Dr. Lloyd Potter | TEXAS DEMOGRAPHER
Texas Demographic Conference
May 29-30, 2024 | Austin, TX
Texas' Unstoppable Growth: A Golden Opportunity for Commercial Real Estate
Texas is booming. We're the fastest-growing state in the U.S., adding more people than any other state – and we're doing it rapidly. But what does this unprecedented growth mean for commercial real estate (CRE) investors, developers, and businesses? According to Texas' State Demographer, Dr. Lloyd Potter, the implications are significant, and they're largely positive.
The Numbers Don't Lie: A Deep Dive into Texas' Growth
Dr. Potter's data paints a clear picture:
Population Explosion: Texas has surpassed 30.5 million residents. We're growing at a rate of 1,300 people per day, exceeding the national average by far.
Economic Magnet: We're not just attracting people, we're attracting talent. Domestic migrants moving to Texas tend to have higher levels of education and income compared to native Texans. This influx of skilled labor is a boon for our economy.
Shifting Demographics: The Hispanic population is now the largest demographic group in Texas, contributing significantly to our growth. While educational attainment levels in this group are currently lower than in other demographics, there are significant opportunities to invest in education and workforce development.
International Influx: Texas is a magnet for international migrants, particularly from Asian countries. This adds cultural richness and diversity to our state and strengthens our connections to the global economy.
Urban Concentration: Growth isn't evenly distributed. The "Texas Triangle" – Dallas-Fort Worth, San Antonio, Austin, and Houston – is the epicenter, with suburban rings experiencing the most rapid expansion.
Why Texas' Growth is Great for Commercial Real Estate
Increased Demand: More people means more demand for housing, office space, retail, industrial properties, and all other types of commercial real estate. This creates an environment ripe for investment.
Diversified Economy: Texas' economy is diverse, with thriving sectors in technology, energy, healthcare, manufacturing, and more. This diversity provides stability and resilience to the commercial real estate market.
Business-Friendly Environment: Texas' pro-business policies, low taxes, and light regulation attract businesses and investors. This creates a healthy ecosystem for commercial real estate to flourish.
Infrastructure Investment: The state is heavily investing in infrastructure to support its growth. This includes transportation, water, and energy projects, all of which enhance the value and appeal of commercial properties.
Young Workforce: Texas has a relatively young workforce compared to other states. This provides a strong foundation for long-term economic growth and sustained demand for commercial real estate.
Key Takeaways for CRE Professionals
Focus on the "Texas Triangle": The most significant growth is concentrated in the major urban areas and their surrounding suburbs. This is where the most immediate opportunities lie.
Understand the Shifting Demographics: As the Hispanic population continues to grow, it's crucial to tailor commercial real estate offerings to their specific needs and preferences.
Invest in Workforce Development: Partnering with educational institutions and workforce development programs can help bridge the educational attainment gap and create a more skilled workforce for the future.
Monitor Infrastructure Projects: Stay informed about major infrastructure projects as these can significantly impact the value of commercial properties in surrounding areas.
Embrace the Long-Term: Texas' growth trajectory isn't slowing down anytime soon. This is a market with long-term potential for those who invest wisely and adapt to the evolving landscape.
Texas' growth is more than just numbers; it's a testament to the state's economic vitality, attractive lifestyle, and unwavering spirit. For those in the commercial real estate sector, it's a call to action – an invitation to participate in building the future of a state that's on the rise.
FACTS AND FIGURES
Population:
Texas population: Over 30.5 million
Growth rate: 1.6% (2022-2023)
Growth compared to other states: Faster than all but two other states
Daily population growth: 1,300 people per day
Annual population change: More than any other state
Percentage of total U.S. population: Increasing for Texas
Counties losing population: 75 out of 254
Hispanic population: Exceeds non-Hispanic white population
Hispanic population contribution to growth: Almost half of the population change last decade
Percentage of Hispanic population with a bachelor's degree or higher: 19%
Percentage of non-Hispanic white population with a bachelor's degree or higher: 42%
Percentage of Asian population with a bachelor's degree or higher: 64%
Counties with natural decrease (more deaths than births): Over half
Migration:
Domestic migration: Declining slightly in the most recent year
International migration: Increased dramatically after the pandemic
Net out domestic migration: Harris County, Dallas County, Travis County
Net in domestic migration: Suburban ring counties
Origin of domestic migrants: California, other Western states
Educational attainment of domestic migrants: Higher than native Texans
Magnet for international migrants: Harris County
Countries of origin of international migrants: Shifting from Mexico to Asian countries (China, India)
Education:
College enrollment: Declining for undergraduates, increasing for graduates
Decline in undergraduate enrollment compared to other states: Significant, only Utah saw an increase
Increase in graduate enrollment compared to other states: Largest in the country
Other:
Total fertility rate: Below 2.1 (replacement level) since 2011
Birth rates: Declining overall, slight uptick in Hispanic birth rates in the most recent year
Major driver of declining birth rates: Delayed childbearing
Listen to the Texas Triangle Podcast with Guest - Texas Demographer Dr. Lloyd Potter
The Texas Triangle Podcast had the honor of gaining insight from esteemed Dr. Lloyd Potter, Texas State Demographer for their DEBUT episode. Join host DeLea Becker, Michelle Levy, and Diane Buhl monthly as they bring you Guest / Experts and incredible information to assist you in your #CommercialRealEstate endeavors. Whether it is Investing & Selling property or growing your business in Texas - they bring you knowledge, data and insight they study for themselves and share freely with you.
With a rapidly growing population, Texas is an attractive location for commercial real estate owners, investors, and business owners. The state's population growth has led to increased demand for office, retail, and industrial properties, as well as a growing need for residential and multifamily properties.
Commercial real estate owners can benefit from the state's pro-business climate, low tax rates, and affordable cost of living. Investors have a wide range of opportunities in Texas, with many thriving cities and growing industries. Business owners can take advantage of the state's robust economy, diverse workforce, and access to major transportation hubs.
Overall, Texas is a great place for those interested in commercial real estate, with plenty of opportunities for growth and success.
Dr. Lloyd Potter was appointed State Demographer on June 4, 2010. Dr. Potter holds a Ph.D. in Demography and Sociology from The University of Texas at Austin, a Master of Public Health Degree from Emory University, a Master of Science in Education from the University of Houston at Clear Lake, and a Bachelor of Science from Texas A&M University. He is a professor in the Department of Demography at The University of Texas at San Antonio where he also serves as the director of the Institute for
Demographic and Socioeconomic Research (IDSER). He has extensive experience working as an applied demographer in several settings.
