By Zane Willman, Associate Advisor | CCG Real Estate Advisors
Owning a home in the United States is increasingly out of reach for many Americans. In 2025, an average household needs to earn roughly $112,000 to $141,000 annually to afford a median-priced home nationwide, a level far above median household income.
For younger generations, first-time buyers, and even established investors, the era where simply buying a house meant wealth creation is rapidly narrowing. Rising prices, constrained supply, higher borrowing costs, and slow wage growth have all made housing affordability a central challenge.
As strategic investors, especially sub-institutional and private investors, we must go beyond just price appreciation. That requires a data driven framework to assess markets that can deliver sustainable long-term returns.
Below are the five key data points that matter most when evaluating real estate markets for investment potential:
1. Population Growth
Population trends are a core leading indicator of housing demand.
Institutional investors look for markets that have strong in-migration and expanding household formation. One effective benchmark is 9.1% population growth for cities with populations between 250,000 and 1 million between 2013 and 2022. Growth within this range often signals a market that still has room to attract new residents while retaining scale.
Rapid or sustained growth tends to support both rent increases and long-term occupancy.
This metric is a first filter because where people move to, housing demand follows.
2. Median Household Income Growth
Income growth reflects the economic health and earning power of households within a market.
Across U.S. cities of all sizes, look for at least 49.8% median household income growth between 2000 and 2022 using long term historical data. Growing incomes indicate expanding purchasing power, which supports stronger rent coverage and greater ability for buyers to qualify for financing.
Without income growth, high prices can become unsupported and risks increase.
3. Median House / Condo Value Growth
This metric measures real wealth creation through property appreciation.
Institutions often screen markets for at least 88% growth in median house or condo values between 2000 and 2022. Sustainable long term value increases reflect both demand and scarcity, and are less likely to be driven by short-term volatility.
Combined with income growth, this gauge helps evaluate whether a market’s pricing has been justified by underlying fundamentals rather than speculation.
4. Crime Trends
Quality of life matters for housing demand.
Markets where crime has declined and the most recent crime index is below 450 (based on per capita crime data from sources like www.city-data.com) are generally more attractive to renters and buyers alike.
Lower crime correlates with:
- longer occupancy durations
- more stable neighborhoods
- stronger resale values
5. Annual Job Growth
Jobs are fundamental drivers of housing demand.
Using employment data (for example at www.deptofnumbers.com/employment/metros/), the goal is to find markets with 12-month job growth above 2% (>1.5% for cities with more than 1M residents). Job creation fuels population in-migration and supports wage growth.
Without jobs, there is no sustainable demand for housing.
Why These Data Points Matter Cohesively
Looking at any one of these metrics in isolation can lead to misinterpretation. A market may have high past appreciation but flat income growth, or robust population growth but weak job creation. Institutional investors layer multiple data sets to find markets where fundamentals align.
For example:
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A high-growth city with strong job creation and income growth but worsening crime trends may face softness in long term demand.
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A market with declining affordability and poor income growth may see local residents priced out, weakening rent coverage.
When evaluating regions, it's essential to implement a multi-factor approach rather than relying on short term headlines.
California Market Considerations
Housing affordability in California remains among the worst in the nation. A statewide analysis in 2025 showed that a minimum income of $223,600 was needed to purchase a median-priced existing home, well above national requirements and far above median household income in the state.
Comparing markets across California and the nation with the five data points above can help reveal where the next big opportunity exists.
As inventory shifts and affordability constraints persist, markets that balance these metrics will outperform those driven solely by speculative price appreciation.
In Summary
Analyzing markets the way institutional investors do means looking beyond simple price movements and understanding which fundamentals drive long-term housing demand.
Our advisory team works with investors to interpret these data sets, apply them to specific investment goals, and identify markets that align with your financial goals and expectations.
If you want a customized market evaluation that helps you position your portfolio purposefully, schedule a virtual strategy session and we will walk through it together.
Click our logo below to book your call.
Sources:
- Realtor.com Research - U.S. Median Home Affordability Data
- National Association of Realtors - Housing Affordability and Income Requirements
- California Association of Realtors - California Housing Affordability Index
- Times of San Diego – San Diego Median Home Affordability Estimates
- City-Data.com – Population Trends, Income Growth, Crime and Housing Value Data
- Dept of Numbers – Metro Area Job Growth Data
- U.S. Census Bureau – Long Term Population Trends and Migration Patterns
- Bureau of Labor Statistics – Employment and Wage Trends
- Federal Reserve Economic Data – Mortgage Rate and Housing Cost Impacts
- Grocapitus RealFocus and Location Magic Framework Overview
