The United States: Demographic Trends
Population trends--who lives where--are the ultimate determinant of real estate values. A critical source of information about demographic trends are the periodic reports by The Brookings Metropolitan Policy Program. The most recent report calls upon the government to develop policies and programs reflecting the latest population trends, especially those shaping metropolitan areas that are the engines of economic growth and opportunity. An overview of these trends is given below.
Slowing Migration
Migration across states and metro areas slowed considerably in the past two
years due to the housing crisis and the recession. About 4.7 million people
moved across state lines in 2007 to 2008, a drop from the historic high of
8.4 million people at the turn of the decade. Population growth has dropped
in key Sunbelt cities such as Las Vegas, NV; Riverside, CA; and in Florida,
which actually experienced a net loss from 2007 to 2008. Reflecting this,
out-migration has slowed in older regions such as Chicago and New York, as
well as many Midwestern and Northwestern cities, which in some cases saw
population gains.
Immigration Shifts
At the same time, the sources and destinations of U.S. immigrants continues
their long-run shifts. About 80 percent of the U.S. foreign born population
in 2007 came from Latin America and Asia, up from 20 percent in 1970. The
Southeast has become the fastest growing destination for foreign-born, with
such metro areas as Raleigh, NC; Nashville, TN; Atlanta, GA; and Orlando,
FL, ranking among those with the highest recent growth rates. Increasingly,
the new immigrants are moving away from communities in the urban core, with
more than half of the nation’s foreign born residents now living in major
metro suburbs, while only one-third live in large cities.
Minorities Grow
Racial and ethnic minorities are driving the nation’s population growth and
resulting in increasing diversity among younger residents. Hispanics account
for about half of the nation’s population growth since 2000. Currently,
racial and ethnic minorities represent 44 percent of U.S. residents under
the age of 15. They are a majority of that age group in 31 of the nation’s
100 largest metro areas (and a majority of the entire population in 15 metro
areas). Hispanic populations are rising in a number of Sunbelt and high-tech
centers and African-Americans continue their move toward large Southern
metro areas like Atlanta, Houston and Washington, DC.
Massive Senior Growth
The next decade promises massive growth of the senior population,
especially in suburbs unaccustomed to housing the elderly. The first wave of
baby boomers reaches 55 in less than two years and the senior population
then will grow by 36 percent from 2010 to 2020. The most increase will be in
the Intermountain West, the Southeast and Texas. Because the boomers are the
nation’s first fully suburban generation, their aging in place will cause
many major metro suburbs--such as those in New York and Los Angeles--to
“gray” faster than their urban counterparts.
Rising Poverty
Even before the current recession began, poverty rose since 2000 and spread
rapidly to suburban locations. Currently, working-age Americans account for
a larger share of the poor than in the past 30 years. The suburban poor
surpassed the central city poor in number during this decade and now
outnumber them by more than 1.5 million. The suburban poor have spread well
beyond the older inner-ring suburbs that in recent years housed less than 40
percent of all poor suburban dwellers. The report concludes by saying that
the continued dynamism of our metro areas raises key policy and program
issues for the government.
Real Estate Focus is provided by Somerset’s Real Estate Team for our clients and other interested persons upon request. Since technical information is presented in generalized fashion, no final conclusion on these topics should be made without further review. For additional information on the issues discussed, please contact Michael Fritton, CPA. Whether you are a building owner, building manager, real estate developer, real estate professional or an investor, we hope to provide you with timely information so you may be proactive in making your business decisions.
This article was written by and published herein with the permission from professionals of BDO Seidman, LLP. Somerset is a member of the BDO Seidman Alliance, a nationwide association of independently owned accounting and consulting firms.
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