The majority of these 10 hottest markets are small-to-midsized suburban cities an hour to an hour and a half outside major metropolitan areas such as Boston; San Francisco; Columbus, Ohio; or Raleigh, North Carolina.
These cities, while close to major metros, don't have much to offer in terms of job opportunities or economic infrastructure. Rather, they are safe, spacious areas to reside while still being able to commute into the big city.
A few of the cities on the list, including Springfield, Ohio, and Lafayette, Indiana, are not suburban cities near major metros, but rather smaller, rural towns experiencing a new surge of interest from buyers.
Before buying, here's what you need to know
A hot market is great when it comes time to sell, but can lead to problems in the interim. First, finding a value buy is extremely challenging. With some of the markets seeing less than 20 days on the market, properties are selling fast, meaning investors who want to participate in these rapidly appreciating and high-demand markets need to get creative and go off-market.
Putting in for the cost and effort to find off-market leads could pay off big, but be aware you're likely not the only investor following the same path. While there may be less competition, there is still some.
Don't fudge your numbers just because a market is hot. Investors do need to consider rapid appreciation into their calculations and should not be relying on it. Investors just prior to the crash of 2008-2010 were buying property knowing it would be worth more in a month or two without having to add value. But once the market crashed, homeowners and investors were stuck with properties they paid too much for and no longer had the value they thought was built in. Overbidding just to snag a deal in a tough market is never worth it in the long run.
It's also important to determine if long-term potential for a return in the given market is truly there or if it's short-term hype that's drawing attention to the area. Understanding what pockets hold the best long-term returns and potential for an investment is key.
The Millionacres bottom line
Where people are buying is changing. As people slowly move away from major metros and coastal cities into the center of the country, there could be long-term potential for investors in these and other markets, but careful due diligence, patience, and creativity will lead the way for opportunity to come to fruition.