“Dallas mirrors the national economy in its sector diversification, making it resilient and attractive for investment.”
“Attractive real estate markets are determined by a combination of demographic growth and supply constraints, with the Northeast and Southeast regions currently seen as particularly favorable.”
We provide two quotes to reflect the persistent placement of Dallas/Fort Worth as the top market to watch while illustrating the renewed focus on tracking and underwriting granular trends within markets and sectors. In this chapter, we introduce a new regional framework for analyzing results based on movement among primary markets and across markets within their respective U.S. regions.
In this year’s Emerging Trends survey, we asked industry participants to rate markets for investment and development prospects in 2026 across property types, and to rate aspects of their local markets. These ratings were combined and calculated to determine the overall real estate market rankings. Participants expect real estate prospects for 2026 to be fair but improving with an average score of 2.81 on a five-point scale, up from 2.75 for 2025 in last year’s survey and 2.74 for 2024. The last time the average real estate prospects score was above three was a 3.19 average for 2022.
Regional Framework
The real estate prospects scoring enables markets to shift relative to each other as well as up or down compared with prior survey results. To capture industry sentiment across large and small markets, and within and across regions, a regional framework is applied to the survey results.
The 81 markets rated by participants in the survey are divided here into five regions—Midwest, Northeast, Southeast, South Central, and West—that correspond to the U.S. Census Bureau Regions and Divisions. The sixth market group—Primary Markets—includes one or two major metropolitan areas from each region to capture dynamic changes among large markets in the survey results. The Primary Markets are metropolitan areas that boast total payroll employment of 3 million or more workers, indicating significant depth of demand for real estate. Investors concentrating their market allocation in primary markets tend to allocate capital across these markets regardless of region, thereby warranting a separate group within the regional framework.
Markets to Watch
Examining the survey results across these six groups brings real estate prospects into finer focus. The Primary Markets have an average score of 3.08, indicating a more favorable outlook for the largest markets. Notably, three regions—Southeast, South Central, and Northeast—have average real estate prospect scores above the overall average of 2.81, while the Midwest and West lag the overall average.
The movement of markets within each category also differentiates the strength of each group. Primary Markets are generally moving higher in the ranks, as are the Northeast region markets. Combined, this shift in the results shows rising prospects for the greater New York City market. However, there is more to uncover beneath these results when we examine how individual markets move within each category.
Primary Markets Move Up
Over half of the 15 Primary Markets are among the top 20 markets rated for overall real estate prospects in 2026, supporting a solid 3.08 average real estate prospects score and indicating sound investment and development conditions across the largest U.S. markets. Dallas/Fort Worth leads all markets as well as the Primary Markets, maintaining their top spot for another year.
Further, over half of the Primary Markets moved up the ranks this year versus last year’s survey. The greater New York City area led this activity with upward movements for Brooklyn, Northern New Jersey, Manhattan, and the other NYC Boroughs. The ratings for these markets are similar to those for Houston and Atlanta, creating a cluster of Primary Markets to Watch.
Orange County, Chicago, and Philadelphia also made sizable gains in the ranks as each market moved up more than 10 spots versus 2025. The most notable downward movement among Primary Markets is Los Angeles, which slipped 10 spots to the middle of the pack overall, but above only Washington D.C. in the Primary Market group.
Southeast Holding Strong
Among the five regions, the Southeast boasts the largest number of markets in the top 20 ratings of overall real estate prospects. The Southeast also has the highest average rating (2.90).
Within this region, Miami ranks highest for real estate prospects, placing third overall of all 81 markets in the Emerging Trends survey. The buy-hold-sell results show solid investor interest in Miami’s hotels, retail, and office properties with more relative caution for apartment acquisitions. Comparatively, Southeast apartment buys are viewed more favorably in Tampa/St. Petersburg, Raleigh/Durham, and Palm Beach.
Miami and three other Southeast markets—Raleigh/Durham, Charleston, and the Washington D.C. – District—held within one ranked spot from 2025. More Southeast markets moved down the ranks than up, with three Florida markets—Deltona/Daytona Beach, Southwest Florida, and Jacksonville—declining by more than 10 spots. Among the seven Southeast markets moving up the rankings in 2026, Tallahassee stands out with a 36-place movement, flipping from near the bottom of the ranks last year to the top half of the overall prospect list.
Southeast economies to watch
The Southeast boasts the largest regional concentration of top markets for income and job growth rates, as projected by Moody’s Analytics. Three regional markets—Raleigh/Durham, Orlando, and Charlotte—have stronger job growth forecasts than the top ranked market overall.
In Florida, the job and income growth rate forecasts for 25th-ranked Fort Lauderdale exceeds its neighbor, third-ranked Miami. The Fort Lauderdale per capita income growth outlook through 2030 is akin to eighth-ranked Tampa/St. Petersburg. Charleston, which ranks 36th, has similar real per capita income in 2025 and forward income and job growth prospects to Charlotte, which ranks 14th.
South Central led by Texas and Nashville
One-third of the 12 South Central markets rank among the top 20 overall, including number one, Dallas/Fort Worth. Despite this, the average real estate prospects score for the region is 2.89, reflecting the downward movement of four South Central markets by more than 10 places in the 2026 rankings.
Dallas/Fort Worth is a perennial favorite for real estate investors and developers, clenching the top spot in both the commercial and homebuilding prospects list this year. Investors completing the survey offer strong net buy recommendations for Dallas/Fort Worth retail and industrial, although results are similar for these property types in Nashville too.
