Top 5 Residential Real Estate Investment Markets in California

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By Trent Seigfried Updated May 24, 2024
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Edited by Michael Yessis

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Thousand Palms is home to the best residential real estate investment market in California.

The 92276 zip code in Thousand Palms presents the greatest opportunity for investors among the 4,420 individual real estate markets in California we evaluated. We looked at property values, population trends, and six other metrics for each market. We used that data to calculate each market's InvestScore.

Top 5 California residential real estate markets

RankCity InvestScore Affordability Property value appreciation
1Thousand Palms1005.458.42%
2Bakersfield98.24.150.78%
3Madera984.449.25%
4Twentynine Palms97.45.176.90%
5Visalia94.74.950.37%
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1. Thousand Palms

We've identified the 92276 zip code in Thousand Palms as California's best real estate investment market. Here's why.

πŸ”Ž Key data about Thousand Palms

Data pointValueRank in state (of 4,420 markets)
Zip code92276N/A
InvestScore 100Highest
Typical property value $371,138[1]102nd lowest
Five-year appreciation 58.42%[2]124th highest
Household income $68,504[3]859th highest
Affordability ratio 5.477th most affordable
Five-year population growth 13.2%[4]74th highest
Unemployment rate 3.5%[5]81st lowest
Property taxes $2,021[6]74th lowest
Educational attainment 19.5%[7]841st highest
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Thousand Palms (zip code 92276) is the best residential real estate investment market in California. It has the 124th highest property value appreciation among markets we evaluated, with a 58.42% appreciation of the typical property over the last five years.

Thousand Palms is the 77th most affordable market among the 4,420 California markets we evaluated, with an affordability ratio of 5.4.

2. Bakersfield

The 93311 zip code in Bakersfield is California's second-best residential real estate investment market.

πŸ”Ž Key data about Bakersfield

Data pointValueRank in state (of 4,420 markets)
Zip code93311N/A
InvestScore 98.22nd highest
Typical property value $461,667[8]206th lowest
Five-year appreciation 50.78%[9]295th highest
Household income $113,616[10]325th highest
Affordability ratio 4.17th most affordable
Five-year population growth 12.6%[11]83rd highest
Unemployment rate 4%[12]147th lowest
Property taxes $4,250[13]444th lowest
Educational attainment 40.7%[14]444th highest
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The 93311 zip code in Bakersfield features a typical property value of $461,667, the 206th lowest in the state.

Property values have appreciated 50.78% over the past five years, the 295th highest increase among evaluated markets in the state. Bakersfield homes have an affordability ratio of 4.1, the 7th most affordable in the state.

3. Madera

The 93636 zip code in Madera comes in at No. 3 in our ranking of residential real estate investment markets in California.

πŸ”Ž Key data about Madera

Data pointValueRank in state (of 4,420 markets)
Zip code93636N/A
InvestScore 983rd highest
Typical property value $529,640[15]266th lowest
Five-year appreciation 49.25%[16]341st highest
Household income $119,375[17]279th highest
Affordability ratio 4.414th most affordable
Five-year population growth 10.3%[18]110th highest
Unemployment rate 4.1%[19]155th lowest
Property taxes $2,943[20]231st lowest
Educational attainment 37.9%[21]487th highest
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With a typical property value of $529,640, Madera's 93636 zip code features the 266th lowest property values in the state.

Madera homes have an affordability ratio of 4.4, the 14th most affordable among the markets we evaluated.

4. Twentynine Palms

The 92277 zip code in Twentynine Palms ranks No. 4 among California's residential real estate investment markets.

πŸ”Ž Key data about Twentynine Palms

Data pointValueRank in state (of 4,420 markets)
Zip code92277N/A
InvestScore 97.44th highest
Typical property value $259,485[22]22nd lowest
Five-year appreciation 76.90%[23]6th highest
Household income $50,957[24]6th highest
Affordability ratio 5.155th most affordable
Five-year population growth 14.1%[25]63rd highest
Unemployment rate 6.8%[26]683rd lowest
Property taxes $1,424[27]19th lowest
Educational attainment 25.1%[28]719th highest
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Property values in Twentynine Palms's 92277 zip code have seen the 6th highest increase among evaluated markets in the state, with an appreciation of 76.90% over the past five years.

