Multifamily: What U.S. MSAs would you expect to experience the highest capital gain in the next 5 years?

Exploring the features which explain why a specific area is thriving while the neighboring area remains stagnant is an incredibly intricate task. No single factor can fully explain the disparity—rather, a unique blend of influences shapes the outcome. However, these contributing elements can differ greatly from one location to another.

Based on predictive models we have been developing for the last two years, here are the MSAs across the U.S. predicted to experience the highest capital gains in the next 5 years:

Not every market listed is suitable for all investors. Before expanding into new areas, several key factors must be evaluated, each aligning with an investor’s unique investment criteria.

For example, California is often viewed as less landlord-friendly, primarily due to its statewide rent control, stringent eviction regulations, and mandatory professional inspections for multi-unit buildings. These policies can significantly impact investment decisions and profitability.

Why is identifying the NEXT Top Markets so challenging?

The Top Markets listed vary in numerous ways. Additionally, Census Tracts within the same MSA can differ significantly (which is why Risespot evaluates each Tract individually). Given these variations, what factors justify grouping these markets into a single list?

There is no simple answer (While it’s certainly not a black box, this topic will be explored further in a separate blog).

There is no single combination of features that applies across all markets and moreover, the contribution of each feature to the overall Capital Gain Score varies across areas.   For example, one of our proprietary features, STIP (which tracks transportation projects under planning), plays a crucial role in shaping the Capital Gain Score in Sun Belt and Mountain markets, where a lot of transportation projects support growth. In contrast, most transportation projects in New York focus on maintenance rather than expansion, making STIP less relevant in that market.

Do our models work?

Risespot showcases accurate models: The actual capital gains of areas predicted to be the most attractive are indeed the highest!