Regardless of all the talk of a recession, soft landing, or something in between. Many…
According to one of the nation’s leading movers, the 2019 Atlas Van Lines Migration Patterns study found that 26 states registered as balanced—meaning that moves in and out of the states were roughly equal—13 as outbound, and 11 as inbound. Colorado became “inbound” for the first time since 2009. What does this change mean for real estate? What was in the data?
What was in the data?
Since 1993, Atlas Van lines (the moving company) has been tracking migration flows throughout the United States based on the number of people moving into a state versus the number of people moving out of a state. Atlas classifies the shipments into three categories:
- Inbound – More than 55% of total shipments moving into the state
- Outbound – More than 55% of total shipments moving out the state
- Balanced – Inbound and outbound individually represent 55% or less of total shipments.
Colorado has been roughly balanced since 2009 with slight increases in moves inbound vs outbound.
|Year||Inbound||Outbound||Total||Inbound % of total|
How accurate is the Atlas data?
With a limited data set of only movers that utilize Atlas van lines, I’m always skeptical of the accuracy of the data. Although the data is limited, it seems to be grasping the general trend in Colorado as the Kansas City Federal reserve comes to similar conclusions in their in depth 2018 study of migration patterns in the Rocky Mountain States. Here is what the Rocky Mountain report said about Colorado:
Colorado long has been an attractive destination for migrants with a positive net migration during the past 25 years. However, Colorado population growth during that time of migration has fluctuated. For example, net migration fell sharply following the 2001 recession as the state was hit hard by the sharp decline in the technology sector. More recently, the state has experienced consistently strong net migration. Between 2010 and 2017, Colorado added about 377,000 individuals through net migration and less than 258,000 via natural population growth. Thus, about 59 percent of Colorado’s population growth from 2010 to 2017 can be attributed to net migration.
No surprises in the data
Anyone who has lived in Colorado can easily surmise that the population is increasing if you have ever driven on I70 into the mountains or I25 on a daily basis. Net migration as the data shows is continuing into Colorado albeit at a slower pace.
What about real estate?
Simple economics tells us that if demand is higher than supply, prices increase. This has proven especially true in Colorado’s front range and building supply has not kept pace with the demand driven by net migration. In turn prices have increased rapidly.
Colorado’s front range remains a desirable destination for businesses and workers due to lower costs than coastal high-tech venues (NY, California, etc…) which will drive Colorado population growth. As Colorado’s prices continue to rise the advantage amongst the coasts will continue to shrink which will in turn slow the migration patterns down but I don’t see any huge changes that will derail net migrations into Colorado. As a result, look for Colorado’s real estate to continue to be in high demand due to migration patterns.
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Written by Glen Weinberg, COO/ VP Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
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