The document examines the link between population migration and home appreciation using data from the Federal Housing Finance Agency and migration maps. It finds that areas with large net inward migration generally experienced higher home appreciation over the past 5 years, while areas with large net outward migration saw lower appreciation or depreciation. However, it notes that migration patterns alone do not always predict home values, as seen in some areas affected by Hurricane Katrina. The author concludes that while migration provides insight, it is only one factor and requires further study to draw meaningful conclusions, especially in smaller population areas.

1. Population Migration and Home Appreciation – What is the Link? Neil Kearney Kearney Realty Co. Boulder Colorado

2. The Basics The underlying principle for the real estate market is basic supply and demand. If there are too few buyers for any supply of homes, there will be downward pressure on prices. If there are too few homes available for the available buyers, that lack will cause prices to increase.

3. Data Used This is not a comprehensive study. Just a curious Realtor at work. Home appreciation data from Federal Housing Finance Agency www.fhfa.gov Migration maps from an interactive map by Jon Bruner at http://www.forbes.com/2010/06/04/migration-moving-wealthy-interactive-counties-map.html?preload=08013

4. The Premise A large net inward population migration would cause home values to appreciate. A large net outward population migration would cause home values to fall.

6. Red line means net outward population migration to an other given county.

7. The heavier the line the more people who are moving between those two counties.

9. Wenatchee, Washington The population of Wenatchee is around 30,000 so the migration patterns are not very dramatic. Most lines are inward. This small town with good natural surroundings in Eastern Washington was discovered about a decade ago.

10. Houma, Louisiana Houma is located southwest of New Orleans right on the Gulf of Mexico. The map shows only outward migration which is in direct opposition of the premise. Obviously the home appreciation pattern over the past five years has much to do with the post Katrina economy in the area.

11. Mobile, Alabama Mobile shows a mix of inward and outbound migration. It’s interesting to see inward migration from Detroit and Las Vegas as well as a strong migration from Florida.

12. Baton Rouge, LA This map shows mainly outbound migration which would normally lead to home depreciation. Again, the normal patterns have been interrupted by Hurricane Katrina.

13. Spokane, Washington Spokane has had home appreciation of 26.44% over the past five years. This map shows outbound migration to the east and inbound migration from the southwest and Seattle area.

14. Bottom Five Areas for Home Appreciation (FHFA 5 yr. ending March 2010) Merced, CA (-49.34%) Stockton, CA (-45.3%) Modesto, CA (-44.59%) Las Vegas, NV (-42.13%) Vellejo, CA (-39.6%)

15. Merced, California Homes in Merced has had lost roughly 50% of their value. This map shows a clear outbound migration. The same is true for the slides to follow. This holds true to the premise that home values have a positive correlation with migration.

16. Stockton, California

17. Modesto, California

18. Las Vegas, Nevada I love this map. It shows both strong migration and immigration during 2008. Just because home values have decreased 42% it doesn’t mean that all people are leaving. Some people are attracted now that homes are “on sale”.

19. Vallejo, California Again the same pattern as other California areas on this list.

20. Other Areas of Interest Although these areas are not in the top or bottom lists I find the maps very interesting. Detroit Los Angeles Phoenix Seattle Miami

21. Detroit, Michigan (5 year appreciation = -33%)

22. Los Angeles, California (5 year appreciation = -9.21%)

23. Phoenix, Arizona(5 year appreciation = -11.83%)

24. Seattle, Washington(5 year appreciation = +12.98%)

25. Miami, Florida(5 year appreciation = -13.71%)

26. Conclusions There is a direct correlation between migration patterns and home appreciation rates. It is somewhat difficult to spot the patterns and draw meaningful conclusions in areas of modest population without further study. Migration patterns are only one piece of the puzzle and do not always give the full picture (Hurricane Katrina).

27. Sources Federal Housing Finance Agency – Home Price Index publishes May 25, 2010 http://www.fhfa.gov/webfiles/15780/1q2010hpi.pdf Forbes.com – Interactive Feature “Where Americans are Moving” http://www.forbes.com/2010/06/04/migration-moving-wealthy-interactive-counties-map.html?preload=08013 This feature uses 2008 IRS data.

28. About the Author Neil Kearney Kearney Realty Co. / Metro Brokers Boulder, Colorado Neil@NeilKearney.com www.NeilKearney.com 303-413-6624 Has been a Realtor in Boulder Colorado for over 18 years and received his MBA from the University of Colorado in 1999.