In 2020, the U.S. will embark on the country's 24th census. The 2020 census counts everyone living in the 50 states, the District of Columbia, and five U.S. territories. Ahead of that accounting, the U.S. Census Bureau has released its newest migration data, which tracks population shifts by both natural increase (when births outnumber deaths) and domestic migration (moving inside the United States from state to state).
The real estate market is always changing with population shifts following jobs and the economy. While we have 50 states, the population has always been clustered in a few areas. Increasingly this has been in the South and West. Consider this, over a quarter of the nation's population lived in just three states in 2019: California (39,512,223 people), Texas (28,995,881 people), and Florida (21,477,737 people). Expanding outward, half of the nation's population is located in just 10 states, and nine states now have a population of over 10 million. This is part of an overall trend in which much of the population is centered in large metropolitan areas.
The South's population expansion
One of the largest population stories in recent years has been growth in the Southern states. The South's population grew by over 1 million people from 2018 to 2019, a growth of 0.8%. Some of this growth was driven by natural increase, but a large portion was driven by people moving into the area. According to the Census Bureau, the South saw a net domestic migration of 407,913 people from 2018 to 2019.
Much of this growth took place in Texas and Florida, which saw their populations increase by 367,000 and 233,000 respectively. All of this movement appears to have boosted the Florida real estate market. As of November 2019, the Florida Association of Realtors reported that single-family home sales were up 6.1% statewide and home prices were up 3.9% to a median of $265,000. The Texas Association of Realtors reported in December 2019 that Texas homes that sold for $1 million or higher from November 2018 to October 2019 increased 4.4% and the total sales of million-dollar and higher homes were up 5.1% percent to 8.3%.
Arizona, Washington, Colorado, South Carolina, Tennessee, and Nevada all saw major population growth. Western states with smaller populations, including Idaho, Nevada, and Utah, also saw growth on a percentage basis. Idaho, which has been seeing a large increase in people moving in from California, had a population increase of 2.1%. It's no surprise to see Boise, Idaho, named as a city where prices are expected to rise by over 8% in 2020.
States seeing a decrease in population
A total of 10 states saw their population decrease over the past year.
Four states saw a natural decrease (more deaths than births), but two of them, Maine and New Hampshire, offset those losses with an increase in people moving into those states. Most of the states that saw a population decrease are in the East and Midwest.
|State||Population Decrease||Percentage Decline|
California experienced the largest amount of net domestic migration loss at -203,414. High real estate prices in California are part of what has fueled migration to nearby states. High taxes in New York are just one reason that the state saw a domestic migration loss of -180,649. New York's loss has been Florida's gain as residents have been drawn to economic opportunities and the allure of a no-income-tax state.
The bottom line for investors
At Millionacres, we often say that dollars follow people. It's clear that those dollars are headed to the South and West. Many Southern states still offer ample opportunities for investors. Smaller cities in the South and West may continue to expand as the cost of living in larger urban markets squeezes out many residents. This year's census will give an even clearer picture of where things are headed and how internal migration is changing the country.
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