BYTHE NUMBERS
LOCAL MARKET MONITOR
On theVerge AN INCREASE IN POPULATION GROWTH IN THE PAST YEAR WILL BE FELT IN GREATER DEMAND—AND INVESTOR PROFIT—IN THE NEXT YEAR.
by Ingo Winzer
I
nvestors do best when they buy properties in markets where demand
of job growth is 2.6 percent—1.4 percent higher than last year. What’s the big deal about the increase? Job growth translates into higher demand for housing with a lead of about a year. So the increase in growth in the past year will be felt in greater demand in the next year. With the exception of New York and Salt Lake City, and despite moderate increases in home prices in the past year, these markets are still underpriced. This means there has been very little home construction in recent years. And that in turn means it will take a long time for new construction to catch up with the higher demand that economic
growth is bringing. Don’t look for boom results in these markets, but expect above-average returns for many years. •
isn’t great yet—but will be. The inability of home builders to an- ticipate future demand always results in shortages—and higher prices and rents—in markets where the population grows faster than expected. These aren’t necessarily the hot markets. Usually, it’s quite the contrary. Our Top 10 list shows markets with very decent economic characteristics (so you can’t really go wrong) where the current rate of job formation is not only pretty good but up significantly from last year. In Charlotte, for example, the current rate
IngoWinzer is president of Local Market Monitor, which analyzes conditions in 300 U.S. markets, using such economic data as home values and growth in employment and population. Winzer, who has analyzed
real estate markets for more than 20 years, was a founder and executive vice president of First Research, an industry research company that was acquired by Dun & Bradstreet in March 2007. He is a graduate of MIT and holds an MBA in finance from Boston Univer- sity. Winzer resides in Cambridge, Mass.
www.localmarketmonitor.com
3 YR POPULATION GROWTH (%)
JOB GROWTH IMPROVEMENT (1 YR %)
LATEST HOME PRICE INCREASE (%)
2014 POPULATION
AVG. HOME PRICE (000)
LATEST JOB GROWTH (%)
UNDER PRICED (%)
LOCAL MARKET MONITOR
2,380,314
$221
5
2.6
1.4
6
-10
Charlotte-Gastonia-Concord, NC-SC
2,328,652
$201
6
2.8
1.1
7
-11
San Antonio, TX
5,614,323
$200
4
3.1
0.8
8
-19
Atlanta-Sandy Springs-Marietta, GA
703,825
$156
0
2
0.5
5
-39
Akron, OH
1,269,702
$178
2
2.6
0.5
5
-17
Louisville, KY-IN
14,327,098
$398
2
2.3
0.5
4
-1
New York-Jersey City, NY
862,463
$195
3
2.6
0.5
6
-17
Greenville, SC
1,971,274
$178
3
2
0.4
5
-26
Indianapolis, IN
1,153,340
$258
4
2.7
0.4
6
1
Salt Lake City, UT
1,994,536
$197
4
2.3
0.4
6
-26
Columbus, OH
Source :: Local Market Monitor
126 | think realty magazine july :: august 2016
Made with FlippingBook Online document