Clients ask me all the time, “what is the hottest market to invest in, and why are these markets considered hot?” My response is that there are a few factors that calculate into a market being hot. These factors include: consistent growth, economic environment, business friendly environment, and demographics. Let’s examine these factors further.
- Consistent growth: How consistent is the growth? Is the market constantly growing year after year? Consistency is important in determining markets. Would you rather invest in a market that has improved gradually every year for a decade, or one that had one or two really good years of growth?
- Economic environment: This is an important question when determining a market to invest in. There are a few factors that make up an economic environment of a city. Some of these include: supply and demand, unemployment, market size, and competition.
- Business friendly environment: Government policies and the overall environment that they create can sometimes be vital to business development in a city. Are the taxes high, and if so, will businesses be able to survive with high taxes? Are there a lot of building and zoning regulations? How is the publicity? Do fortunate 500 companies talk highly of the market?
- Demographics: The people in the market are essential to the well being of business success. The size of the population matters, as the population is going to help the market flourish. Is the population growing? Are people moving into the city? And finally, how is the income in this market? Is the income level high, so people can spend money?
After looking at the factors that make up a “hot” market, here are the top markets in the United States:
Nashville, TN
Raleigh/Durham, NC
Phoenix, AZ
Austin, TX
Tampa/St. Petersburg, FL