Where Are People Moving? 2022 Edition

20 years ago, when I was researching industries and career options I focused on one main variable: demographics. I read research from multiple sources that showed that you could predict the future strength of an industry by the demographic trends. What’s an example of this? I chose to enter the medical device industry because of the aging of the Baby Boomers. An aging population that was the most active and affluent in modern history meant that there would be a higher demand for orthopedic surgery, including joint replacements and spinal surgery. It’s just the way things work.

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Demographics is also the lifeblood of commercial real estate, along with job and income growth. These make up some of the statistics that we use when we analyze which markets we are interested in targeting for investing. We like to see figures for all three of these above the national averages and the stronger the better. If we are analyzing smaller cities, like Fort Myers, FL for instance, these numbers should be higher than larger cities.

I talk more extensively about how demographic trends affect the multifamily real estate market in Chapter 7 of my book, “Next-Level Income”. If you want to predict the future trends in real estate, you need to know where people are moving and why. So let’s explore where people moved in 2021 and how you can use this information to make better choices for your investments going forward.

Annual 2021 United Van Lines National Movers Study

One of my favorite studies each year is the United Van Lines National Movers Study. It comes out in January of each year and it highlights what many of us already see and hear; where are the most popular destinations for those moving?

The Top Inbound States Of 2021 Were:
  1. Vermont

  2. South Dakota

  3. South Carolina

  4. West Virginia

  5. Florida

  6. Alabama

  7. Tennessee

  8. Oregon

  9. Idaho

  10. Rhode Island

Of the top ten inbound states, six — Vermont, South Dakota, West Virginia, Alabama, Oregon and Idaho — are among the 20 least densely populated states in America, with less than 100 people per square mile. And, Tennessee and South Carolina are among the top 25.

Why is this important? The overall numbers for these low-density states may not be that meaningful. It’s why we like to target larger cities with populations above 1 million and smaller, fast-growing cities with populations above 250,000 people. In addition, the states need to be business friendly and cities need to have enough employers in different industries to maintain a robust economic environment.

The Top Outbound States For 2021 Were:
  1. New Jersey

  2. Illinois

  3. New York

  4. Connecticut

  5. California

  6. Michigan

  7. Massachusetts

  8. Louisiana

  9. Ohio

  10. Nebraska

There aren’t a lot of surprises on this list! People are moving from high-cost, high-tax states in the Northeast and choosing the Southeast (yellow represents outbound states and blue represents inbound). One thing to note is that some states have cities with very high inbound populations (like Katy, TX that led the country in population growth and Wilmington, NC at 80% inbound), even if a state isn’t represented. This is a country-level view:

Why are people moving? Let’s take a look by age group:

www.unitedvanlines.com/moving-tips/blog/more-moved-to-be-closer-to-family-in-2021

JOBS! Jobs are the #1 reason, with family and lifestyle following behind. Now you can see why we look at job and economic growth metrics we target when analyzing areas to invest.

What About Retirees?

We’ve discussed overall trends and the importance of jobs to a state and city’s growth. I began by discussing how I followed the trends of the Baby Boomers early in my career. What are they up to now? They are entering retirement in unprecedented numbers. Where are they moving?

Top Inbound Retirement States:
  1. Florida (39%)

  2. South Carolina (37%)

  3. Arizona (36%)

  4. Delaware (34%)

  5. Idaho (29%)

  6. Nevada (29%)

  7. Wyoming (28%)

  8. Mississippi (28%)

  9. New Mexico (27%)

  10. Maine (27%)

Yep, Florida continues to be a top retirement destination, as well as the Carolinas, Arizona and other areas of the Sunbelt. It’s important to consider where this large and growing group will live. What’s also notable is that the Northeast is experiencing and unprecedented exodus of those over 55 years of age. Clearly the same trends away from high-cost, high-tax and a lower standard of living is present in this demographic as well.

How Can You Use This Information?

Whether you are just starting out in your career and looking for an area of the country that will grow and support your business or you are trying to find the best places to retire, or you are trying to identify the best areas to invest, this information can help you to make better decisions. Last year I wrote about Geographic Arbitrage and how we studied trends to decide to live in Asheville, North Carolina. Now you are equipped with some of the same tools that I used to help our family find our dream town to live and still use today to identify which real estate markets will be best for investment.

If you haven’t yet, get a copy of my book to learn more about our strategy.

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