A neighbor of mine is selling his $725,000 home (worth about $200,000 six years ago.) He won’t stay in South Florida because, if he wants a comparable home, he’ll have to pay … well, about $725,000. And since his new tax bill would be based on his new purchase price, his property taxes would shoot up by about $12,000. Insurance would go up too. Not good for a newspaper man who’s about to retire.

So my neighbor is cashing out his inflated equity and moving to a city in the Southeast where he can buy a bigger, newer home on a larger lot for half the price. He’ll pay less in taxes than he’s paying now, he’ll have no mortgage, and he’ll have about $300,000 tax-free left over to play with. And he’s not the only one cashing out …

A recent story in The Sun Sentinel titled “Paradise Lost” began with the following:

“From her seat behind the rental counter at the U-Haul Center on State Road 84 near Interstate 95 in Fort Lauderdale, Belkis Lopez has noticed a shift in the past year. … More trucks are leaving town than arriving. … ‘A lot of people are getting out of here,’ Lopez said. ‘Working people who say they can’t afford living here, people who’ve been here 50 years, retirees who say their money can go a lot further up north.'”

As these “Bubble Market Refugees” cash out of overheated markets in New York, California, South Florida, and Las Vegas (to name just a few), they’re going to bolster new bull markets in select American cities. These are cities where there is a high quality of life, diversified economies, and there are still good real estate values.

You’ll find these in areas ranging from Texas to New Mexico, North and Central Florida, Georgia, and North Carolina. Select cities in these states are where the best real estate investment returns are likely to be over the next three to five years.

[Ed. Note: Justin Ford is the editor of Main Street Millionaire, ETR’s real estate investment program. On a teleconference call tomorrow, he’ll be talking about “The Five Best Value Cities in America.” Sign up for the call here.]

Justin Ford is an active investor in real estate and global stock markets. He is also a veteran financial writer. He has published, edited and written for over a dozen international investment newsletters, including launching the US version of the Fleet Street Letter, the oldest continuously published newsletter in the English Language.
He is the author of Seeds of Wealth, a program for getting children to adopt good money habits from an early age. He is the editor of the Seeds of Wealth Quarterly Investment Update Bulletin. He is a contributing editor and author to a number of books on personal finance, including Michael Masterson’s Automatic Wealth and Dr. Van Tharp’s Safe Strategies for Financial Freedom.