Some Migration and Childbearing Trends for Real Estate Investors to Consider

Long-term real estate investors may want to note a few reports that may shed some light on where the housing market may be headed – and where it really hasn’t been.

One of these comes from the US Census Bureau, which says its latest data shows that only 27.1 million people – about 8.4% of all of us – changed their address in the past year. This is the lowest rate of movement recorded since at least 1948 and, in some ways, the centuries since the first US census in 1790.

Then there’s one from the Pew Research Center that says a growing proportion of American adults are choosing to remain childless for a variety of reasons, ranging from climate change to simply wanting to have children.

Image source: Getty Images.

The “Great Migration” happened, but maybe not as “big” as assumed

The census data seems to contradict popular belief that the coronavirus pandemic sparked a “great migration” in which people have fled the latest plague in tried and tested ways: by heading for the mountains or, in this case, suburbs, and suburbs beyond, in search of separation and space.

In fact, there was some of it. There is no doubt that some areas suitable for working from home in attractive settings have seen some of the sharpest price increases in an already record breaking housing market.

This is backed up by research by Stephan Whitaker, the Cleveland Fed political economist who closely followed U.S. migration patterns during the pandemic. He reported a few weeks ago that in the second quarter of 21 net outflows from urban neighborhoods continued to be more than 54,000 migrants per month, double what it was before the pandemic.

Whitaker said he also found that movement to urban neighborhoods had actually increased. Here’s the crux of his report: “The flow of middle-aged people moving to the suburbs to buy houses is offsetting a surge in the return of young tenants to the neighborhoods.”

“Balancing” is a key word here. As the census report notes, the number of people moving overall has been falling for decades – a steadily aging population is a key factor here.

Now add the results from the Pew Research Center on the breeding choice. The organization said a recent survey found that 44% of non-parents ages 18 to 49 say that they are not likely, or not at all, likely to one day have children. That is 7 percentage points more than in 2018. In addition, 74% of parents under 50 said they are unlikely to have more children, although that number has remained unchanged since the 2018 survey.

Guessing strategies based on demographic data start and end with individual decisions

There is much more to be found in all of these reports, and how to use this information in your own real estate investment strategies starts and ends with you. Here is a signpost to watch out for: Who is moving to the urban centers? Young professionals. Who is having fewer and fewer children? Young professionals.

So in that case, as their populations retire and then age, which would affect residential and commercial real estate alike, these markets could soon peak and then make a long decline.

Of course, that sums up millions of individual decisions into one big generalization, but these are trends – the sum of all these individual decisions. That said, when you make a move in your own area, it can help you better focus your tactics on the big picture.