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Wednesday, 16 September 2015 05:00

Housing Demand Goes Up In & Near Central Business Districts

Trends in population growth are key indicators.

 

population growth trends for investingWhen it comes to population and job growth – we have seen suburban growth surpassing the large cities. This trend that continued for more than half a century is now changing. The suburban growth is stalling to say the least.

We are hearing for many years now that the 'Millennial Generation' favors city centers and other areas close to their place of employment as ideal places to live in. Now it usual scenario that jobs are again shifting back into city centers from the suburban environments.

 

For all the real estate investors in U.S, this trend could bring great opportunities for a desired return on investment in housing located near to the urban core in cities around the country.

According to research by the think tank City Observatory, the nation’s largest metropolitan areas are experiencing faster job growth downtown as compared to areas located away from the city center. City Observatory analyzed at what happened between 2007 to 2011 and compared urban cores to their surrounded areas.

In city centers, jobs experienced a growth of 0.5 percent annual rate, but in the surrounding metropolitan areas jobs experienced a fall of 0.1 percent per year. City centers surpassed the surrounding areas for job growth in 21 of the 41 metropolitan areas analyzed.

As recently as 2002-2007, surrounding areas near large cities were growing at a faster rate (1.2 percent annually) and the job growth was idle in urban cores (0.1 percent). The popularity of city centers appears to be the result of growing attractiveness of urban living, combined with the relatively greater performance of urban region centric industries (business and professional services) relative to decentralized industries (manufacturing, construction).

Many businesses have declared that they are moving to or extending operations in city centers, in efforts to take benefit of the increasing number of younger workers residing in urban neighborhoods or near major city centers.

 

THE EFFECT ON HOUSING – City Center Rebound

When it comes to local housing market, city centers often play an exclusive role. They often have a greater density of housing, and the proximity to employment and services is valued by some wealthy households and households without vehicles. Generally the housing located right in the city core include high-rise condominiums and apartment buildings, which can be costly.

More affordable single-family housing can often be found near-by. In some cities, older, low-value housing in or close to the center is a cost-effective choice for low- and moderate-income households. Rental Home Financing believes that these affordable homes very near to the city center could help single-family rental investors obtain targets.

This relatively less distance to employment and other services can offer opportunities for lower and moderate-income families to enjoy the convenience of residing close to the city centers. These rental property investments, also have a good potential for rental growth and higher occupancy levels as the demand for urban housing increases in many metropolitan areas across the nation.

For more information about how Rental Home Financing can help you obtain rental property financing to grow your real estate portfolio, feel free to get in touch with our mortgage lender today. Call 888-375-7977 to get more information.

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