Denver, Colorado – Real estate investors are constantly seeking to understand long-term demographic trends to make informed decisions. With population growth varying significantly across different regions in the United States, the demand for real estate and its value per square foot is heavily influenced by population density. As such, investors are keen on identifying areas experiencing an influx of people as ideal locations for property ownership.

Demographic shifts, particularly in population movements, are projected to have a significant impact on Real Estate Investment Trust (REIT) value in the next five years. A notable trend highlighted by S&P Global Market Intelligence is the increasing percentage of Americans aged 65 and older. This demographic shift, often referred to as an “aging population,” is expected to rise from 18.6% to 20.7% by 2030, reflecting a changing societal landscape.

The aging population presents both challenges and opportunities for the real estate market. As older individuals tend to require more healthcare services, there is a growing demand for senior housing, which directly benefits healthcare REITs. However, the popularity and anticipation of this trend have already been factored into stock prices, particularly for senior housing-focused REITs such as Ventas and Welltower.

In contrast, sectors like medical office real estate present more attractive valuations, offering investment opportunities for those looking to capitalize on the aging population trend. Global Medical REIT and Healthpeak Properties, for example, trade at lower multiples compared to senior housing REITs, making them appealing options for investors.

Apart from demographic changes, population movements also play a crucial role in shaping real estate value. Investing in properties in medium-density areas with the potential for future growth in population density is a strategy favored by many investors. Areas like Florida, Texas, Arizona, Utah, Georgia, and Denver within Colorado are highlighted as key regions experiencing significant population influx, making them attractive for real estate investment.

Moreover, the correlation between population growth and household income further emphasizes the importance of understanding demographic trends in real estate investment. Higher household income typically translates to increased demand for rental properties, benefiting apartment REITs like Camden Property Trust, especially in regions with strong population and income growth.

Lastly, the article stresses the significance of price per square foot as an overlooked metric in evaluating real estate value. The difference in price per square foot between high-density cities like New York City and growing regions like Phoenix, Houston, or the Dallas-Fort Worth area showcases the impact of population density on property appreciation. As cities in the Sunbelt region continue to experience growth in population, jobs, and income, the value of real estate investments in these areas is expected to appreciate over time.