In part 1 we looked at fastest growing zipcodes in the United States. In part 2, we’ll be looking at the relationship between population growth and home price appreciation.
There are 3 reasons why population growth is an excellent forward-looking indicator of future appreciation:
Reason #1: Population growth is extremely accurate, even looking 5-7 years out. Population science is well-understood and we have developed immensely complex models to forecast population changes.
Reason #2: In the long term, population growth usually (but not always) benefits real estate investors through increased economic growth, increasing rents and increasing housing demand.
Reason #3: We can accurately and easily compare home prices with population growth. The top 10 metro areas in the US for population growth are all in the top 50 metro areas for home appreciation over the last 10 years.
So to sum up, population growth is highly accurate, updated regularly and is correlated strongly with favorable economic conditions for real estate investors.
Here is a list of the top Metro areas by population growth and their corresponding home price appreciation, corrected for regional differences:
| Pop. Growth Rank | City Name | Appreciation Rank |
|---|---|---|
| 1 | Seattle, WA | 1 |
| 2 | Fort Worth, TX | 18 |
| 3 | Austin, TX | 57 |
| 4 | Denver, CO | 25 |
| 5 | Charlotte, NC | 41 |
| 6 | Tampa, FL | 48 |
| 7 | Mesa, AZ | 31 |
| 8 | Atlanta, GA | 30 |
| 9 | Aurora, CO | 26 |
| 10 | Phoenix, AZ | 40 |
As you can see, the only one technically not in the top 50 is Austin, and this may be due to other factors like property taxes that affect values in Austin specifically.
When you drill down further to the zipcode, county and block level, you can see the same trends.
This is why VestMap provides the most accurate, most granular and most up-to-date population forecasts of any product on the market today.
Stay tuned for Part 3!