Investors and homeowners looking for the next hot property market should keep an eye on two trends: jobs and affordability.
That's according to new research from PwC and the Urban Land Institute, which on Wednesday published their annual Emerging Trends in Real Estate report. It's based on economic data and survey responses and interviews with property investors, developers, brokers and other professionals involved in the real estate business.
Some of the cities that landed near the top of the list in past years have been bumped down in this year's ranking because of affordability issues. San Francisco, for instance, ranked No. 2 just a few years ago but has fallen to 10th place because of high costs, said Mitch Roschelle, a partner and real estate research leader at PwC.
"The skills that the economy needs today are different, such as people who can write code," Roschelle said. "They're going where the jobs are but also where they afford to live."
UBS recently cited San Francisco as having the highest risk for being in a real estate bubble of any American city. Home values there have jumped 66 percent in the last five years, compared with a 22 percent gain across the U.S., according to Zillow data.
A vibrant millennial population may also indicate where home values could rise, given that the generation is now entering the real estate market. About half of all homebuyers are younger than 36, according to Zillow.
Read on to learn about the five best and worst property markets around the U.S.