Top U.S. markets for real estate investing

As the stock market has cooled and interest rates have remained low, more and more investors have looked to real estate, nowhere more so than in the consistently hot California market. But houses on the Pacific Coast are too expensive and can’t generate rents high enough to cover costs, so investors are looking mostly to the Central Valley’s relatively affordable market instead. As the following chart (from “Putting Stock in Property,” Los Angeles Times, March 27, 2005) shows, Chico is a top target, which helps to account for the skyrocketing housing prices here.

Below are the 10 most popular areas for investment, ranked by a percentage of all homes bought in 2004 that were purchased solely for their investment value.

Area percentage

Redding, Calif. 19.08%

Medford-Ashland, Ore. 18.78%

San Luis Obispo-Atascadero-Paso Robles, Calif. 18.20%

Visalia-Tulare-Porterville, Calif. 17.98%

Merced, Calif. 17.53%

Chico-Paradise, Calif 17.52%

Fresno, Calif. 17.48%

Tallahassee, Fla. 16.78%

Bakersfield, Calif. 16.56%

Reno, Nev. 16.18%