As part of the COVID-19 world, we live in a redefined residential & commercial landscape where big city dwellers from epicenters have fled elsewhere.
As people continue to migrate out of certain cities and into other areas, it is important to understand not only which cities are changing in population size but also the composition of the change. However, traditional datasets are slow to show changes in residential areas (e.g. IRS data, census data, etc.) Moreover, as we discussed in our previous blog post, a lot of metrics being used to capture migration patterns are proxies at best.
Real estate professionals need to understand if their investments are following market trends (going into the right places) and how to underwrite their existing investments.
A key part of the process is identifying what are the new & upcoming areas. Furthermore, it is best to define these areas based on reliable data such as the amount of people moving there and their demographic profiles. Using data that captures actual moves from one area to another allows for more accurate forecasting/probabilistic models about the economy’s area’s behavior.
However, they are currently unable to do this in a timely manner because traditional datasets lag by quarters - years; some traditional datasets are also not granular enough (IRS data (once a year, ends at 2018), USPS data (once a year); this matters because static data is not accurate enough and there are risks associated with not acting quickly enough or being first to market.
Lastly, even if the data is used, it requires time to collect and aggregate disparate datasets in order to make actionable insights.
Real estate professionals face these challenges everyday and in this uncertain climate, these problems are even more pronounced than before.
How We Can Help You
For a geographic area, our Emerging Areas / Hot Markets dataset examines the inflow and outflow of people and their income and classifies the area’s growth and change in composition. By doing this, real estate professionals and others can understand which areas are hot or not. For example:
- Real Estate investment managers can be first to market, get lower prices, and maximize the return on investment.
- Leasing managers can understand where the population will outstrip demand for services and prioritize placement of essential venue types (groceries, pharmacies, public services such as schools and infrastructures etc.). Leasing managers can also prioritize placement of high-end (luxury gyms, high-end shopping) vs. low-end venues (dollar stores, discount goods/services)
- Construction / Mortgage Lenders lenders can further reduce risk of default on loans, prioritize loan issuances in areas with increasing population, and adjust mortgage rates accordingly.
- Development companies can commence construction projects on plots of land that they’re currently holding or find land to develop on.
- Insurance / underwriting companies for loans can use this data in their actuarial tables , reduce consumer premium and attain better loss ratios for their carriers.
- Residential Real Estate professionals can gain better insight into M&A of local brokerages in the market, including current franchisees, in order to hire up or down based on market patterns.
We identify the features / characteristics of an “emerging area” and then rank the areas that are over-indexed for those characteristics.
- Migration Patterns
- Our Migration Patterns dataset observes the inflow and outflow of given area
- Income of movers based on census demographics
- Our income demographics are derived from where we identify people’s origin home locations and the census data tied with that area
Whether you are a decision-maker looking for undervalued markets or seeking understanding of changing markets, our data can help you:
- Being first to market / Speed to market
- Lower rates
- More properties / options available
- Greater upside for when the area appreciates
- Better / higher margins
- Win more deals
For the analysts, our dataset exceeds others by providing you with:
- More recent data that is updated frequently
- A direct measurement of people’s movements (vs. using proxies)
- Less time spent on combining disparate datasets to assess area / market value
See It In Action
Please look for more about Emerging Areas soon and feel free to Contact Us or and ask how Emerging Areas can help your organization leverage the power of location data insights to understand how human migration affects your business. And don't forget to check out our recent webinar in which we provide a virtual demo of Emerging Areas.