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Real Estate Migration Patterns Across the U.S

Plus, Rent growth to slow further in 2024 as more inventory arrives and 6 more RE insights

Real Estate Trends

The Three Trends To Watch in 2024 link

  • Despite challenges like high interest rates and low inventory, the real estate market in 2023 showed resilience. Home prices rose significantly, with a more than $42,000 increase from January to October 2023, despite a 14.6% drop in unit sales from the previous year.

  • The affordability crisis deepened in 2023, with rising home prices outpacing incomes. The median household income dropped by 2.3% from 2021 to 2022, making it harder for many to afford homes. The income needed to afford a median-priced home surged over 50% since the pandemic's start.

  • The inventory shortage in the housing market is expected to continue in 2024, keeping upward pressure on prices. Factors like homeowners holding onto low-interest rate mortgages and a lack of new construction due to labor shortages contribute to this ongoing issue.

Inventory Boost Expected to Slow Rent Growth to 1.5% link

  • The rental market in 2024 is seeing a significant increase in apartment inventory, with an estimated 1 million new buildings under construction. This surge, particularly strong in Sun Belt cities like Dallas and Austin, is set to cool rental growth to between 1.2% and 1.5%.

  • Despite the slowdown in rent growth, many renters remain financially strained. In 2023, renters by necessity (working professionals in low to mid-priced units) spent 32% of their income on rent, reflecting lease prices from the high-cost years of 2021 and 2022.

  • The multifamily property market is experiencing a downturn, with apartment sales dropping 68% month-over-month in November and sales prices falling by 12%. This decline is attributed to higher interest rates and investor caution, with some predicting rent reductions of up to 10% in oversupplied cities over the next year.

Net Real Estate Migration Patterns Across the U.S link

  • Interstate moving hit a record high in 2022, with 8.2 million Americans relocating across state lines. In contrast, same-state relocations have significantly decreased, dropping from 37.8 million in 2013 to 31 million in 2022.

  • Southern and Southwestern states, particularly Florida, Texas, and North Carolina, are leading in net migration. The South is the only region with a net population gain from interstate moving in 2022, boasting nearly 690,000 new residents.

  • Millennials and Gen Z show distinct migration preferences. Texas, Georgia, and Florida are top choices for Millennials, while Connecticut, North Carolina, and Washington, D.C., attract the most Gen Zers. Half of the top 10 busiest state-to-state routes originate in California.

Here is Where Industrial is Growing the Fastest link

  • Industrial development has seen a significant decline in 2023, with starts falling nearly half to 66.2 million square feet in Q3 from 100.6 million in Q1. Despite this nationwide slowdown, Dallas and Phoenix emerge as leaders in new industrial projects.

  • Phoenix tops the chart in industrial starts, contributing to over 17% of the national total alongside Dallas. This highlights the resilience and growth potential of these markets even amid broader industry challenges.

  • Southern California experiences a unique trend with double-digit rent growth. Inland Empire, Los Angeles, and Ocean County are witnessing this surge, indicating a robust demand in these regions despite the overall normalization in the industrial sector.


Average Senior Housing Cap Rate Inches Up link

  • The average senior housing capitalization rate saw a significant increase of 74 basis points between April and October. This rise was most pronounced in non-core Class C Memory Care assets, which jumped by 89 basis points to 10.5%.

  • The data comes from the 13th edition of CBRE’s Senior Housing & Care Investor Survey, conducted in October 2023. The survey, with a 98% response rate, reflects the insights of senior housing real estate professionals and investors.

  • This trend indicates a shifting landscape in the senior housing market. The increase in cap rates, especially in specific asset classes like Class C Memory Care, suggests evolving investor perspectives and market dynamics in this sector.

Location Specific

Phoenix is the Biggest Mover in Apartment Permitting link

  • Multifamily permitting is on a downward trend, as highlighted in a recent RealPage report. New York, despite leading in permits, saw a significant drop of nearly 15,700 units in the year ending November.

  • Phoenix emerges as a key player in the apartment permitting landscape. This shift indicates changing dynamics in urban development and real estate investment.

Pro Member Only Content

This City is Drawing People From Florida, Virginia and New York 

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  • Raleigh-Cary CBSA in North Carolina is attracting young families from the East Coast. The area offers a blend of favorable housing, a thriving job market, and quality public schools.

  • Despite a slightly higher cost of living, the region's benefits outweigh the expenses. People are willing to pay more for better job opportunities and educational facilities.

  • Data from PlacerAI highlights this trend in East Coast migration. Raleigh-Cary CBSA stands out as a top choice for first-time home buyers, especially among those relocating from Florida, Virginia, and New York.

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The Nation’s Fastest Growing Job Markets 

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  • The U.S. job market has seen significant shifts post-COVID-19, with a notable recovery in 2021-2023. As of November, the U.S. employment is up by 4.7 million compared to February 2020, despite the loss of about 160,000 Leisure and Hospitality Services jobs.

  • Southern regions, especially Texas and Florida, have experienced remarkable job growth, driven by population influx and lower living costs. Dallas/Fort Worth leads with over 590,000 new jobs, while Austin's job base grew by an impressive 22.3%, largely in Professional and Business Services.

  • Other notable job growth areas include Atlanta, Phoenix, and Riverside, each adding over 170,000 jobs in five years. Philadelphia leads the Northeast with a 5.6% increase in employment, contrasting with New York's modest 1.7% growth over the same period.

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