Quickest Growing Cities in North America

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Sunday, October 26th, 2008 Subscribe To Our Feed

It’s a sad trend these days that some cities in America, even ones that were once considered strong economically and the most desirable to live in, are hemorrhaging their residents at a pace that is unbelievable to many. For example, the city of Detroit and its surrounding suburbs have a record number of vacant homes, either due to foreclosure or to new construction that lacks buyers. The same is true for many areas of California as jobs in and around Silicon Valley are being shipped overseas, forcing many residents to seek employment elsewhere.

But this doesn’t mean that people are actually leaving the country. If residents are making their way from these cities and others like them, where exactly are they going? What cities are showing the strongest growth in terms of new residents – and therefore, new revenue, new property values, new taxes for the area, and so on? If you’re a businessperson or investor, it pays to know just where the money is going so that you can follow.

Forbes magazine recently did some research on the fastest growing cities in America, and some on that list were surprising.

Las Vegas

Sin City has seen a 30% population increase since 2000. It seems that more and more people are appreciating its warm weather and beautiful surroundings. Interestingly enough, many celebrities have also found it to be worth noticing, as they’ve been regularly teaming up with local developers to build luxury condos, office complexes, restaurants, shops, and yes, even casinos. The job growth is healthy and the economy is steady, and the housing boom it’s seen in the past few years is only now beginning to taper off.

Atlanta

It may be surprising that a city like Atlanta has such a population increase, but many have seen the south grow for years. The automotive industry in particular has taken advantage of the low property prices and tax advantages and has been bringing production facilities – and new jobs – to that region for the past several years. And when an industry as strong as automotive sets up camp, other industries are sure to follow.

Atlanta actually has one of the highest percentages of growth, at 21%, with 5.1 million residents there currently.

Warm weather is the key.

It should be no surprise that Phoenix, Austin, and Orlando also experienced large population shifts. For one, these are very popular retirement destinations, and of course Americans are living longer than ever, meaning that there is a larger population of retirement age. If this trend continues, cities that are warm year-round and that are favorite hotspots for retirees will probably only continue to increase in population.

Sometimes they’re just moving to the suburbs.

The article in Forbes made an interesting point that not all residents who move from a large metro city are actually leaving it entirely. Sometimes they are just relocating to the nearby suburbs. For example, in the late 1960’s, Detroit saw a large part of its population leave also, but many of these residents were simply moving to the less-crowded suburban areas around the city.

Although this scenario doesn’t explain Detroit’s woes today, where the suburbs are seeing as much of an exit as the city itself, it does explain some other major city’s numbers, such as Dallas or Los Angeles. Much of their population shift has just been the natural result of the city becoming somewhat overcrowded, and residents moving to where they can find available housing while still working and staying nearby.

The economic impact of population.

It seems that as the population of a city goes, so goes its economic state. A growing city has more revenue from taxes, including sales, personal income, and property, among others. This increase in taxes means more maintenance of its infrastructure, such as roads and utilities, which in turn can attract more residents. Additionally, a strongly populated city can offer a major industry or company a strong workforce. When there’s no shortage of workers, companies are able to keep wages at a moderate rate, which helps to improve their own bottom line.

The support that a strong population can offer to retail is also to be noted. People with steady jobs and good income like to buy things for themselves and their families, so this means that retail centers and shopping malls can also be supported – which in turn brings in even more revenue for the city by way of property taxes, rent, sales tax, and so on.

Which means that a population exodus has the opposite effect. The article in Forbes quoted an October study titled “Where Have All the Dollars Gone? An Analysis of New Jersey Migration Patterns,” by James Hughes and Joseph Seneca, researchers at Rutgers University, in New Brunswick, N.J. In this study, they say that the area’s out-migration patterns resulted in the loss of $7.9 billion in net-adjusted income since 2000 in New Jersey alone. The ripple effect on state tax revenues and the reduction in consumer spending hurts the macro economy. And, they estimate, the area lost out on 39,000 jobs as a result.

The real estate market.

The impact that a population has on the real estate market is somewhat obvious to many. Cities that are experiencing a tremendous exodus of their residents now have an absolute glut of unsold homes, which of course forces the prices of homes down – excessive inventory leads to a buyer’s market, of course.

It was noted in the article that some growth in some cities over the past few years was because of the housing boom, including new construction. Now that the real estate market in the country has gone bust, many of these jobs have dried up. Developers and builders have had to migrate themselves to a growing region to find work. So not only is the population growth affecting the real estate market, the real estate market has affected the population as well!

Anyone interested in real estate, especially for investment or development purposes, will do well to sit up and take notice of population shifts and patterns; as we’ve mentioned, the two factors go hand in hand. In order to protect your investment and your bottom line, you need to do your homework to be sure that you’re building and developing in an area that it going to be supported by a strong population base.

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