I don't try to time the market. But I do choose markets that survive when the market turns.

There's a difference. Timing means guessing when to buy and when to sell based on where you think the economy is headed. Market selection means choosing locations with structural characteristics that protect your investment regardless of what the economy does.

One of those is gambling. The other is strategy.

Here's the framework we use at Top Tier to evaluate whether a market will hold up in a recession, and why Omaha keeps showing up at the top of our list.

The Five Pillars of a Recession-Resistant Market

1. Employment Diversity

This is the single most important factor. If a market depends on one employer or one industry, it's fragile. When that employer cuts jobs or that industry contracts, your tenants lose income, your vacancy spikes, and your rents drop.

The cities that got crushed in 2008 were overwhelmingly single-industry markets. Detroit with auto manufacturing. Las Vegas with hospitality and construction. Phoenix with real estate development. When the dominant industry failed, everything else failed with it.

A recession-resistant market has employment spread across multiple sectors with no single employer representing more than 5-10% of total employment.

Omaha's employment base includes:

Financial services: Berkshire Hathaway, Mutual of Omaha, First National Bank, TD Ameritrade (now Schwab)

Healthcare: Nebraska Medicine, CHI Health, Boys Town National Research Hospital

Agriculture and food processing: ConAgra, Valmont Industries, Scoular

Military: Offutt Air Force Base (more on this below)

Technology: Buildertrend, Flywheel, growing tech ecosystem

Transportation and logistics: Union Pacific Railroad headquarters

Insurance: A massive concentration of insurance companies, one of the largest in the country

No single sector dominates. If financial services contracts, healthcare keeps growing. If agriculture has a bad year, the military base doesn't care. This diversification isn't exciting. It doesn't make headlines. But it's the foundation that kept Omaha's unemployment rate below 4% even during the worst of the 2008-2009 recession when the national rate hit 10%.

2. Military Installations

Offutt Air Force Base is Omaha's secret weapon for real estate stability. It's the headquarters of U.S. Strategic Command, one of the most critical military installations in the country.

Here's why that matters for your rental portfolio:

5,000+ military and civilian employees with stable, recession-proof income

Guaranteed demand for rental housing from service members and contractors

BAH (Basic Allowance for Housing) that sets a rent floor. Service members receive a housing allowance that's adjusted annually. In the Omaha metro, BAH for an E-5 with dependents is approximately $1,500 per month. That isn't market-dependent. It's set by the Department of Defense.

The base isn't closing. STRATCOM is too strategically important. This isn't a base on the BRAC list. It's expanding.

Military bases anchor rental demand in a way that no private employer can match. The income is federally guaranteed. The demand is structurally permanent. And the surrounding communities benefit from the economic multiplier effect of thousands of well-paid employees spending money locally.

3. Healthcare Anchors

Healthcare is the closest thing to a recession-proof industry. People get sick regardless of the economy. Hospitals don't lay off nurses when GDP drops.

Omaha has an outsized healthcare sector for its population. Nebraska Medicine and UNMC (University of Nebraska Medical Center) are world-class institutions that attract patients, researchers, and employees from across the region. CHI Health operates multiple hospitals across the metro. Boys Town is a nationally recognized research and treatment center.

The healthcare sector in Omaha employs tens of thousands of people at above-average wages. These are stable, well-paying jobs that generate consistent rental demand for workforce housing, which is exactly the product we buy and manage.

During COVID, Omaha's healthcare sector actually grew employment while other industries contracted. That's recession resistance in real-time.

4. University Towns and Education Infrastructure

University of Nebraska at Omaha, Creighton University, and UNMC collectively bring 30,000+ students and thousands of faculty and staff to the metro. Students need housing. Faculty need housing. The support economy around universities, restaurants, retail, services, needs workers who need housing.

University-driven demand is uniquely stable because enrollment is often countercyclical. When the economy weakens, more people go back to school. Graduate programs, professional certifications, career changes. Enrollment increases, housing demand increases, and your units stay full.

This doesn't mean you should buy the party house next to the frat row. Student-adjacent housing has its own management challenges. But the economic engine of a major university system adds a layer of demand stability that pure private-sector markets lack.

5. Affordability Relative to Income

A market's affordability ratio, the relationship between median home prices and median household income, tells you whether the market has room to absorb economic stress.

In Omaha, the median home price is approximately $275,000 and the median household income is approximately $70,000. That's a price-to-income ratio of roughly 3.9x.

Compare that to:

Austin: ~6.5x

Denver: ~6.0x

Boise: ~5.8x

Nashville: ~5.5x

Markets with high price-to-income ratios are the first to correct in a recession. When incomes drop or interest rates rise, buyers can't afford homes, sellers can't sell, prices fall, and renters who were planning to buy stay renters longer.

In affordable markets like Omaha, the correction is smaller because the gap between income and housing cost was never that wide. Prices might flatten. They rarely crash. And rental demand stays steady because renting is already affordable, which means tenants have less financial stress and lower turnover.

Why Coastal Markets Struggle in Downturns

I'm not anti-coastal. I'm anti-fragile. And many coastal markets are structurally fragile.

High price-to-income ratios mean any income disruption causes outsized pain. Employment concentration in tech (San Francisco, Seattle) or finance (New York) creates single-point-of-failure economies. High operating costs, including taxes, insurance, and regulation, compress margins that are already thin. Population outflow during downturns accelerates the decline.

In 2020-2022, we saw a mass migration from high-cost coastal markets to affordable interior markets. Omaha, Kansas City, Des Moines, Indianapolis. These cities gained population, gained employment, and saw rent growth while coastal markets saw flat or declining rents.

That pattern repeats in every recession. Capital flows to safety. And in real estate, safety means affordable markets with diversified employment and structural demand drivers.

How We Apply This Framework

When we evaluate a new market or a new asset within Omaha, we're looking at these five pillars in the immediate submarket.

A building near Offutt AFB scores high on military demand. A building near UNMC scores high on healthcare employment. A building in a submarket with diverse small employers across multiple industries scores high on employment diversity.

We aren't buying the best building in a fragile market. We're buying solid buildings in resilient markets. The building can be improved. The market can't.

The next recession isn't a question of "if." It's a question of "when." The investors who are positioned in recession-resistant markets won't just survive it. They will acquire assets at a discount from the investors who chose fragile markets and couldn't hold on.

That isn't pessimism. That's preparation.

For weekly market insights and real operator perspective, catch the Freedom Fighter Podcast on Spotify, Apple, or YouTube.

Tanner Sherman is the Principal and Managing Broker of Top Tier Investment Firm in Omaha, Nebraska. He co-hosts the Freedom Fighter Podcast with Ryan of Avara Investments.

What Makes a Good Real Estate Market in a Recession