Texas, the second largest US State is the most attractive market for buying and developing real estate, with growth potential drawing investors in from coastal areas.
A new report shows that Texan cities Houston and Austin rank top of the charts as investment destinations for savvy property buyers, toppling former favourites San Francisco from the top spot.
The report, published by PricewaterhouseCoopers and the Urban Land Institute showed that several non-coastal markets such as Texas are drawing more property investors, partly because they offer higher yields than places such as San Francisco and Manhattan.
Smaller cities are also benefiting from employment growth with increasing numbers of people relocating to urban centres where the job prospects are.
Mitch Roschelle, partner at PricewaterhouseCoopers NY said: "Real estate demand is there because jobs are there. When jobs chase people, there's a knock-on real estate benefit".
Houston, ranking 2nd in the survey last year rose to the top slot on the back of an expanding energy industry, driving economic and employment growth in the city.
Austin, the state capital and home to the University of Texas, climbed to second place from seventh in 2013. The report showed that employers in Austin have the advantage of being able to recruit people into the area as well as sourcing staff locally.
Austin also enjoys a low cost of living with no personal income tax, a huge appeal to those seeking to relocate for improved job prospects and standard of living.
San Francisco remains important to investors with the report concluding that there is nothing inherently flawed in its property market, investors are simply seeking the higher yields available elsewhere in the US.
Manhattan's decline in the survey is likely to be due to the intense buying activity it has seen in recent years, particularly from Chinese investors. The resulting spiralling prices have put many properties out of reach for a large proportion of domestic investors, pushing investment capital out of the New York City borough towards the state of Texas.