double the size for a million here.”

In fact, U.S. News & World Report ranked Jacksonville #22 in its 25 Best Places to Live in the U.S. 2021-22. 

The mild weather doesn’t hurt. Pruitt points out that North Florida is more like southern Georgia than like southern Florida as far as climate, with a few seasonal changes, generally nothing below 50 degrees in the winter, and temperatures usually a bit cooler than the rest of the state in the summer.

— Ariana Speyer

4. Dallas–Fort Worth soon to be third-largest U.S. metro area

Dallas

The Dallas-Ft. Worth metro area is on the rise, with no inkling of slowing down. (Credit: Getty Images)

Anyone who is interested in American cities, or the South, or real estate, or just great places to live, ought to be watching the sprawling Dallas–Fort Worth metroplex very closely. 

To give a few examples, New York Times opinion writer Farhad Manjoo recently wrote that “Everyone’s moving to Texas,” and gave plenty of reasons why. Freakonomics podcaster Stephen Dubner flew in from Gotham to find out why for himself. (That trip, in turn, was inspired by the City Journal’s article “Big D is a Big Deal.”) 

And, from the halls of academe, the Kinder Institute for Urban Research proclaimed that “Dallas is poised to dominate America’s heartland.”

There’s good reason for all the attention in the city and in Dallas real estate. DFW’s population, at 7.6 million as of the 2020 Census, has grown three times faster than the average of the nation’s 50 largest metro areas, making it the most populous metro area in the South. That number stood at 6.4 million in 2010, meaning the population grew by a stunning 350 people a day over the decade. 

It’s projected to reach 10 million by the 2030s, at which time it is expected to displace Chicago as the nation’s third-largest metro, behind New York and Los Angeles.

Dallas housing prices and population grow

DFW has seen its housing prices make historic leaps during the pandemic, as have many places with reasonable cost of living and low density. 

  • Metro area home prices are up 25.1 percent since February 2020 and by 49 percent since the 2007 housing crash, according to a recent Zillow report.
  • In Dallas County, the median listing home price in February 2022 was $349,500, up 7.5 percent year over year.
  • Median home sale price in February was near $342,018, up 10.1 percent year-over-year.
  • Median days on market in February was 42, down from 56 a year before.

“Our prices will still go up,” says real estate broker Robyn Bullard, who has lived in the metroplex for 40 years and been in the business since 2008. “There’s only a month’s inventory.”

Dallas real estate is booming, and competition among buyers is keen.

“When houses are listed, it’s insane,” said Bullard. “If you want to buy, you might see 50 houses and make 40 offers and still not have a house. There will be 95 offers, and the terms are unbelievable. That said, it’s still a fabulous place for investors — if they know what they’re doing.”

Indeed, experts expect robust growth to continue making Dallas a good real estate investment. The PwC/Urban Land Institute’s Emerging Trends in Real Estate report for 2022 rates DFW fourth in homebuilding prospects and seventh in overall real estate prospects among American metro areas, classifying it as a “magnet” among the “Super Sun Belt” cities (along with AtlantaPhoenixSan Antonio and Tampa/St. Petersburg).

Dallas has robust industries of all sorts

While Weinstein talks about the great job market, there is plenty of evidence of that. DFW is home to 24 Fortune 500 headquarters, trailing only New York and Chicago. (Four decades ago, the region had not even a handful.) 

It was already home to Texas Instruments, American Airlines, and Southwest Airlines before it recently added Toyota Motor North American, Tenet Healthcare, commercial real estate services titan CBRE, and Charles Schwab. 

The metroplex also ranks as the country’s third-largest banking hub. 

“Dallas has been the financial center of the South for 10 or 15 years, and it’s really accelerating,” says Edward Friedman, an economist with Moody’s. “Capital One has a location in Plano, and Fidelity plans to hire 2,000 people in client-facing roles.” 

Vanguard and Goldman Sachs are both planning to expand in the Dallas market.

“You’ve got a lot of wealth building up in the Southwest,” Friedman said. “That attracts the big banks, which do a lot of banking with mid-market businesses and high-net-worth individuals.” 

A 2021 Wealth X report showed that DFW amassed super-wealthy residents at a rate faster than New York and Los Angeles in 2020.

But economies aren’t driven just by big players and the super-wealthy. As Dubner points out in his podcast, one recent study ranked Dallas the country’s 18th-best place to start a new business. (L.A. ranked 52nd, New York 60th.)

Feeding talent to these employers are the area’s more than 40 colleges and universities, including Southern Methodist University, Texas Christian University, University of Texas at Dallas and University of Dallas. 

And while Dallas doesn’t have a techy nickname (like “Silicon Hills,” the moniker for Austin, in the southern Texas Hill Country), North Texas has the fifth-largest pool of tech talent in the continent, according to CBRE.

“In terms of high-tech employment,” says Weinstein, “Austin gets the hype, but Dallas–Fort Worth gets the jobs.”

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