There are many cities in the U.S. and some in Canada that are excellent places to invest today.  All real estate markets in the U.S. are at a bottom and the chance of significant further declines is quite low.  I believe that it is dangerous to invest today expecting appreciation in the near future.  There are many burdens on the U.S. economy going forward that may mean a slow recovery.  But, the prices WILL come up again.  The U.S. is expected to experience significant population growth and immigration in the future and I believe the “hotbed” of ingenuity and entrepreneurship will once again have a significant global role in the future.  Ofcourse, much of the work might be done in Asia, but the headquarters and planning will likely stay in America.

Choosing an area to invest in can be based on convenience and the preferences of the investor.  There are many cities that will likely give positive gains in the future.  But, there are also many cities that may not.  It’s all about “bang for your buck”, though.  Follow my suggestions in this website, which are usually places I am investing myself, and I believe you will find yourself with far more investment upside in the future than your neighbours.

Type of property is vital.  It is risky to buy homes or condos at market value today.  But, there is no need to, with the prevalence of foreclosures and distressed properties.  Income-producing properties, such as multi-family and storage facilities, are good investments, if they are in emerging or growing markets.  I suggest focusing on lower-end properties that are newer and will cashflow (under $150 000).  Buying luxury homes in today’s market poses a greater risk, as these higher price brackets are still experiencing price declines in most markets and also the demand for oversize, luxury homes is forecast to decline in the future with the large number of baby-boom retirees.

There are two types of markets attractive to investment in the U.S.:

1. emerging markets that create good cashflow today because of their low prices, and yet have almost guaranteed appreciation and increase of cashflow in the future
2. distressed markets that were high-growth cities before the ‘bust’ and have had home prices drop a significant amount to very low levels.

 
Some emerging markets I recommend, some at different stages of emerging, are Huntsville, AL, Chattanooga, TN, and Tacoma/Olympia, WA.  I believe that Detroit is also an “emerging market”, but at a VERY early stage.

Some "distressed" markets I recommend are Phoenix, Las Vegas, and Fort Myers.

In January of 2009, I stated that the "bottom is here" and that it was the right time to start buying in the U.S.  Since that time, inventories have decreased in most markets, sales have increased substantially, and most areas have seen firming up of prices and even small increases.  Even though that may have been the "best' time to find distressed deals in residential real estate, lots of opportunity still exists.  Most cities still have a large supply of distressed properties and price increases have been mostly minimal, leaving room for profitable appreciation in the long-range future.

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