Why would a truck rental company provide a list of the top real estate markets to invest in? Penske, the truck rental company, revealed the top 10 moving destinations in the country. They have been compiling the list since 2010 to track one-way rentals to cities throughout the United States. One city has retained the top spot for the last 9 years; which one? How can you use this survey to guide your real estate investing decisions? Why do statistics from a truck rental company matter?
Who made the list:
The top 10 cities on the list for one way destination moves in are: The number in italics is last years ranking
- Atlanta (1)
- Phoenix (2)
- Tampa (5)
- Orlando (6)
- Denver (8)
- Houston (4)
- Las Vegas (7)
- Charlotte (9)
- Austin (new)
- Portland (10)
Why is this list important?
Penske’s survey tracks net migration to major cities. Although not a scientific study by any means due to the sample size, it does provide valuable insight into long term trends. Cities like Denver and Atlanta continue to increase net migration due to strong job markets. These trends are backed up by various census data surveys which show the both Denver and Atlanta growing much faster than the rest of the country.
Strong migration into a city signals a robust real estate market as newcomers to the city need housing, places to eat out, etc… The increase in migration drives demand for residential and commercial real estate. In many cities, like Denver, the supply of houses has not kept up with the demand from newcomers leading to large gains in prices. As the migration continues prices will continue to increase. Having offices in both Colorado and Georgia, I can attest to the huge growth both Denver and Atlanta have undergone.
Will the net migration to these top 10 cities decline?
During the last recession from 2007 to 2008 residents moved the least since 1962 (NY Times). This will likely occur again in the next recession with migration slowing to a crawl. In the last recession many people were unable to move as housing prices waned, homeowners were essentially “trapped” as they were underwater on their home. As the economy improved and real estate prices recovered, the movement among cities also picked up pace. These trends will likely reverse; as the economy sputters migration will slow as we saw in the last recession.
Although migration to these top 10 locations is likely to slow as the economy slows, these markets should perform better than others during the next recession. Jobs will remain in these cities as it is much more difficult for companies to relocate than a household. Even though less people will be moving in general, each of these markets will remain attractive due to robust job markets.
What does the Penske survey have to do with real estate?
We saw in the last recession that areas like Denver and Atlanta came back quicker than other parts of the country due to their desirability and strong job attractiveness. This will likely occur in the next cycle as well. Areas that are attractive for relocation should be at the top of your list if you are looking to make a real estate investment.
The Penske survey provide valuable insight on the top markets for real estate investing as relocation is a sign of a robust local economy. Even as the next economic cycle takes hold, the top relocation areas will maintain their value better than others. If you are investing, following the Penske trucks is a wise strategy.
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Written by Glen Weinberg, COO/ VP Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in the Colorado Real Estate Journal, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
Fairview is a hard money lender specializing in private money loans / non-bank real estate loans in Georgia, Colorado, Illinois, and Florida. They are recognized in the industry as the leader in hard money lending with no upfront fees or any other games. Learn more about Hard Money Lending through our free Hard Money Guide. To get started on a loan all they need is their simple one page application (no upfront fees or other games).