As a real estate investor, it is important to stay informed on where the best opportunities for investment lie. Recently, six of the fastest-growing states in the U.S. have emerged as new economic powerhouses. This population and business shift can make or break investing strategies for real estate investors, and understanding the nuances of the market is key to success. This blog post will explore the economic powerhouses of the fastest-growing states and discuss what opportunities they can offer investors.
Understanding the Economic Shift to the South
Currently, six southern states are leading this shift: Florida, Texas, Georgia, the Carolinas, and Tennessee. Several states in the country are attracting businesses and residents from all over, leading to the relocation of families and businesses and the transfer of their wealth. An estimated $100 billion has been transplanted to the Southeast, while the Northeast saw $60 billion flow out. According to Forbes, Texas now hosts more Fortune 500 companies than any other state and the migration of companies continues. Nine of the nation’s 15 fastest-growing cities are in the South, according to estimates released by the U.S. Census Bureau (of the nine fastest-growing cities in the South, six were in Texas). As businesses are drawn by better labor markets and business-friendly communities, so also are families relocating for lower costs of living and increased opportunity.
Population growth and economic growth are key components to examining a market’s potential, so investors need to take notice. With or without concerns of recession these states continue to grow as desirable locations for companies and families alike, opening many opportunities for investors to fill a need for housing and commercial space.
The Top Growing States
If you’re looking to invest in real estate in the United States, some southern states are promising. Florida, Texas, Georgia, the Carolinas, and Tennessee now lead the nation’s GDP growth, which has caused a shift in economic power from the Northeast to the South. In 2005, the Northeast’s share of national GDP was 23.5%, while the six-state South’s was 21.8%. However, 2022 saw a shift: The South held 23.8% growth while the Northeast’s was only 22.4%.
Why is this happening? For one, the cost of living is generally lower in the South, which means more people are moving to the area, creating a greater demand for housing, jobs, and services. This creates an environment ripe for building wealth, as the growing population requires more resources to meet their needs.
Of course, it’s not just the states themselves that are growing, but specific cities within those states. Miami, Dallas, Atlanta, Charlotte, and Nashville are all experiencing rapid population growth and economic expansion, making them prime locations for investment.
So, if you’re looking to capitalize on the economic shift to the south, keep an eye on these top-growing states and their major cities. With a little research and due diligence, you can position yourself for success and start building your wealth.
Cities to Watch
As investors seek to build wealth in the fast-growing southern states, it’s worth paying attention to the cities that are experiencing the most growth. Georgetown, Texas had the highest population increase in 2022, with a growth rate of 14.4%. Santa Cruz, California wasn’t far behind, with a 12.5% increase that added roughly 7,000 people to the city.
The next three fastest-growing cities were all in Texas: Kyle, Leander, and Little Elm. In fact, Texas was the only state with more than three cities on both the 15 fastest-growing large cities and towns by numeric change and by percent change lists.
Fort Worth, Texas had the largest numeric population gain in 2022, with an increase of 19,170 people. Other top cities by numeric growth included Phoenix, Arizona (19,053), San Antonio, Texas (18,889), Seattle, Washington (17,749), and Charlotte, North Carolina (15,217). It’s worth noting that Charlotte returned to the list of the top 15 largest cities in 2022, ranking 15th after dropping to 16th in 2021.
Investors looking to capitalize on the economic shift to the South should keep an eye on these growing cities. As populations and economies continue to boom, these areas may have significant opportunities for building wealth.
Industries Driving Growth
The economic shift to the South is driven by several industries that are booming in the region. One of the biggest catalysts for growth is the influx of tech giants and multinational companies that are relocating to the South. Companies like Apple, Tesla, and Hewlett Packard Enterprise are setting up shop in states like Texas, South Carolina, and North Carolina, attracted by the region’s low cost of living, favorable tax policies, and talented workforce.
According to the U.S. Census Bureau, the relocation of companies to the South is helping Texas, South Carolina, and North Carolina become three of the fastest-growing states in the U.S. Samsung, for example, is moving part of its operations to Texas, creating more than 2,000 jobs in the Austin area. Real estate developers are attracted to Austin due to the high demand for housing as people relocate to the area for job opportunities.As the old saying goes, “Where the jobs go, so does the people.” This sentiment is echoed in a recent survey, where 51% of participants cited a new job or job transfer as the reason for families’ out-of-state move. With industries like tech, healthcare, and energy booming in the South, it’s no surprise that more and more people are flocking to the region for job opportunities and a better quality of life.