U.S. Population Migration Is Real, But It Might Not Be As Severe As Real Estate Fears

When the coronavirus devastated densely populated metros in 2020, CRE experts predicted mass migration from the affected coastal regions to the Sun Belt states, which will provide additional space and a lower cost of living.

Unsplash / Blake Wheeler

However, the reality has lagged behind the predictions of the CRE community. Most U.S. states saw population growth well below 1% from January 2020 to January 2021, according to a new report from retail traffic analysis company Placer.ai.

In fact, only two states saw notable increases in population – Montana and Idaho, which saw population increases of 3.7% and 3.9% year over year, respectively.

Negative migration patterns occurred in states such as New York, Massachusetts, and California, where migration rates were in the negative 1.1% to 1.8% range from January 2020 to January 2021, but most Americans left their homes during the pandemic left did not go to the suburbs to other states, Placer.ai reported.

The outcome of this data for office and retail is somewhat inconsistent, as primary tenants and their end users stay relatively close to each other but may want more flexibility to work and shop in different ways while in the same geographic area.

With its lower cost of living and less restrictive pandemic protocols, Texas expected to attract residents from New York and California in 2020, but the state’s population only grew at a mild pace of 0.2% from January 2020 to 2021, according to Placer.ai.

The data analytics firm said its research confirms some sort of geographic “stickiness” exists when individuals choose their homes, and even during the pandemic, migrant Americans stayed relatively close to their old hubs.

Residents who moved from pandemic San Francisco County confirmed that preference, with the county seeing a net change in migration of minus 6.3% over the year period studied, Placer.ai said.

When looking at the counties these San Francisco residents moved to, 16 of the top 20 counties on their list were in the same state of California.

This data contradicts the theory that certain regions will rise up due to mass exodus from other cities and states and instead show a future office or retail market in which residents feel indebted to specific regions and areas not far from theirs old tamping areas are removed.

“When nearly 70% of New York’s migratory population moves to a location that’s still a train ride from the city, it can have a huge impact on the decision to move an office or store,” concluded Placer.ai.