Jackson's Real Estate Market: A Hidden Gem in 2020?

When a company backed by Wall Street private equity starts buying up rental property in a market, it’s a sign that real estate investors should sit up and take notice.

That’s exactly what’s been occurring in Jackson and the tri-county area, with one firm purchasing literally hundreds of homes to rent.

Jackson is located along the Pearl River near the south-central part of the state and is the capital of Mississippi. The city is home to more than a dozen colleges and universities, a growing number of young professional workers, and some very affordable real estate.

The economy of Jackson is driven by the government, financial services, manufacturing, and agricultural sectors. Gospel, blues, and R&B help make Jackson famous, and the city hosts numerous cultural events each year such as the Crossroads Film Festival and the Mississippi State Fair.

Keep reading to learn more about the Jackson real estate market in 2020.

>>Explore Roofstock's Jackson investment properties here.

 

Population Growth

Jackson is one of the three regions of Mississippi that has seen the largest population gain over the past eight years, according to The Meridian Star.

Key Population Stats:

  • City of Jackson is home to nearly 175,000 residents with more than 575,000 living in the tri-county metro area.
  • Jackson MSA consists of Hinds, Madison, and Rankin counties.
  • Jackson is the capital city of Mississippi, the most populous in the state, and part of the 93rd largest metro area in the U.S.
  • Over the past five years the population of the Jackson Region has grown by about 0.5%.
  • Median age in Jackson is 32.4 years.
  • Greater Jackson has a labor force participation rate of 62.4%, about 5% higher than the entire state.

 

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Job Market

Mississippi should see the fastest job growth in four years, with the job market especially strong in Jackson and the south-central part of the state, as reported by Kiplinger.

Key Employment Stats:

  • GDP of Jackson MSA is nearly $25.5 billion, according to the Federal Reserve Bank of St. Louis, and has grown by about 8.5% since 2020.
  • Year-over-year job growth in Jackson declined slightly by 0.2%.
  • Job growth in the state will be 0.8%, with much of the employment gain coming from the Greater Jackson Region.
  • Unemployment rate in Jackson is 3.2% and has been consistently trending downward since 2010.
  • Top employment sectors in the Jackson MSA include manufacturing, retail trade, health care and social assistance, professional services, and finance and insurance.
  • Largest employers in Greater Jackson include Nissan North America, Madison County School District, Perco Foods of MS, technical service and document control company Conduent, Vantec Hitachi Transport System, Yates Services, Levi Strauss & Co., and Comcast.
  • Cal-Maine Foods, EastGroup Properties, and Trustmark Corporation are three publicly traded companies headquartered in the Jackson MSA.
  • Major colleges and universities in the Jackson area include Jackson State University, University of Mississippi Medical Center, Mississippi College, and Millsaps College.
  • 85.6% of Jackson residents have a high school degree or higher, while 27.5% hold a bachelor’s degree or advanced degree.
  • I-55 near Jackson connects with Memphis, St. Louis, Chicago, and New Orleans while I-20 is the major east-west interstate to all major metro areas in the South.
  • Canadian National Railway and Grenada Railway are two freight rail lines serving the Jackson Region.
  • Major cargo ports of Vicksburg, Gulfport, and Pascagoula are all within 200 miles or less of Jackson.
  • Jackson-Medgar Wiley Evers International Airport (JAN) provides non-stop service to major metro areas including Atlanta, Chicago, Dallas, Denver, Houston, and Orlando.

 

Real Estate Market

MoneyWise recently reported that home values in Mississippi are up more than 5% from a year ago, with median single-family home worth about $129,300 in the state. Despite the rising prices of homes, Business Insider ranks the state and the 2nd-cheapest place to buy a home, while FOX Business rates Mississippi as the least expensive state in the country to live.

In Jackson, median home values are more than 50% below the state average. Last year, values actually decreased slightly, creating a potential window of opportunity for rental property investors considering the Jackson, Mississippi real estate market.

Key Market Stats:

  • The median listing price of a house in Jackson is $115,500 according to Zillow (as of January 2020).
  • Square foot listing price in Jackson is $105 vs. $116 per square foot in the Jackson metropolitan area.
  • Home values in Jackson declined by 1.4% last year but have increased by 38% since May 2014 based on the Zillow Home Value Index.
  • Average days on market is 135 (as of December 2019).
  • During the listing period 13.3% of the houses for sale in Jackson have a reduction to the listing price.
  • 2.9% of the homes in Jackson have a delinquent mortgage vs. 1.1% U.S. average.
  • The Capital Neighbors neighborhood in Jackson has the highest median home value, while West Park is the neighborhood with the lowest median value.



