Migration Trends and Real Estate Investing
Real estate is a classic case of supply and demand. When there is more demand than supply, there is upward price pressure. When there is more supply than demand, there is downward price pressure.
- Job demographics - is it an area of growing job growth or declining job growth? Does the area depend heavily on jobs that could be moved to cheaper locations within the world or is it a strong and growing base of jobs.
- Population demographics - is the long term population trend growing -both from internal factors and migration factors.
- Age demographics - Knowing if the area is getting "older" or "younger" can define the types of housing that will be popular in the area in the future.
- Crime statistics, etc. - In other words, it is a nice place to live and does it seem that it will stay a nice place to live for a long time. You could have a city where everything looks good - growing population, good job growth, etc. - but if you invest in a part of the city that is in a downward spiral, these demographics will probably not help you.
Paying attention to these trends will help you better understand the cycles of the real estate market in your area. They let you forcast with a reasonable degree of certainty what is going to happen in an area over the next several years.
