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11 Satellite Cities Poised to Thrive in 2017

David Payne, Staff Economist, The Kiplinger Letter


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It's been a slow climb back from the Great Recession for the nation's major metropolitan areas. Yet job seekers often overlook the small and medium cities located near or relatively near the big hubs. As the big metro areas recover, these smaller "satellite" cities benefit from spreading regional business growth, while offering lower housing and commuter costs, putting less of a squeeze on employee salaries than more expensive, congested places a few hours away.

That can mean both abundant job opportunities and budget-friendly home prices for folks looking to relocate. Check out these 11 up-and-coming satellite cities where the job markets are hot but the cost of living won't eat all of your paycheck. All of these cities' job markets have been growing faster than the national average, most have lower jobless rates than the national average, and all are expected to continue to outperform economically this year.

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St. George, Utah


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Close by: Las Vegas (100 miles SW), Salt Lake City (300 miles NE)

Employment growth in 2016: 6.1% (national growth: 1.8%)

Latest unemployment rate (Dec. 2016): 3.2% (national rate: 4.7%)

Median home price: $345,000 in the city, up 10% from last year ($235K to $300K in the suburbs)

St. George has seen five consecutive years of 5%-plus job growth. Much of that has come in professional and business services, health care, retail, manufacturing and hospitality services. Three of its biggest employers are SkyWest Airlines, Dixie Regional Medical Center and Sunroc, a regional building supplies company. Retirees wary of Vegas find the warm winters in the Utah desert to their liking here. One of the most scenic natural wonders in the country, Zion National Park, is just a 45-minute drive to the east.

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Bend/Redmond, Oregon


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Close by: Portland (170 miles NW)

Metro population: 114,000

Employment growth in 2016: 5.3%

Unemployment rate: 4.4%

Median home price: $360,000, up 9% from last year

On the east-facing slopes of the Cascade mountains, these twin cities have enjoyed robust job growth four years running. The trend is expected to continue. Tourism and the hospitality industry are integral to this region's economy. Retirees like the outdoor activities (the east side of the Cascades gets more sunny days than the west side). Major employers include St. Charles Medical Center; Keith Manufacturing, makers of storage and conveying systems; and Sunriver Resort, an upscale vacation destination. The area is also seeing strong job growth in professional and business services, health care, retail, construction and manufacturing.

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Cleveland, Tennessee


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Close by: Chattanooga (40 miles SW), Atlanta (120 miles SE)

Metro population: 56,000

Employment growth in 2016: 4.9%

Unemployment rate: 4.4%

Median home price: $165,000, up 10% from last year

Home of Lee University, this less-famous Cleveland is quietly benefiting from strong growth in jobs in professional and business services, health care, retail and hospitality. Major employers include Whirlpool (it has a premium kitchen-appliances division and distribution outlet here), Tennova Healthcare and Amazon.com. Its 800 acres of industrial parks include manufacturing facilities and outlets for Volkswagen, Duracell, Mars and Bayer. It helps that Cleveland, with its views of the Great Smoky Mountains, is also in a state with no income tax.

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Prescott/Prescott Valley, Arizona


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Close by: Phoenix (100 miles S)

Metro population: 82,000

Employment growth in 2016: 4.6%

Unemployment rate: 4.2%

Median home price: $321,000, up 9% from last year

Prescott is a popular retirement and tourist alternative to the state capital. The area is cooler than Phoenix because its elevation is 4,000 feet higher, and the air is cleaner outside of the Phoenix basin. It is experiencing rapid job growth, driven by population growth. The biggest gains are in professional and business services, hospitality, health care and retail. Major employers include Yavapai Regional Medical Center; a Lockheed Martin training center; Superior Industries, which manufactures equipment for crushing, washing and conveying bulk materials; and Sturm, Ruger & Co., a firearms manufacturer which makes pistols here. Prescott is also home to Embry-Riddle Aeronautical University.

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Savannah, Georgia


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Close by: Charleston, S.C. (120 miles NE), Jacksonville, Fla. (170 miles S)

Metro population: 179,000

Employment growth in 2016: 4.0%

Unemployment rate: 4.9%

Median home price: $195,000, up 6% from last year

Gateway to the Atlantic Ocean just south of the South Carolina border, Savannah is not only a historic city with antebellum charm, but the fourth-busiest port in the United States. It saw a big jump in professional and business services jobs in 2016, along with strong growth in health care, retail and hospitality. The port authority is currently dredging the harbor to accommodate the biggest cargo ships, a project that will be completed in 2020. That means even more freight entering and leaving this already humming city. Major employers include Gulfstream Aerospace, Memorial Health, St. Joseph's/Candler hospitals, Marine Terminals Corp. and SSA Cooper, a marine cargo handling outfit. Ft. Stewart/Hunter Army Airfield also anchors the local economy.

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Reno/Sparks, Nevada


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Close by: Sacramento, Calif. (130 miles SW), San Francisco (220 miles SW)

Metro population: 334,000

Employment growth in 2016: 4.0%

Unemployment rate: 4.2%

Median home price: $305,000, up 9% from last year

Near the California border and 20 miles from Lake Tahoe, Reno and Sparks benefit from tourism, hospitality and gambling. Business services, health care, construction and transportation are also major employers. The University of Nevada at Reno is the second-largest university in the state.