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Attractive Renters’ Market

Last summer, a company backed by a Wall Street private equity firm purchased more than 500 homes in the Jackson metro area to use as rental properties, according to the Clarion Ledger. The South Carolina-based firm purchased houses across the entire Jackson tri-county area, including Jackson, and the suburban cities like Canton, Brandon, and Ridgeland.

Key Market Stats:

  • Median rent in Jackson is $872 per month vs. $1,305 per month for the metropolitan area.
  • Rents in Jackson increased by an average of 2% over the past year, according to RENTCafé.
  • 55% of the housing units in Jackson rent for between $701 and $1,000 per month.
  • 39% of the households in Jackson are renter-occupied.
  • Neighborhoods in Jackson with the lowest rents include Appleridge, Briarcliff Circle, and Washington where rents average $652 per month.
  • Neighborhoods in Jackson with the highest rents include Downtown, Belhaven, and Virden where rents range between $1,043 and $1,141 per month.



Historic Price Changes & Housing Affordability

Two methods that rental property investors use to analyze markets are reviewing the historic change in housing prices and affordability. Price changes can help forecast possible equity growth over the long term, while the affordability of housing is one indicator of how strong a specific area may be for renters.

Each quarter the FHA releases up-to-date data on the change in home prices for all markets across the U.S. The most recent FHA 2019 Q3 House Price Index report for the Jackson MSA (including purchase and refinance transactions) shows:

  • Over the past five years home prices have increased in Jackson by 15.1%
  • Over the past year prices have increased by 3.68%
  • Over the last quarter home prices in Jackson have increased by 0.47%

Housing affordability is calculated by comparing the median family income in a market to the median cost of a single-family home. A good resource for HAI (housing affordability index) data is the report published by the National Association of Realtors (NAR).

The NAR uses an affordability index of 100 in its HAI report, then ranks each market in the U.S. against this baseline index. The higher the HAI of a specific market is above 100, the more affordable it is to purchase a home. 

It’s important to note that when the NAR calculates affordability, the organization assumes a buyer will use a conventional loan with 20% down to purchase an existing single-family home.

Based on the NAR’s latest report, the HAI for the Jackson MSA was 190.3 in 2018, the most recent year available. This means that the median family has slightly more than 1.9 times the needed income to purchase a median priced, existing single-family home with a conventional mortgage in the Jackson metropolitan area.

 

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Quality of Life

Jackson is described as the “City with Soul” thanks to its Southern hospitality, friendly locals, live music, and the city’s pivotal role in the civil rights movement. Newcomers to Jackson are pleasantly surprised to learn that there’s much more to the area than meets the eye.

Key Quality of Life Stats:

  • Forbes ranks Jackson among the best places in the nation for cost of doing business, job growth, and education.
  • Cost of living in Jackson is 4% below the national average.
  • Niche.com gives the region strong ratings for diversity and nightlife and ranks Jackson among the best cities for young professionals in America.
  • Good economy, parks, nightspots, and college campuses are some of the factors cited by Livability.com that make Jackson a great place to live.
  • Madison County Public Schools (near Jackson) receives an A+ grade and is ranked #1 for the most star students in Mississippi.
  • Climate in Jackson is humid subtropical, with rain throughout the year and rare winter snow.
  • Dining scene in Jackson ranges from smaller mom-and-pop eateries to restaurants with James Beard award-winning chefs.
  • Cultural organizations in Jackson include Ballet Mississippi, Jackson State University Botanical Garden, Mississippi Civil Rights Museum, and the Mississippi Symphony Orchestra.
  • Mississippi Braves – the Southern League AA affiliate of the Atlanta Braves – play out of Trustmark Park in nearby Pearl.
  • U.S. News & World Report ranks Mississippi Baptist Medical Center and Batson Children’s Hospital among the best hospitals in Jackson.

 

Get Out the Map

Where to begin your search? Roofstock created a heat map of Jackson based on our Neighborhood Rating, a dynamic algorithm that enables you to make informed investment decisions by measuring school district quality, home values, employment rates, income levels and other vital investment criteria.

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DARK GREEN: 4-5 star neighborhood
LIGHT GREEN: 3.5-4 star neighborhood
YELLOW: 2.5-3 star neighborhood
ORANGE: 2 star neighborhood
RED: 1 star neighborhood

Ready to invest in the Jackson housing market? If you haven't already done so, create your free Roofstock account and set up alerts. We'll notify you when we have a Jackson investment property that matches your search criteria.

 

 

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Jeff Rohde

Author

Jeff Rohde

Jeff has over 25 years of experience in all segments of the real estate industry including investing, brokerage, residential, commercial, and property management. While his real estate business runs on autopilot, he writes articles to help other investors grow and manage their real estate portfolios.

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