5 Top Cities for Real Estate Investors in 2012

BOSTON (MainStreet) -- Real estate investors might want to take a page from Dorothy and Toto's playbook in the The Wizard of Oz and set their sights on getting to Kansas.

That's because the Sunflower State hosts three of the top five cities on HousingPredictor.com's Best Investor Markets for 2012 study -- all thanks to high produce prices making the area's economy as sweet as its corn.

"Kansas is forecast to do very well because of higher crop prices," HousingPredictor.com's Mike Colpitts says. "The state has not done so well historically in terms of real estate values, [but] it is projected to do much better than most other places now because of better employment levels and a lower cost of living."

Kansas is a rare bright spot this year in a generally dull housing sector. Colpitts says investors should shy away from most U.S. locales during 2012 because much of the nation's housing market remains shaky.

"Prices are down [and] still dropping in most areas of the country," he says. "Only some markets will be good to invest in, and they are limited. Things are still too risky in most places."

To figure out which cities make sense for real estate investment this year, HousingPredictor.com recently analyzed some 230 locales for nearly 20 different factors, from market "velocity" to business growth and development.

Metro areas that top the rundown don't necessarily have the largest expected 2012 price gains among U.S. cities. Rather, Colpitts says they offer a combination of good projected price increases and "a large enough supply of renters or vacationers [to] make them good investments."

Here's a look at the top five markets on HousingPredictor.com's study, listed in order of projected average price gains for 2012.

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