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An entirely different type of real estate investor will be popping champagne after the latest report on residential real estate price hikes in Dallas.
As of October, Redfin Corp. found that the median real estate price rose by 14.4% year-over-year. That’s more than double the national median price increase of 6.6%. The median price tag for the sold units stood at $429,000 — a sum already unfeasible for many who’d be thrilled to add Dallas real estate to their portfolios. The good news is that they won’t need to go empty-handed because of one crucial market development.
The founders of Nada, a startup behind the disruption in question, wanted to allow anyone to profit off the historically most reliable asset class by lowering the barrier to entry. Through the innovation introduced by its latest product called Cityfunds, investors can own a piece of the entire city’s real estate market for as little as $250. The mechanism at play is a modernized version of a real estate acquisition tactic that has brought billions to America’s wealthiest in the last 60 years. But for the first time, you can buy stock in the entire city’s residential real estate market.
Through Cityfunds, Nada creates a diversified, index-like fund made of single-family residences in large urban centers. Investors then buy shares of each individual fund, hoping that the prices will continue to climb.
Although it’s impossible to predict the future, you can look at a few data points suggesting that Dallas’s real estate prices are just warming up. Median income has been on the upswing in recent years, growing by 20% between 2015 and 2020 to reach $54,747 per year, while the cost of living remained low compared to urban centers of similar size.
Perhaps even more important is that the job market is blooming. A quarter of Dallas’s population earns more than $100,000 annually, meaning that a significant portion of Dallas residents are able to afford single-family homes. According to Bloomberg, Dallas has secured 661,000 jobs since 2010, while Forbes ranked it as the No. 1 city for jobs in 2017. That may be one of the defining reasons Dallas is the fifth-fastest-growing city in the U.S. More than 97,000 people moved to the Dallas area between June 2020 and July 2021 — an astounding 7% population influx in little over a year.
These stats likely bring a smile to thousands of investors who purchased Dallas’s $10 shares, as does the recently published performance report on the company’s Dallas assets. The portfolio appreciated by 14% year-to-date. Any day now, Nada will make the stocks liquid through its stock-trading option. When that happens, those $10 shares may witness a substantial spike in value.
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