Exploring the Correlation: US Population Growth and Rising Home Prices

Sfrazier

July 17, 2024

Hello readers, as your faithful author and real estate expert, I want to deliver an insightful analysis on a recent study conducted by Zoocasa, focusing on the relationship between population changes and home prices across various cities in the United States.

Despite high borrowing costs, we’re currently seeing a continued rise in home prices, which the National Association of Realtors® confirms with a 5.7% year-over-year median price rise for existing single-family homes. Notably, major shifts in population certainly contribute to these trends. So, let’s dive a bit deeper and explore how population growth is influencing real estate and, specifically, the virtual brokerage concept known as eXp Realty.

Zoocasa’s study analyzes areas with populations exceeding 100,000 people, charting how changes in population have impacted median single-family home prices from July 2022 to May 2024. In total, 109 cities were evaluated with a focus on those experiencing population changes greater than 0.5%.

Here’s an interesting takeaway: 67.9% of these cities saw median single-family home price increases from July 2022 to May 2024. Among the cities witnessing population growth, 50 saw home price appreciation. But it’s not one-size-fits-all. For instance, while there was a modest 0.6% population increase in Providence, RI, its median single-family home price shot up by an eye-watering 40.8%.

This ascendant trend didn’t just apply to the smaller locales. Even in larger metros, like those in Southern California, we’ve seen similar patterns. The cities of Irvine and Anaheim for example, both with populations over 300,000, showcased the growing demand in secondary and tertiary cities.

Now, let’s delve a bit deeper into several states with substantial population increases. Florida, Idaho, and Arizona are leading the pack, with cities in these states claiming seven out of ten spots for the greatest population spikes. The assumption might be that these population booms led to consistent home price increases, but in some instances, that wasn’t the case. Arizona and Idaho saw population growth, yet some of their cities experienced a decline in median single-family home prices between 2022 and 2024. This indicates other factors might be in play, such as balancing housing supply and demand.

Through the lens of eXp Realty and other virtual brokerage models, it’s clear that these population and price trends can change real estate strategies. Virtual brokerage may become not just a convenience, but a necessity – bringing together buyers and sellers in an online environment to navigate the rapidly shifting real estate landscape.

Lastly, it’s important to note that population growth alone doesn’t necessarily equate to home price increases. As Zoocasa’s CEO, Carrie Lysenko, states, “Population growth alone does not guarantee home price increases, but in cities with a persistent lack of housing supply, it can significantly drive prices up.” In other words, one has to consider an array of factors from economic indicators to job opportunities, as these are the vital elements that attract residents and boost demand for housing.

In short, while we are experiencing a dynamic shift in the landscape of the real estate industry due to current population trends, virtual brokerages like eXp Realty and others are evolving accordingly. This is the future of real estate and it’s undoubtedly an interesting one. As a real estate aficionado, remain vigilant, learn, and adapt to these trends for successful navigation in your real estate ventures.

Original Article: https://lifeexpdev.wpengine.com/analysis-population-growth-affected-home-prices/

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