Looking For A Good Investment? Zillow Names The Best Places To Invest In The Country For 2011

Zillow.com's research team put together a list of the best places in the country to invest in 2011. Although it may be difficult to find good news coming out of the latest housing market data, there is a bright side to the housing plunge. There are a lot of opportunities out there for average homebuyers and investors alike and affordability is at an all time high.

The extensive real estate data, concluded by Zillow, allows us to take a deep look into the housing markets across the country. This research is meant for sophisticated investors who are interested in making a long-term investment in properties that will produce rental income, not those investors looking for a quick flip. Focused more on regular positive cash flow, these types of investors usually expect the value appreciation to be quite descent.

Zillow looked at 4 factors in individual markets across the nation.

1. Price-to-income ratio: 
The relationship between local incomes and home values over time, pinpointed the historic norm, and compared the price-to-income ratio today. Places where home values are currently above that historic norm got high marks, because that suggests property values may have over-corrected in the housing downturn, so this year would be a good time to buy.

2. Foreclosures:
Places where foreclosure rates were falling, which means the local market is likely to improve, were also included. Although attractive to many investors, we wanted to make sure there is still an ample supply available.

3. Price-to-rent ratio: 
Places where the difference between the annual cost of renting or buying was small, was also examined. This means that current purchase prices are appealing now, but that rents could fall in the future. However, rents may be high now relative to the purchase price, so the property might generate income quickly.

4. Home value appreciation: 
Since it’s more attractive for investors to buy in a relatively strong real estate market, the Zillow Home Value Index (measures the median value of all homes in an area) needed to increase.

According to Zillow, the best place to invest would be Merced, CA. In Merced, the home values are ascending again after a substantial adjustment during the downturn. Foreclosures are falling, but sales of previously foreclosed homes made up 53 percent of all sales in October, so there are plenty of choices for investors. 


NOTE: All information was received from Zillow.com

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