Five Long-Term Real Estate Picks

Like most Millionaire Zone investors, you invest long term. You like real estate because it has a solid long-term, fundamentals-based track record over the long haul.

So why does every real estate forecast you read only take you through the end of this year or 2008 at the latest? Short-term forecasts are nice -- especially if you're a real estate agent -- but as a real estate investor, I like to look at the longer term.

I know my crystal ball can't forecast interest rates much better than anyone else's. And that makes predicting specific prices say, 10 years down the road, a real stretch.

So I won't do that. But here's what I can do: I can predict which residential markets are most likely to see strong and sustainable growth over the next decade.

My crystal ball, which employs metro-area facts and figures I recently obtained from industry expert Bert Sperling, combines several factors across some 375 U.S. metro areas:

• Future job growth. To me, the long-term job picture is key to real estate and especially investment real estate growth. My picks have at least a 20% projected future job growth through 2010.
• Affordability. Picks should have modest prices relative to local incomes. I eliminated areas with median home prices more than five times median household incomes, and areas where median home prices exceed $250,000.
• Stability. It's hard to guess where boom-bust markets like Phoenix, Las Vegas, Houston and smaller markets like Texas border towns are going, so I disregarded them.
• Room to move. I want up-and-comers, not markets with the best days already behind them. Those appreciating more than 100% during the 2002-06 boom are out.

Click here for the video version of this story from Jennifer Openshaw.