Houston slipped just slightly in the ranks from third in 2025 to fifth in 2026, followed closely by Nashville. Industrial is the preferred property type for acquisitions in Houston, while office received a net sell rating in the 2026 survey.
Austin is notable for dropping out of the top 20 overall—from 15th to 30th place. However, the largest downward movements occurred among Tennessee markets, with Memphis down 19 spots and Knoxville down by 18 spots.
South Central economies to watch
Top ranked Dallas/Fort Worth leads projected job gains over the next five years, according to Moody’s Analytics, followed closely by the outlook for fifth-ranked Houston. San Antonio leads the Texas markets for its projected per capita income growth rate, while Austin leads for its job growth rate, despite higher absolute gains expected in Dallas/Fort Worth and Houston.
Housing costs are increasingly a challenge in these markets, but construction in Austin and income growth in San Antonio bear watching for the potential improvement to affordability. Meanwhile, dynamic demographic changes are boosting incomes in New Orleans and Northwest Arkansas.
Northeast Ascending
The Northeast boasts the most upward movement in the rankings with 10 of 15 markets gaining in the ranks for real estate prospects. Six of the 15 Northeast markets are in the top 20 overall markets to watch.
The average Northeast real estate prospects score of 2.87 is above the overall average score and reflects a wide dispersion of scores in this region’s rankings. Four Northeast markets—Jersey City, Brooklyn, Northern New Jersey, and Manhattan—are in the top 10 markets to watch, while four regional markets—Baltimore, Buffalo, Providence, and Hartford—are in the bottom 10.
Offices in Brooklyn and Manhattan are considered a net buy according to investor buy-hold-sell recommendations in the survey. Northern New Jersey is considered a net buy for apartments, while second-ranked Jersey City is broadly considered for acquisitions outside of office properties.
The largest upward movement occurred in Portland, Maine, which jumped 28 spots from the bottom of the 2025 overall ranks to the middle of the pack this year. Pittsburgh, Philadelphia, and Westchester/Fairfield each rose more than 10 spots in the overall ranks to land in the middle of Northeast regional prospects in 2026.
Northeast economies to watch
The greater New York City area is projected by Moody’s Analytics to add a significant number of jobs over the next five years, although this equates to a low growth rate. Slower growth rates for primary Northeast region markets allow two overlooked areas to shine for their regional economic growth prospects—Pittsburgh and Portland. Low relative business costs in Pittsburgh allow for elevated economic output per capita and a strong per capita income growth rate through 2030. Portland, Maine, has a similar five-year growth outlook and affordable housing may attract new residents as the local economy expands.
Midwest Led by Motor City
Detroit tops the list of Midwest regional prospects in 2026, as it did last year, and remains the only Midwest market in the top 20 overall. Across property types, the industrial sector is considered the best buying opportunity in Detroit. The average real estate prospects score for the Midwest is 2.75, as more markets move down than up in the survey results.
Seven of 13 Midwest markets moved down in the ranks in 2026, led by Cincinnati and Minneapolis/St. Paul, which shifted from the top half of overall prospects last year to the bottom half this year. Indianapolis and St. Louis also moved down in the ranks by 10 spots each.
On a positive note, Madison and Chicago had significant upward momentum in real estate prospects this year. Madison rose 26 spots in the overall rankings from the bottom of Midwest prospects last year to the middle of regional rankings. Chicago moved up 11 spots from the middle of overall real estate prospects to the top third.
Midwest economies to watch
Cleveland and Milwaukee ranked in the bottom third of Markets to Watch but are among the top Emerging Trends markets for their projected per capita income growth rate, at roughly 2.0 percent per year through 2030. These markets also have a relatively young population with nearly one-third of residents in each market under 24 years old. Milwaukee housing affordability is in line with the national average, while both markets have attractive costs for doing business.
West Wobbles, Tech Markets Improve
The West region has the lowest average real estate prospects score among the five regions, at 2.68 in 2026. Only two—Phoenix and Orange County—of the 20 West region markets rank among the top 20 markets for overall real estate prospects, while nine West markets rank in the bottom third overall. In Phoenix, retail is the favored property type for acquisitions, while industrial and apartment properties are favored in Orange County.
Nearly half of the West region markets moved down the rankings in 2026, with five of those markets moving down by 10 or more places. Salt Lake City is notable among them for moving down 14 spots to drop out of the top 20 overall, although it still ranks highly among markets in the West region.
Two markets—San José and San Francisco—moved up over 20 places in the 2026 ranking, indicating a brighter outlook for real estate prospects in Northern California. These tech-centric markets rose from the bottom third of all markets to the middle of the overall market rankings in 2026.
Of the two West region markets in the top 20, Phoenix held its 10th place showing, while Orange County moved up 11 places to rank 18th in 2026.
West economies to watch
Despite wobbling in the market rankings this year, 11 of 20 West region markets are included among the top markets for per capita income and job growth over the next five years, according to Moody’s Analytics.
The high-income markets in the Bay Area are expected to see continued per capita income growth through 2030, supporting consumer spending and residential rents despite below average job growth rates. While Orange County is the lone California market in the Emerging Trends top 20, it is neighboring Los Angeles and the Inland Empire that have the highest projected job and per capita income growth rates in Southern California.
Boise, which ranked 62nd among Markets to Watch, leads Moody’s Analytics national job growth rate projections through 2030. This small market has a young population and relatively affordable housing as potential economic drivers, like the drivers that spurred the expansion in Salt Lake City, which has the seventh-highest five-year average annual job growth forecast across Emerging Trends markets.
As real estate industry participants navigate through the fog, course corrections may be warranted depending on how the economies to watch align with market expectations.
