Real Estate In Shrinking Markets
Welcome to the Real Estate Espresso Podcast, your morning shot at what’s new in the world of real estate investing. I’m your host, Victor Menasce. On today’s show, we’re thinking about what changing demographics mean for real estate investors in the coming decades.
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However, the actual subject of today’s show is the effect of changing demographics on real estate investors. Demographic shifts have already occurred in numerous places around the world. In some cities, we see decaying infrastructure due to a combination of declining fertility and outward migration, such as in Detroit, which has lost more than half its population since the 1950s. Today, Detroit’s population is a mere six hundred thirty thousand people, a significant decrease from its peak of 1.85 million in 1950.
While it may be tempting to dismiss Detroit as just a decaying city, I believe we should learn more from the city’s history and current situation. By examining Detroit, we can understand the impact of a shrinking market on real estate.
Countries like Japan, Korea, Greece, Portugal, Italy, China, and several former Soviet bloc countries are experiencing a shrinking population. Yet, there are still construction projects taking place. Even in Japan, which has been losing the population for a few decades now and has over 11 million vacant homes, saw 800,000 new units completed in 2022.
In conclusion, changing demographics and migration patterns will make the real estate game more nuanced. While some areas would be growing, others will be shrinking. As a real estate investor, you will need to pay closer attention to migration patterns within a market. You can’t just rely on a rising tide to lift all boats. At the end of the day, it’s all about making informed decisions and taking strategic actions.
Now, take some time to explore our storage projects at YStreetCapital.com. Have an awesome rest of your day, and go make some great things happen. We’ll talk again tomorrow.
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