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Why Invest in the Southeast

There are several factors to consider when considering where to invest. With so many excellent opportunities in the U.S., the question is really 'What areas provide the best returns, with the least amount of risk'.

The U.S. government tracks a number of statistics related to housing and economic performance of the 366 largest metropolitan regions in the U.S., called metropolitan statistical areas, or MSA’s. MSA’s include major cities and their outlying suburbs in different counties, and sometimes even different states.

At Meridian Pacific Properties, we have analyzed these data, along with additional supplemental data and paid database services, to identify the best investment locations in the nation. 

The data that we consider in our investing in the various MSA’s include:

- Median home price history over 30 years
- Appreciation projections
- Rents relative to home values (the rent ratio, or its inverse, the gross rent multiplier)
- Rent history and trend
- Real estate market stability
- Regional unemployment rates and employment trends
- Major regional employers
- Economic forecast
- Home valuations relative to median incomes
- Property tax rates
- Insurance rates
- Flood zone characteristics
- Weather and geographic factors (e.g. tornados, hurricanes, earthquakes, earth movement potential, cold weather)
- Availability of qualified property management

No one region ranks at the top in all of the foregoing categories, consequently we look for the best combinations of how the different regions rank in these categories. In the broadest terms, some areas are easy to eliminate. The West Coast (especially California) and the eastern coastal areas from New Jersey to Massachusetts tend to have low rent ratios (low rents relative to expensive home prices). Nevada and Arizona continue to have instability in their economies. Florida and the costal Gulf states have prohibitively high insurance costs, while Texas has extremely high property taxes. The northern states have additional expenses related to cold weather in the winter, and some of the northern economies still struggle.

Overall, the best areas for investment, considering all factors, are in the central and southeastern states. As we have studied the MSA’s in those areas, we have determined that Memphis, Tennessee and Jackson, Mississippi are among the best places to invest.