Top growing cities/metro areas in last 4 years

10 Replies

Was looking at some data on cities growth by population and have a set of top 12 cities/metro area. Would love to hear from the community as to which area they would pick for rental property investment.

And instead of population growth if you just look at the percentage change in population you get a different set of cities but some cities are common and probably of interest to me.


Looks like  Boise City, ID,  Daphne-Fairhope-Foley, AL,  Midland TX, Provo-Orem, UT seems good on both metrics #datadriveninsights.  Would love to hear from real estate investors in those areas as to what they think about that market and any pros/cons.

Next steps I am going to dig more into employment, wages, rental vacancy and other things for the same market. Let me know which of the topic is of most interest. I will analyze that first.

Originally posted by @Shrikar A. :

Was looking at some data on cities growth by population and have a set of top 12 cities/metro area. Would love to hear from the community as to which area they would pick for rental property investment.

And instead of population growth if you just look at the percentage change in population you get a different set of cities but some cities are common and probably of interest to me.

Looks like  Boise City, ID,  Daphne-Fairhope-Foley, AL,  Midland TX, Provo-Orem, UT seems good on both metrics #datadriveninsights.  Would love to hear from real estate investors in those areas as to what they think about that market and any pros/cons.

Next steps I am going to dig more into employment, wages, rental vacancy and other things for the same market. Let me know which of the topic is of most interest. I will analyze that first.

 Hmmm, I don't see the two fastest growing cities, Phoenix AZ and Las Vegas NV. Are you certain this is current information?

Account Closed this is from the latest census data. Here are the top 30 Metro areas as you mentioned Phoenix and Las Vegas are there but not in the top 12. Can you tell me when you say growth what metric are you using? I am using the percentage change in population.  Here are the list of top 30 for reference. 

 
IDNAMEpct_2018_change
228Midland, TX4.318857
242Myrtle Beach-Conway-North Myrtle Beach, SC-NC3.777628
332St. George, UT3.521666
192Lakeland-Winter Haven, FL3.233892
255Odessa, TX3.150032
344The Villages, FL3.058439
140Greeley, CO2.958326
41Boise City, ID2.865311
32Bend-Redmond, OR2.777733
280Provo-Orem, UT2.592792
74Coeur d'Alene, ID2.552624
89Daphne-Fairhope-Foley, AL2.541165
21Austin-Round Rock, TX2.509703
84Crestview-Fort Walton Beach-Destin, FL2.458091
260Orlando-Kissimmee-Sanford, FL2.389454
71Clarksville, TN-KY2.300738
197Las Vegas-Henderson-Paradise, NV2.213932
258Olympia-Tumwater, WA2.187028
325Spartanburg, SC2.145273
162Idaho Falls, ID2.134548
319Sherman-Denison, TX2.116390
284Raleigh, NC2.113251
54Cape Coral-Fort Myers, FL2.042445
251North Port-Sarasota-Bradenton, FL2.041138
270Phoenix-Mesa-Scottsdale, AZ2.021717
316Sebastian-Vero Beach, FL2.008243
118Fayetteville-Springdale-Rogers, AR-MO1.990297
207Logan, UT-ID1.986208
169Jacksonville, FL1.984263
323Sioux Falls, SD1.969899

I admit, it's in the main stream media so it's probably not accurate, but here is what they say:

(The real question is where is it best to invest - IMHO Phoenix and Las Vegas are safest based on growth and price per property)

https://www.azcentral.com/stor...

Buckeye, Phoenix are fastest growing cities in the United States

"Two Arizona cities are the fastest growing in the United States, according to population estimates released by the U.S. Census Bureau Thursday.

Buckeye's population saw the largest percentage growth of any city in the country, growing its size by 8.5% between July 1, 2017 and July 1, 2018. It now has a population of 74,370.

Phoenix saw the largest numeric increase during that time frame, adding 25,288 people for a total population of 1,660,272.

This is the third year in a row that more people moved to Phoenix than any other city in the country."

Account Closed I think I might have found where the disconnect is.  The names I gave are for some major cities/Metro areas and looks like cities with a small population are not included. (Example: Buckeye).

Let me get another view of the data solely looking at city level metrics. Thanks for your help.

@Shrikar A. I’d stay away from Midland and Odessa, TX unless you really know the area and are really able to keep a pulse on the economy. That market lives and dies on Oil & Gas and that industry is pretty uncertain at the moment. My day job serves the O&G industry and the Permian region (includes Midland and Odessa) are important areas for us. Only experience I have in real estate in that area is we have a corporate apartment there and have to watch the swings in rent rates.

Definitely not saying there’s not money to be made but I would expect it to be a roller coaster ride.

Account Closed It looks like the article mixes its stats (likely to fit the narrative).  Buckeye is fastest growing "percentage wise", which is often the case of small areas.  Phoenix, which is HUGE, they rely on total numbers not percentage growth.  All depends on what you are looking for really

@Shrikar A. It is a good start on analysis.  The point above may be helpful - are you looking for rapid growth (% wise) or just more households coming into the market?  I'd say you likely care about new potential renters regardless of how many existed last year.

With that said, you are researching the demand side of the equation.  Don't forget the supply side - one of the reasons that Boise is such a hot market right now is that there is a flood of new people coming to town and the supply hasn't been able to keep up resulting in rent growth (and property value growth).

As a side note, you should also be cautious when comparing wages and other income-based metrics.  Keep in mind the cost of living in these places.  Boise wages are much lower than those on the coast but then again, so is the cost of living.

There is a significant amount of capital that is flowing OUT of the Permian Basin right now.  Average hotel room rates have fallen to about $250 per night.  That's down from the high in the early Spring of 2019 of around $800 per night for some place like a Hilton Garden Inn.

I've also seen the rent market soften since last Spring as well.  Oil prices are lower as the economy is trying to decide on a correction or recession in response to a long bull and the trade war escalation.

Now would not be a time to buy in the Permian Basin unless you get a screaming good deal.  The rents may fall under your mortgage and operating expenses since the housing purchase prices are still high and have not softened like rents...yet.

There could be some very good opportunities to buy in say 6-9 months if things really do turn bad.  If layoffs start and people begin to stream out of the Permian, then look for some great opportunities to scoop properties up at a discount.

I think the US and even beyond will have an "Oh crap" moment in the next 12-24 months on oil.  The ability to ramp up production to meet demand will not keep pace after "cheap" oil for the last 3 years or so.   The Permian will roar again and those who got properties will make serious bank.

@Matt Brookshier thanks for bringing that point up. I am also planning to look at the supply side but couldn't find a good source to find the information. And to accommodate the cost of living based on the different city I am planning to look at the percentage contribution of the total income(Example: 40% rent, 20% food, 10% transportation etc) which should account for the cost of living

@Shrikar A. sorry for the late reply.  If you want to get supply numbers you will have to reach out directly to the planning departments in each target city.  I know the City of Boise publishes a report on the permits issued.  If memory serves, it breaks down multifamily, single family and commercial.  Actual permits = finished units within the next year (approx).  Bigger cities likely create a regular report while smaller areas will require them to run numbers for you.

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