Erie is home to the best residential real estate investment market in Pennsylvania.
The 16503 zip code in Erie presents the greatest opportunity for the best real estate investments among the 8,668 individual real estate markets in Pennsylvania 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.
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Data sources
Most of the data in this article comes from the Zillow Home Value Index and the U.S. Census American Community Survey.
We update our data when the original sources update their data, usually monthly. Sometimes we'll update data more frequently.
Clever also performs regular quality checks to identify outdated data, broken data connections, and other data issues that may arise.
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5 best places to invest in Pennsylvania
| Rank | City | InvestScore | Affordability | Property value appreciation |
|---|---|---|---|---|
| 1 | Erie | 100 | 2.1 | 41% |
| 2 | Freeland | 99.6 | 2.3 | 47% |
| 3 | Shenandoah | 97.1 | 1.1 | 58% |
| 4 | Chester | 94.3 | 2.7 | 53% |
| 5 | Nanticoke | 94.2 | 2.7 | 50% |
🚨 This article is for informational purposes only. It isn't intended to convey financial or legal advice. We recommend you talk to a real estate agent or real estate attorney when buying a home in Pennsylvania.
1. Erie
We've identified the 16503 zip code in Erie as Pennsylvania's best real estate investment market. Here's why.
🔎 Key data about Erie (16503)
| Data point | Value | Rank in state (of 8,668 markets) |
|---|---|---|
| InvestScore | 100 | Highest |
| Typical property value | $69,105[1] | 8th lowest |
| Five-year appreciation | 41%[2] | 96th highest |
| Household income | $32,340[3] | 622nd highest |
| Affordability ratio | 2.1 | 37th most affordable |
| Five-year population growth | 3.6%[4] | 54th highest |
| Unemployment rate | 4.8%[5] | 13th lowest |
| Property taxes | $1,426[6] | 39th lowest |
| Educational attainment | 12%[7] | 371st highest |
Erie (zip code 16503) is the best residential real estate investment market in Pennsylvania. It has the 96th highest property value appreciation among markets we evaluated, with a 41% appreciation of the typical property over the last five years.
Erie is the 37th most affordable market among the 8,668 Pennsylvania markets we evaluated, with an affordability ratio of 2.1.
2. Freeland
The 18224 zip code in Freeland is the runner-up spot for the best real estate investments in Pennsylvania.
🔎 Key data about Freeland (18224)
| Data point | Value | Rank in state (of 8,668 markets) |
|---|---|---|
| InvestScore | 99.6 | 2nd highest |
| Typical property value | $163,568[1] | 99th lowest |
| Five-year appreciation | 47%[2] | 40th highest |
| Household income | $69,620[3] | 405th highest |
| Affordability ratio | 2.3 | 50th most affordable |
| Five-year population growth | 1.3%[4] | 204th highest |
| Unemployment rate | 5.1%[5] | 14th lowest |
| Property taxes | $1,581[6] | 50th lowest |
| Educational attainment | 20%[7] | 327th highest |
The 18224 zip code in Freeland features a typical property value of $163,568, the 99th lowest in the state.
Property values have appreciated 47% over the past five years, the 40th highest increase among evaluated markets in the state. Freeland homes have an affordability ratio of 2.3, the 50th most affordable in the state.
3. Shenandoah
The 17976 zip code in Shenandoah comes in at No. 3 in our ranking of the best residential real estate investment markets in Pennsylvania.
🔎 Key data about Shenandoah (17976)
| Data point | Value | Rank in state (of 8,668 markets) |
|---|---|---|
| InvestScore | 97.1 | 3rd highest |
| Typical property value | $60,861[1] | 7th lowest |
| Five-year appreciation | 58%[2] | 17th highest |
| Household income | $57,587[3] | 535th highest |
| Affordability ratio | 1.1 | 3rd most affordable |
| Five-year population growth | -1.2%[4] | 491st highest |
| Unemployment rate | 3.9%[5] | 7th lowest |
| Property taxes | $1,027[6] | 9th lowest |
| Educational attainment | 14%[7] | 364th highest |
With a typical property value of $60,861, Shenandoah's 17976 zip code features the 7th lowest property values in the state.
Shenandoah homes have an affordability ratio of 1.1, the 3rd most affordable among the markets we evaluated.
4. Chester
The 19013 zip code in Chester ranks No. 4 among Pennsylvania's residential real estate investment markets.
🔎 Key data about Chester (19013)
| Data point | Value | Rank in state (of 8,668 markets) |
|---|---|---|
| InvestScore | 94.3 | 4th highest |
| Typical property value | $113,451[1] | 30th lowest |
| Five-year appreciation | 53%[2] | 27th highest |
| Household income | $41,261[3] | 27th highest |
| Affordability ratio | 2.7 | 110th most affordable |
| Five-year population growth | 1.1%[4] | 228th highest |
| Unemployment rate | 4.5%[5] | 11th lowest |
| Property taxes | $1,668[6] | 64th lowest |
| Educational attainment | 14%[7] | 362nd highest |
Property values in Chester's 19013 zip code have seen the 27th highest increase among evaluated markets in the state, with an appreciation of 53% over the past five years.
Chester's affordability ratio of 2.7 makes it the 110th most affordable among the 8,668 markets we evaluated.
5. Nanticoke
The 18634 zip code in Nanticoke rounds out our top five residential real estate investment markets in Pennsylvania.
🔎 Key data about Nanticoke (18634)
| Data point | Value | Rank in state (of 8,668 markets) |
|---|---|---|
| InvestScore | 94.2 | 5th highest |
| Typical property value | $164,697[1] | 100th lowest |
| Five-year appreciation | 50%[2] | 33rd highest |
| Household income | $61,439[3] | 33rd highest |
| Affordability ratio | 2.7 | 97th most affordable |
| Five-year population growth | 1.1%[4] | 224th highest |
| Unemployment rate | 5.1%[5] | 14th lowest |
| Property taxes | $1,731[6] | 69th lowest |
| Educational attainment | 20%[7] | 328th highest |
Property values in Nanticoke's 18634 zip code rose 50% over the last five years, ranking the city 33rd highest among evaluated markets in Pennsylvania.
Nanticoke homes have an affordability ratio of 2.7, the 97th most affordable among the markets we evaluated.
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Frequently asked questions
See our article Steps to Buying Your First Rental Property to learn the basics of real estate investing for beginners.
You'll learn the importance of setting goals, picking the right market, and more.
Cash investors often use what's called the 70% rule, which suggests they should pay around 70% of a house's after-repair value minus the cost of renovations.
By buying for about 70% of the after-repair value, they're positioning themselves to pay for repairs and other costs, and to lock in a profit.
The 70% rule isn’t a hard-and-fast formula, but a quick guideline investors use to evaluate potential deals.
Investing in residential real estate can be one of the best passive real estate investments in Pennsylvania.
Residential real estate offers accessible passive income and the potential to compound your original investment.
Renting out residential units is the top way to invest in real estate. House hacking also offers a great opportunity for passive real estate investment income.
How we rank residential real estate markets in Pennsylvania
To determine the best real estate investments in Pennsylvania we evaluated 8,668 markets on eight metrics, and then assigned an InvestScore based on a proprietary weighting framework. Each market corresponds to a specific zip code in Pennsylvania.
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.
- 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.
- 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.
- 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.
- 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.
- 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.
- Property tax: This is the median real estate property tax paid in the area, according to U.S. Census estimates.
- 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.