The area was jump-started economically when Tesla opened its gigafactory in January 2017, just a half-hour's drive east of Reno. This is the largest facility in the world for making battery cells to power electric autos. It already employs more than 1,000 people. Tesla says it plans to add 1,000 more employees in early 2017, with a goal of a 6,500-person workforce sometime in 2018. The venture has attracted ancillary businesses such as Panasonic, which has plans to add 2,000 workers at its Reno operations in 2017. Other major employers include Renown Regional Medical Center, Peppermill Resort Spa Casino and International Game Technologies, a manufacturer of slot machines.

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Athens, Georgia


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Close by: Atlanta (75 miles W)

Metro population: 123,000

Employment growth in 2016: 4.0%

Unemployment rate: 4.8%

Median home price: $270,000; higher closer to the University of Georgia campus

The Athens area (Clarke County and Oconee County) is heating up as an alternative to big-city Atlanta, with the University of Georgia serving as both an incubator and hub of business development. Professional and business services and the hospitality industry are major drivers of job growth. Lots of construction jobs, too: Three new hotels have been added to the downtown area along with large student housing developments. Retirees, especially, are attracted to the educational pursuits and sports attractions that come with a college town, as well as major health care facilities. Other big employers include Athens Regional Medical Center, Caterpillar and Pilgrim's Pride, which operates a local food processing plant.

SEE ALSO: 23 Cheap Places Where You Will Want to Retire

College Station/Bryan, Texas


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Close by: Houston (100 miles SE), Austin (110 miles W), Dallas (180 miles N)

Metro population: 187,000

Employment growth in 2016: 3.9%

Unemployment rate: 3.4%

Median home price: $230,000, up 6% from last year

Located virtually equidistant from Houston and Austin, College Station is home to Texas A&M University. It and neighboring Bryan are following the path of Austin (the Lone Star State's capital, with its University of Texas campus) as the next up-and-coming regional center. Texas A&M has expanded enrollment from 40,000 to 60,000 in the past five years. Having a thriving university results in strong growth in jobs in professional and business services, health care, retail, hospitality and other services. The A&M Health Science Center and the veterinary school sponsor a facility for manufacturing vaccines, including 1 million inoculation doses for the avian flu. A bio corridor is developing around this and a GlaxoSmithKline facility. Sanderson Farms, one of the largest chicken suppliers in the United States, has a major processing facility just outside Bryan.

SEE ALSO: Housing Outlook, 2017: Home Prices Keep Climbing

Salem, Oregon


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Close by: Portland (50 miles N)

Metro population: 234,000

Employment growth in 2016: 3.5%

Unemployment rate: 4.3%

Median home price: $240,000, up 6% from last year

Salem is the capital of the Beaver State and a thriving satellite city in the fast-growing Willamette Valley. The area has become an affordable alternative to Portland, 90 minutes away during rush hour. Construction is also going strong, and 2016 saw a big jump in professional and business services jobs. Commercial real estate is booked solid. The Career Technical Education Center, a public-private partnership, has significantly improved graduation rates for its high school seniors.

Marion County is the largest food producer in the state, and a center for agricultural science and research. County voters approved a bond issue in 2014 to fund an agricultural extension service sponsored by Oregon State University. Other large employers include Salem Hospital; Willamette University; Norpac, a food processing company; Spirit Mountain Casino; and T-Mobile.

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Boise, Idaho


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Close by: Nothing really, but a satellite city nonetheless

Metro population: 324,000

Employment growth in 2016: 3.4%

Unemployment rate: 3.4%

Median home price: $245,000, up 10% from last year

Located in the southwest corner of the Gem State, Boise benefits as a regional alternative to Seattle, Portland, or Salt Lake City, all a six- to eight-hour drive away (but hey, this is the West, where folks are used to driving long distances).

Boise is the state capital, largest city in the state, and home of Boise State University, with its iconic blue-turfed football stadium. It's also one of the least expensive large metros in the wide-open spaces of the West. Local industries that are hiring briskly include health care, construction, manufacturing and finance. Boise is big on both agribusiness and semiconductors, and has many tech start-ups. Clearwater Analytics, a local start-up, now has a 10-story building downtown. The great outdoors is always close by with the Rocky Mountains and ski resorts. Big employers include St. Luke's health systems, Saint Alphonsus Regional Medical Center, Micron Technology, HP and the state government.

SEE ALSO: Kiplinger's State-by-State Guide to Taxes

Spokane, Washington


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Close by: Seattle (280 miles W)

Metro population: 304,000

Employment growth in 2016: 3.0%

Unemployment rate: 6.4%

Median home price: $195,000, up 11% from last year

Western Washington has Seattle; eastern Washington has Spokane, the number-two metro area in size but a more affordable alternative for newcomers to the Evergreen State. It is the home of Gonzaga University and is seeing robust job gains in professional and business services, health care, construction and transportation. Major employers include Providence Sacred Heart Medical Center & Children's Hospital, Deaconess Medical Center and the 92nd Air Refueling Wing at Fairchild Air Force Base.

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Copyright 2017 The Kiplinger Washington Editors