I like to stay up-to-date on population trends because as a landowner, those can be a big factor in how much land is worth. With a degree in Economics, I’m always thinking of how the theories I learned in school, can be applied to the industry I work in.
As an investor, when I see a state surging in population, or if I project population growth in an area because of investment pouring into a region; creating jobs and boosting an economy. I view this as an opportunity to buy and HOLD land. Maybe, I have no interest in the land at all, but if I can find a reasonable price, my money has an opportunity to grow over the years due to the economic law of supply and demand. As people move into an area, the demand for land and housing increases, and the supply starts to dwindle. This causes land to become more valuable, therefore, increasing it’s price because the demand is greater than the amount available. Yes, there is always risk in an investment, but land is historically a lower risk investment, and lets face it, your money isn’t making more of itself by leaving it under the mattress.
Looking at it from a residents standpoint. As the population increases in an area, the demand for housing increases, and again, the amount of available housing becomes limited because developers can’t keep up with the population growth rate. This creates a market, where available housing is few and far between, so renters can rent at high prices and homes sell for more. Due to the limited options, people have to pay those prices if they want a roof over their head.
High rent prices aren’t your only option. We have a lot of customers who choose to buy affordable land outside the city to escape these dramatic prices. This route has many benefits: cheaper property taxes, more space, better views, and best of all, you get to design your dream home the way you want it! Yes, it does come with some drawbacks, probably the biggest one being the commute to and from work. However, even if life takes you a different direction, and you never end up building on the land, there is a good chance the land you purchased 10 years ago, will be worth a lot more than what you paid for it. Heck, just think about how much that land could be worth in 100 years if it stays in the family!
This concept applies to any area that sees their population grow faster than the housing market can keep up with it.
Here is a good article describing Colorado’s surge in population: http://www.denverpost.com/2016/05/19/colorado-population-growth-far-outstripped-new-housing-census-says/