MARKET BREAKDOWN
POPULATION TRENDS
CONTEXTUALIZING POPULATION GROWTH One of the most useful types of real estate list is one based on population trends. For example, 24/7 Wall St. recently released a list of information on housing markets that are “fastest growing” or “fastest-shrinking” in the country. This list made its way all over the national media, including into USA Today . It’s very likely you saw this list in that publication or on another financial news venue. The first step in using a real estate list is to determine how its terms are defined. In the case of the growing/shrinking list, the analysts defined population this way: “Population change is the product of two factors: net migration and natural growth.” Having established this simple definition, the analysts simply reviewed population changes between 2010 and 2017 in 382 U.S. metro areas to identify which cities had posted the largest losses and expansions during that time period. Be- cause population trends are important to real estate investors, What the list told us: • Population grew 32.8 percent (+30,886) between 2010 and 2017 • 38,549 new residents came to the area over the same period of time • Median household income is $54,562 Notable for investors: • More people came to the area during 2010 and 2017 than the overall population change reflects on its own. That is serious growth and likely indicates new household formation. • The median household income in the area is slightly lower than the national average, but not much. Now, let’s do a little digging: Here is a little more information on The Villages that is important for contextual and strategic purposes:
this study has a lot of good things going for it: IT'S CURRENT Not only does it span seven years, but it also factors in population changes through 2017.
INCLUDES MEDIAN HOUSEHOLD INCOME Real estate investors benefit from this context.
DISTINGUISHES BETWEEN MIGRATION AND NATURAL GROWTH Most investors will find migration more relevant to their investing strategies.
DIGGING INTO THE DETAILS Once you have established a real estate list contains useful informa- tion and have defined the context for that information, it is time to dig in. Sticking with the same growing/shrinking list as an example, let’s take a look at two extremely polar markets first using information just from the original source (the 24/7Wall St. list) and then using some additional sources of expert insight and information.
ACloser Look at the Fastest- Growing and Fastest-Shrinking Markets in the U.S. THE ART OF EFFECTIVELY LEVERAGING SUPERLATIVE LISTS INTO YOUR INVESTMENT STRATEGY.
FASTEST-GROWING MARKET HIGHLIGHT & RESEARCH PATHWAY: The Villages, Florida, is #1 on the List of Fastest-Growing Cities in the Country
by Carole VanSickle Ellis
ore than 12 years ago, “blogosphere” experts began training their clients in the art of list-building. No, it wasn’t email-list building, although that was certainly a component. They were focused on the art of building a com- pelling list of, well, just about anything that would generate an attention-grabbing headline that web users and email recipients would click. Then came the housing crash, and the real estate “listicle” surged in popularity as all types of media consumers learned more about the national housing market than they had ever anticipated. M
They combine a lingering sense of fear about the housing market (am I informed enough to spot the next crash?) with the near-universal attraction of looking at other people’s houses, housing markets, and real estate investments. In nearly every instance, what these lists do not do, however, is remotely factor in what real estate investors really need to know about any given market. So, should we relegate housing-based lists to entertain- ment-based reading only? Absolutely not! These lists are often published by companies with massive resources for accessing and evaluating data. As Eddie Wilson, CEO of Think Realty parent company Affinity Worldwide, is fond of saying, “Leverage other people’s intense, expensive real estate studies whenever possible. Just be sure you are putting that data in the right context.”
The Villages, Florida, area described by the Census is largely (albeit not entirely) a retirement community made up of a group of community development districts (CDDs). It is about 45 miles northwest of Orlando, Flor- ida, and has been named twice on the Forbes “25 Best > Continued on next page
WHY DOWE LOVE REAL ESTATE LISTS? Real estate lists are perfect for all types of media outlets.
56 | think realty magazine :: july 2018
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