Migration Trends

On today’s show we’re taking a look at what’s happening in population migration.

Over the past 20 years population growth among secondary and tertiary markets has outpaced that of the country’s large primary metros.

A new report from Marcus and Millichap shines a spotlight on a trend that has been accelerated by the events of this year.

Over the past two decades total population growth was 70 percent higher in secondary and tertiary metros than in gateway cities. Since 2014 that ratio has climbed to over 200 percent.

In my opinion, the number one driver that has enabled growth in secondary and tertiary markets has been the installation of fiber infrastructure for communications. When you have a fiber connection to your home or office, you have communication speeds that are among the best in the world regardless of your location. Speed of electronic connection is on par with the importance of physical presence.

The fact is, you will always need to meet with people who are more than driving distance away. There will always be people who are more than flying distance away. Even before the pandemic, I was routinely spending hours each day in video conference meetings. The pandemic has merely accelerated a trend that was already underway.

In my opinion, the Marcus Millichap report is over-simplifying the trend. They mention that New York and Chicago have lost about 600,000 population in the past 5 years. But high taxation and difficulty of doing business have played a major role in that trend. The beneficiaries have been cities in lower tax environments. These include the primary markets like DFW, Atlanta and Houston, and the secondary markets like Austin, Nashville, Charlotte.