When you hear the word prosperous, what other terms come to mind? Profitability, growth and long-term sustainability may be on the list – especially if you’re associating the term with real estate.
Using U.S. Census data, Rent Café determined which regions are truly the most prosperous locations. To create a solid baseline, the study included all U.S. cities with a population of 100K or more in 2016. Researchers and analysts identified proportional changes that took place from 2000 to 2016 in several categories: population, median household income, median value of owner occupied housing, share of population with a Bachelor’s Degree or higher, share of population below poverty line, and share of unemployed population.
To compensate for fluctuations, analysts also considered increases in population, income, home values and in the share of population holding at least a Bachelor’s Degree, and decreases in the share of poverty and share of unemployed population as indicators of prosperity.
The results are interesting – especially, when one compares the East and West Coasts. Here are the top ten rankings (for a more in-depth overview, you can review the interactive map):
|RANK||CITY & STATE|
|5||North Charleston, SC|
|6||Jersey City, NJ|
Why is Odessa, Texas #1?
During the period of analysis, U.S. crude oil production saw a 50% upswing. This growth is phenomenal, considering the production figures over the past decade and a half. For the U.S. oil industry, it only took seven years to recover and reach new record growth. Texas is responsible for more than one-third of the nation’s crude oil output – which is likely the reason why the Midland-Odessa area has become a huge employee hub in the Permian Basin and also, why, Texas is experiencing some of the lowest unemployment rates in their recent history. New records reported Texas’ unemployment rate at a record low of 3.9 percent.
Nonetheless, Odessa, TX has experienced a 30% income increase over a 16-year period.
How did Washington, DC land the runner up spot?
The area has definitely created significant improvements in terms of incomes and a more highly educated workforce; however, the price increases are truly what forged the national capital to the top five list of most prosperous cities.
Sarah Mills is a social media expert and founder of Eurus Media. Mills oversees professional social media pages for the DC and Northern Virginia area – her insight provides an interesting viewpoint. Mills said she’s not surprised that DC ranks within the top five. “I can see the lifestyle being a huge draw for people moving to Washington, DC. It’s not quite as fast paced or uppity as other large cities, but still offers constant activity and opportunity.” Mills added, “The surrounding suburbs are close enough to participate in the city life, while also taking advantage of top rated school districts, wine country, and the small town feel that mum and pop shops provide.”
After digging further into the research, we saw when you narrow down the focus to ‘large cities with populations over 300K’ then Washington, DC ranks number one and Baltimore, MD comes in at number eight. Ultimately, this is a result from the 135% increase in home prices over a 16-year period – which is the highest increase on the list. The next highest increase is Odessa, TX at 91%.
Education is another big factor that was taken into consideration when ranking and determining the most prosperous large cities. The recent forges, within higher education from employers and other native organizations, aided in DC’s number one ranking – with 42% over a 16-year period. Second place, within this category, is Atlanta, GA at 39%.
Tanya Johnson, Realtor and President of Tanya & Co, advised, “A lot of people think everyone in the D.C. area works for the government. However, there is a large tech industry presence, which could potentially get larger if Amazon builds headquarters here.” Johnson is a realtor within the Northern Virginia region, she was recognized for her efforts and won the Loudoun Times Mirror’s Best of Loudon. Johnson added that her estimation is about 40% of home buyers, in the DC region, are brand new to the area. “People are moving to the Washington, DC area because there are so many good job opportunities here. That coupled with relatively mild climate, yet still having four seasons and being close to water and the mountains is a win. Northern Virginia and Montgomery County also have top ranked schools.”
In terms of real estate, DC remains strong. While the albeit growth is smaller in 2017 versus 2016, the prices continue to increase. Limited inventory and escalating prices will propose investors with new issues of finding deals. “Buyers want to know which areas have the best value,” said Johnson. “Primarily, sellers want to know what homes are selling for, what home updates have the best ROI, and when is the best time to sell.”
What should we expect next?
As the economy continues to create more jobs and regional opportunities for citizens, we will continue to see other cities become even more prosperous – thus continuing to stimulate the real estate market and economy. Developers and investors will always seek ways to create development and other business opportunities to drive profits. The key, in this competitive market within large cities, will be the cities themselves developing and cultivating opportunities for big businesses and corporations to continue, and perhaps grow production within the area. Overall, these jobs will continue to attract higher educated residents and drum up a demand for housing and community development.