The US is great for data, with CBRE amazingly (at least in my opinion) being able to analyse US Postal Service data to determine migration movements both at a local level, ie change of county, and a national level with respect to changes in city and state.
Perhaps unsurprisingly, at the national level, the net migration out of city centers increased 15% in 2020 compared with 2019. As working from home increased, employees sought the allure of the better value and size of accommodation offered in suburban locations, but perhaps also the access provided to the countryside and open space outside of the city environment.
Meanwhile, the national migration patterns accelerated, with even greater net movement of people out of the expensive coastal cities of Los Angeles, New York, Seattle and most notably, San Francisco. The Golden City’s net migration rate more than doubled in 2020 compared with 2019. But where is everyone going?
The simple answer is south. Unless you are in California when it is probably east. The so-called Sun Belt region, starting with but at the same time excluding in this analysis California in the west, through Texas in the center, on to North Carolina to the north and Florida to the south, is continuing to witness strong population growth.
The outperformers on this basis are Charlotte, Dallas and Phoenix, with the number one spot reserved for Austin, Texas. Already leading for inward migration, it has extended its lead further. After the cold of a New York or Seattle winter, the temperate climate of Austin outside of the summer months must make a pleasant change.
Echoing this is data from the US Bureau of Labor Statistics, which looked at what percentage of jobs lost during the COVID-19 pandemic had since been recovered. Chicago, New York and Los Angeles by July this year had only recovered 50%, but guess what, San Francisco was lower still. Not much reason to hang around in an expensive city if the jobs are not coming back.
At the top of the table, Austin, Dallas and Phoenix, identified within the CBRE research as bull markets for migration, are showing 85–100% recovery of jobs previously lost.
But a new name tops the bill, with Salt Lake City pushing on to 110% recovery, ie a net gain since before the pandemic. Accessible by plane from San Francisco in 100 minutes, maybe that is where the former Californians have gone?
Here at 90 North, we have been tracking this relative outperformance of what we class as the ‘Growth’ cities for a number of years now, with the economic and rental growth of these cities such as Austin, Charlotte and Salt Lake City beating those of our classification of the ‘Great’ and ‘Gateway’ cities.
It is these ‘Gateway’ cities which have largely bounced back the least based on the research as outlined previously.
Digging through the Islamic Finance news archive, Investcorp must be happy with its multifamily acquisition in Salt Lake City three years ago, along with Arch Street Capital with its Phoenix office acquisition the same year.
And while Riyad REIT can claim its Texan star for its Dallas office acquisition in 2019, I cannot find any recent Islamic acquisitions in Austin, which is topping the table for inward migration at the moment.
Perhaps it is the city’s “Keep Austin Weird” slogan that is putting Islamic investors off, for it is certainly not slowing the economy down.
This article was first published in IFN Volume 18 Issue 37 dated the 15th September 2021.