Job growth may be finally slowing and layoffs were prominently featured in headlines to start 2023, but there's no doubt that the Sun Belt continues to lead the way for the best job markets in the United States.
A recent study from Moody's and the Wall Street Journal looked at regions with at least 1 million in population and found that, overwhelmingly, the best job markets were found in the South, with 9 out of the top 10 coming from cities in Tennessee, Texas, Florida, North Carolina and Georgia.
The study ranked the strongest labor markets based on five factors: unemployment rate, labor-force participation, changes to employment levels, the size of the labor force and wages in 2022.
The job data follows the demographic shifts we've seen over the past several years with more people leaving high cost metros for more affordable areas in warmer climates. This has results in many young, educated people helping bolster the workforce and making the regions attractive to families as well. Outside of the financial considerations, these markets offer a variety of amenities around outdoor activities, lively music scenes, nightlight, food and strong artistic communities that adds to the attraction.
Major employers have followed the trend. Many of the traditional financial powers in New York City have been migrating to Florida, andElon Musk continues to expand around the Austin area as part of his plan to make his own Texan Utopia.
Miami & its mayor, Francis X. Suarez has been particularly aggressive in targeting companies and individuals from the Northeast (especially New York), and they've had a lot of success. They've even convinced famed Citadel founder Ken Griffin to pledge billions by moving his firm to Miami to create "Wall Street South". While the growth in Miami has been incredible, many expect to see the area become a global force over the next decade.
Real estate trends have followed the migration south. There is a near record amount of construction on new multifamily units coming to the market over the next 12-18 months, with many of those popping up in growth cities like Dallas and Atlanta. Despite that, many feel that population growth will continue and the new demand won't keep up with supply for long. (That's one reason we continue to keep our deal flow active, actively searching the Sun Belt for quality assets for our new Multifamily Fund.)
The increased demand has let to an increased cost of living, of course. Rents rose quickly over the pandemic, at levels we're not likely to see again. However, the relative cost of living in, say, Jacksonville vs New York City makes a move incredibly attractive. And, despite the negative headlines, no economic downturn lasts forever, and the companies investing in these markets will will create fierce competition for qualified workers in tech, healthcare, education and other verticals, creating a rising wage base when they begin to grow again or potentially shift their workforce to less expensive, employer friendly regions.
Finally, as business and recreational travel have picked up, destination markets have also moved up in the rankings. New Orleans, Las Vegas, Orlando and other major tourism meccas have benefitted tremendously from the pent up demand in travel. In fact, the rebound in hiring across leisure and hospitality has been a major reason for propping up a resilient labor market that has predominantly resisted rising rates and high inflation.
We expect these southern Southern cities will help lead the way out of the current downturn and potential recession, making many of them the best markets for multifamily investing now. Markets like Atlanta just have too much momentum and the market fundamentals are too strong to ignore. The ingredients to attracting and retaining workers are in place, and the regions are investing in their infrastructure to support growth well into the future.
Top Job Markets in the U.S.
1. Nashville, TN
2. Austin, TX
3. Jacksonville, FL
4. Dallas, TX
5. Raleigh, NC
6. Atlanta, GA
7. Orlando, FL
8. Charlotte, NC
9. Salt Lake City, UT
10. Miami, FL
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About Ellie Perlman
Ellie Perlman is the founder of Blue Lake Capital, a commercial real estate investment firm specializing in multifamily investing throughout the United States. At Blue Lake Capital, Ellie partners with both institutional and individual investors to grow their wealth by achieving double-digit returns by investing alongside her in exclusive multifamily deals they usually don't have access to.
A defining factor of Blue Lake Capital’s strategy is founded in utilizing machine learning/artificial intelligence throughout the course of all acquisitions and asset management. This advanced technology enables the company to produce accurate and data-driven forecasting for all assets on a market, property, and even tenant basis. In doing so, Blue Lake is able to lead commercial investments with the full capabilities of today’s technology.
Ellie is the founding host of REady2Scale, a podcast that highlights the assets, processes, and strategies for the multiple approaches to successful real estate investing.
She started her career as a commercial real estate lawyer, leading real estate transactions for one of Israel’s leading development companies. Later, as a property manager for Israel’s largest energy company, she oversaw properties worth over $100MM. Additionally, Ellie is an experienced entrepreneur who helped build and scale companies by improving their business operations.
Ellie holds a Masters in Law from Bar-Ilan University in Israel and an MBA from MIT Sloan School of Management.
You can read more about Blue Lake Capital and Ellie Perlman at www.bluelake-capital.com.