Abstract
Demographics and population growth are among the most important factors affecting real estate markets. Differences in population growth between U.S. metros are driven largely by domestic migration patterns. What explains migration patterns, and can this help anticipate future conditions in commercial real estate markets? We examine the structure of local job markets and find that metros with higher concentrations of certain professions like management, business and finance, have persistently higher in-migration, while metros with greater focus on production, transport (and “material moving”) saw lower in-migration or net outmigration. Jobs in computer, science, and engineering were the largest driver for international migration. These migration patterns have a statistically significant impact on apartment and office markets, including higher rent growth, larger price increases, stronger demand growth and new construction. Among metros like Seattle and Austin, high levels of construction may be warranted by future in-migration in response to the composition of professions in the local job market.
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