Real Estate News & Commentary

Why People Move and What The Data Means for Real Estate Investors

Expertise: Business Management, Landlording & Rental Properties, Real Estate News & Commentary, Real Estate Marketing, Personal Development, Real Estate Investing Basics
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The US Census put together a fascinating report a few weeks ago about the reasons why people move. The Census called thousands of people around the country who reported a change of address and interviewed them about their move, and compiled the results.

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Here are the results of the most relevant question to us:

The chart of top reasons for moving in 2012-2013.

What These Results Mean

Certainly, some of the results are obvious — when about 1 in 8 people moving is doing so strictly to “upgrade,” for example, you can be assured that having a property good enough to upgrade into is a solid business move.

Major Life Changes

But less obvious are the between-the-lines factors. For example, “Establish own household,” “New job,” “Change in marital status,” “Lost job,” “Retired,” and “To attend/leave college” are all different versions of “Experiencing a fairly dramatic life change” — and together they make up for a huge 27.9% of all people moving. If you can discern what makes a property good for “major life changes,” you can benefit.

One example: social connections. People with a new spouse, a new job (or new lack of job), or new(ly completed) stay at college are all generally looking for new friends — their old crowd isn't as relevant as it used to be, and people generally don't like to remain alone for long. If you can offer or prospect some form of connection, be it a community clubhouse on the grounds, a membership to a local gym or other socially active scene — or anything else to make it easy to make new friends — you can count that as a potentially strong selling point.

Movin’ On Up

Similarly: “Wanted better home/apartment,” “Wanted better neighborhood/less crime,” and even (albeit to a lesser degree) “Change of climate” all reflect a similar basic desire — between them, 18.1% of all people who are moving are specifically looking to upgrade. Selling based on quality rather than price has a strong pull for these people.

Related: Is There a Best Time of Year to Transact in Real Estate? (This Data Might Surprise You…)

Compare to 12.2% (the total of "Wanted cheaper housing," "Lost job," and "Foreclosure/evicted") who are hunting based largely on price, and you can make a pretty clear indication that in today's market, being the upgrade people want to move into is a strong place to be.

Location, Location, Location

If 16.5% of all people moving are doing so because of a new job/job transfer, to reduce their commute, or because they’re looking for/have just lost a job, you can guess that accessibility is a strong selling point in today’s market. Being able to advertise that you’re minutes away from a major thoroughfare is a strong play, especially if the building is in an otherwise suburban or rural area.

Trend Tracking

If you look over the past few years’ data, you can see a few distinct trends.

  • The number of people across the various “upgrade'”categories mentioned above is decreasing, which most likely means that people are getting comfortable with the situation they’re in.
  • But the number of people who are seeking independence (“Wanted to establish own household,” “Wanted to own, not rent”) is increasing — probably because, as the economy recovers, they feel able to pursue that goal.
  • Finally, pay attention to the small number under the category “retired.” It’s not a lot of the market — but notice that it’s more than doubled in the last three years, from 0.3% to 0.7%. That’s the beginning of a large trend, as the Baby Boomers are hitting retirement age every day, and the number that are choosing to retire per day is predicted to go up and up until 2025. That’s at least a decade of safe-to-predict growth in the “moving because retiring” category — so while it’s not a huge market force today, it’s worth putting in your long-term view and taking into account over the next few years.

Related: How to Find a Tenant in Any Market: A Comprehensive Guide

These numbers and the trends behind them represent one of the high-level strategies that a prepared property investor or manager should be putting effort into. Keep an eye out for similar data in years coming because this is a snapshot of the “big picture” of your market that you can turn into actionable understanding with just a little bit of extra effort.

What trends inform your investing decisions? How do you interpret the above data, and what have you seen in your local market?

Leave a comment below, and let’s talk!

While in the mortgage business, Drew rose to a VP position at the first broker he worked for and then started his own company. In the pursuit of excellence, he obtained several mortgage designation...
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    David Weiss Investor from Dallas-Ft.Worth, Texas
    Replied over 5 years ago
    I cannot believe there aren’t more comments. Not only is this article very insightful for strategic long term REI planning, it’s marketing gold. For example, the fact that 18.1% of people are looking to upgrade means that rehabbers should consider attention-grabbing marketing titles like, “Upgrade Your Lifestyle With This Gorgeous Remodel”. Another: since 27.9% of people are moving due to major life changes and need an easy way to connect to new people, if you’re selling/renting in a neighborhood with a strong culture of community, market that fact! People decide to buy (or rent) based on emotion and then justify their decision based on logic. The first piece of marketing prospective buyers/renters should come into contact with should speak directly to their emotions. The content in this article equips us to do just that. Thanks for sharing, Drew!
    Drew Sygit Property Manager from Birmingham, MI
    Replied over 5 years ago
    DAVID: thanks for the positives! Maybe the title of this article wasn’t “sexy” enough to get more attention?
    George Smith Investor from Latham, New York
    Replied over 5 years ago
    Thanks Drew. This is always the unsexiest(and least talked about) but one of the most important topics in investing. Fortunately, RE is typically a slow moving business. You just have to have the focus to see it coming.
    Drew Sygit Property Manager from Birmingham, MI
    Replied over 5 years ago
    GEORGE: glad you liked it and thanks for commenting:)