BOSTON (MainStreet) The U.S. housing market's apparent recovery has hedge funds and other institutional buyers snapping up low-priced homes by the thousands, but here's a look at five markets where small investors can still find great deals.
"These are places where investors can get good returns without having to deal with a crowded market," says economist Jake Adger of RealtyTrac.com, which recently named America's Top 25 Hidden-Gem Single-Family Rental Markets.
Adger says RealtyTrac compiled its list to help small investors at a time big players are buying up lots of homes in Las Vegas and other markets that virtually collapsed during the housing bust.
"We've been seeing institutional investors go into some markets very strongly and crowd out the mom and pop investors," he says. "So we decided to look for what's left."
To find America's hidden gems, RealtyTrac analyzed housing-market conditions in some 2,200 counties that collectively host about 90% of America's population.
The firm looked for markets that offer good rental returns, little institutional-investor interest and better-than-average unemployment rates (a good measure of future leasing demand).
Adger says hidden-gems markets are generally located far away from the Pacific or Atlantic coasts. "The big investors seem to have started in the West and sort of 'jumped' to the East, but many of the top hidden-gem markets are in the middle of the country," he says.
The expert adds that most hidden gems didn't fare all that badly during the bust, while their economies are performing well today but not so strongly as to give renters the ability or confidence to buy.
"People in these communities are either having difficult times buying homes or are uncertain whether they should do so," Adger says.
Click below to check out the five markets at the top of RealtyTrac's hidden-gems rundown, listed by their county name and largest city.