Location is critical when it comes to picking a place to set up shop--it can make a world of difference if your startup can recruit new hires locally and sail through minimal red tape and city regulations.

That's why the annual Emerging Trends in Real Estate Report, compiled by Pricewaterhouse Coopers and the Urban Land Institute, offers an interesting take on the best startup hubs around the country.

For the report, PwC surveyed and interviewed around 2,000 real estate professionals and market watchers to highlight the U.S. and Canadian markets that will be the most favorable in 2017 for real estate, as well as the best markets for different real estate property types, such as real estate and office space.

"While some would argue that real estate is an interest rate-dependent asset class, it's really a job creation-dependent asset class," says Mitch Roschelle, a PwC partner. "One job creates multiple uses for real estate--if somebody has a job, they need to go to that job. Then once they start making money, they need a place to start shopping, they need a place to live, and so on."

That means that many (though not all) of the trends that are good for real estate are also trends that signal strong overall economic growth--and that can be good news for growing companies. Three of the top five cities on PwC's list--Austin, Dallas and Seattle--were also some of the metropolitan areas that experienced the largest positive rates of growth in nonfarm payroll jobs from August 2015 to August 2016, according to the U.S. Bureau of Labor Statistics.

Certain markets might not be ideal for a real estate developer, but they may offer different advantages for entrepreneurs. In a big coastal hub like New York City and San Francisco, you can't gobble up cheap property that will yield a big return in a few years, but you may be able to network with more leaders in your industry, or put yourself closer to key investors.

The top five best U.S. markets for real estate development and investment in 2017 are listed below, as well as some insights from PwC about why these markets may be appealing for both real estate investors and business owners alike.

1. Austin

Roschelle says that Austin continues to rank favorably among real estate developers and investors due to the large number of millennials moving to the city and its low cost of living. In the Austin metro area, the average market value for homes with a homestead exemption runs about $387,537. The University of Texas also offers Austin a solid talent pipeline.

2. Dallas

Both Dallas and Austin were ranked by PwC survey respondents as among the top five overall best markets for real estate for the second year in a row, highlighting the attractiveness and of doing business in Texas, says Roschelle. There's no income tax in the Lone Star State, and it's consistently ranked as one of the friendliest cities for small business by online services marketplace site Thumbtack.

3. Portland, Oregon

There's no shortage of interest in buying real estate in Portland, thanks to lots of new residents who need a place to live. The population of Portland's metropolitan region grew by 40,621 residents from 2014 to 2015, according to the U.S. Census Bureau. While new residents are driving up housing prices, it's still a relatively cheap place to live and do business for now--as of February, the median home price in Portland was $345,000 compared to $11.2 million in San Francisco.

4. Seattle

Like its Pacific Northwestern cousin, a high percentage of Seattle's population is made up of a large percentage of millennials. But Seattle also has a slightly more mature tech industry, thanks to nearby Amazon and Microsoft, which means that there are more tech workers with lots of disposable income. According to PwC, the average hourly pay for an IT worker in Seattle is now $10 higher than the national average. One PwC survey respondent remarked that Portland and Seattle, "look like more affordable versions of San Francisco/San Jose to us."

5. Los Angeles

As the largest in the top five, Los Angeles may be plagued by costly rent and traffic jams, but its population has one of the largest percentages of millennials at 15.2 percent--and to some developers, the city looks like a steal compared to San Francisco. Additionally, among the top five cities, Los Angeles is attracting the most venture capital money--in the second quarter of 2016, companies in the L.A./Orange County area received $2.1 billion.