Population shifts have always impacted the development and pricing of real estate. The latest 2006/7 Swanepoel TRENDS Report discusses this as one of the top 15 trends impacting the real estate industry and delves into the many resulting factors. As population shifts dramatically change the landscape of individual cities, states and even regions, Swanepoel recommends that agents should endeavor to identify those areas that may be affected the most and look for the niches that afford the greatest opportunity.
According to the US Department of Commerce, with the exception of California, the states with the highest net negative migration rate (more move out than move in) were those states with cold winters and/or manufacturing sectors in the “Rust Belt.” The Rust Belt is comprised of: the northern sections of Indiana and Ohio; the northeastern corner of Illinois; the Lower Peninsula of Michigan; the Lake Michigan shoreline of Wisconsin; western and central New York; at least the western half of Pennsylvania; and the northern part of West Virginia (especially that state’s Northern Panhandle). Two other prime factors causing many people to leave states like New York, Illinois, New Jersey, Pennsylvania, Michigan, Ohio and Washington DC are housing affordability and the overall the cost of living.
The already general strong desire to move to a warmer climate is now being accelerated by the Baby Boomers as they increasingly begin to select retirement or second career in the “Sun Belt.” It’s clear that the South and West have enjoyed the highest net plus migration numbers (more move in that move out). In the South Atlantic region, the top five states were Virginia, North Carolina, South Carolina, Georgia and Florida, with Florida having the highest net plus migration in the country. In the West, Arizona and Nevada gained the most, with the latter also having the second largest net plus migration in the country.
A trio of states lost migrants to other states, but enjoyed immigrants from abroad and therefore their numbers are skewed; California, New York and Illinois. Large metropolitan areas also generated high migration numbers. For example, during the last couple of years, the largest influx into the metropolitan areas came primarily from abroad, while overall these population centers lost a large portion of their base to non-metropolitan areas.
Another interesting population segment that requires attention is the Young, Single and College-Educated (YSCE) group between the ages of 25 and 39. Because they generally benefit from a wider range of job opportunities they are more mobile, as opposed to their Baby Boom parents. They are not only more willing to move, but actually have a desire to move in order to meet their economic or lifestyle goals. This segment exhibits a trait that is common to Generation X - distance and existing family location play a much smaller role in their thinking and they are more likely to move farther away from “home” than any other group.
The Report cautions that although migration has and will increasingly take place, whether it’s a net gain or net loss, the change over the next decade will in some markets completely redefine who the largest real estate companies and/or most successful agents will be. The key factors are not just climate and jobs, but the changing characteristics and composition of each respective consumer group within each given market. Understanding and serving the different generational, foreign-born and minority groups more effectively will become crucial to the future success for real estate brokers and agents. |