Twentynine Palms's affordability ratio of 5.1 makes it the 55th most affordable among the 4,420 markets we evaluated.

5. Visalia

The 93292 zip code in Visalia rounds out our top five residential real estate investment markets in California.

πŸ”Ž Key data about Visalia

Data pointValueRank in state (of 4,420 markets)
Zip code93292N/A
InvestScore 94.75th highest
Typical property value $379,632[29]109th lowest
Five-year appreciation 50.37%[30]303rd highest
Household income $77,670[31]303rd highest
Affordability ratio 4.938th most affordable
Five-year population growth 10.5%[32]107th highest
Unemployment rate 4.8%[33]281st lowest
Property taxes $2,358[34]123rd lowest
Educational attainment 18.6%[35]862nd highest
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Property values in Visalia's 93292 zip code rose 50.37% over the last five years, ranking the city 303rd highest among evaluated markets in California.

Visalia homes have an affordability ratio of 4.9, the 38th most affordable among the markets we evaluated.

How we rank residential real estate markets in California

We evaluated 4,420 markets on eight metrics, and then assigned an InvestScore based on their weighted and combined rankings. Each market corresponds to a specific zip code in California.

What is InvestScore?

InvestScore is a score on a scale of 0 (worst in state) to 100 (best in state) that estimates the residential real estate investment potential of a given market. It takes into account a suite of key data points for each city.

  • Typical property value: This measures the typical home value in this zip code, according to the Zillow Home Value Index. It reflects the typical value for homes in the 35th to 65th percentile range, including all homes, with the numbers smoothed and seasonally adjusted. We prefer lower property values, which indicate both more room for growth and a greater ease of purchase. We assign a weight of 20% to typical property values.
  • Property value appreciation: This measures how much property values have increased in the area over the past five years, according to the Zillow Home Value Index. We prefer a higher appreciation, as it indicates better returns on housing. However, past performance isn't indicative of future results. We assign a weight of 20% to property value appreciation.
  • Median household income: This is the inflation-adjusted median household income in the zip code, according to U.S. Census American Community Survey data. We prefer a higher household income, as it indicates local residents have more income to spend on housing. We assign a weight of 10% to median household income. We assign a weight of 10% to median household income.
  • Affordability ratio: This is the ratio of the typical home value to the median household income in the area. A lower ratio is better because it means more households can afford a home, which indicates higher demand. We assign a weight of 15% to the affordability ratio.
  • Population growth: This is how much the area's population has grown over the past five years, according to U.S. Census estimates. Higher is better, as it indicates residents are moving into the area at a rapid clip. We assign a weight of 10% to population growth.
  • Unemployment rate: This is the unemployment rate in the area, according to U.S. Census data. We prefer a lower rate, as it indicates the availability of steady employment in the area, meaning residents will find it much easier to afford homes. We assign a weight of 15% to unemployment rate.
  • Property tax: This is the median real estate property tax paid in the area, according to U.S. Census estimates. We assign a weight of 10% to property tax.
  • Educational attainment: This is the percentage of residents in the area that have obtained a bachelor's degree or better, according to U.S. Census estimates. We prefer a higher rate because it indicates  local residents who have higher earning potential and thus should be able to afford homes. We assign a weight of 15% to educational attainment.

Disclaimer: The information contained in this article isn't intended as, and shall not be understood or constituted as, financial advice. The information in this article isn't a substitute for financial advice from an investment professional or real estate agent who is aware of the facts and circumstances of your financial situation or the specifics of any individual property.

Article Sources

[1] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[2] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[7] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[8] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[9] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[14] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[15] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[16] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[21] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[22] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[23] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[28] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.
[29] Zillow – "Zillow Home Value Index". Updated March 31, 2024.
[30] Zillow – "Zillow Home Value Index, difference over last five years". Updated March 31, 2024.
[35] U.S. Census – "U.S. Census Table S1501 - Educational Attainment 2018-2022". Updated 2018-2022.

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