Housing Markets Changing with Economic Sectors

Real estate investing is not just a local endeavor. Many investors branch out into other markets, sometimes far from their base of operations. Current trends should be carefully watched, as they can give you a whole new perspective on the best markets for investors. The financial and legal economic services sectors are giving way to growth in the energy and technology sectors. This is changing the areas into which people are moving for employment.
Cities like New York, Washington D.C. and San Francisco will continue to draw new residents, but the changes in sectors experiencing job growth are creating movement into cities like Houston and Austin, Texas and San Jose, California. A recent U-Haul survey turned up changes in the top cities for destinations of renters of their vehicles. The top ten recently are:
1. Houston, TX
2. Orlando, FL
3. Chicago, IL
4. Las Vegas, NV
5. San Antonio, TX
6. Austin, TX
7. Brooklyn, NY
8. Philadelphia, PA
9. Kansas City, MO
10. Sacramento, CA
Houston ranks number one in job growth among the 12 largest cities in the U.S. in June. The transportation and utilities industries are the primary contributors to job growth in the Houston area. Education and health sectors followed closely behind. Job growth is spurred by new industry and businesses seeking better tax treatment and the lower costs of living brings people as well.
Houston in particular has benefited from recent trends. It’s an urban environment with all of the cultural and economic benefits of a large city, but the cost of living is relatively low compared to other cities that have dominated jobs growth in the past. Quality jobs combined with a low cost of living are major motivators for young professionals seeking employment.
Multi-family construction projects are booming in the Houston area, and apartment construction is now at pre-recession peaks. New office space construction has been slower to ramp up, but it’s on track now to reach levels not seen since the real estate crash. Investors desiring to increase their holdings outside their local area should carefully watch these trends for opportunities.