Calling All Investors

Where should real estate investors plunk down cash? Dallas-Fort Worth.

Dallas-Fort Worth tops real estate investors' wish lists.

Even Austin can’t beat Dallas real estate when it comes to investors, and we know how crazy that market is. But it seems as if real estate has lost its luster in larger “gateway” cities such as NYC, Chicago, and D.C., according to a survey from PricewaterhouseCoopers and the Urban Land Institute. They asked 1,500 real estate industry professionals to tell them where there is moolah to be made, and North Texas towns of Dallas and Fort Worth topped the list.

“It’s a job creation story,” Mitchell Roschelle, the PwC real estate advisory leader who spearheaded the report, said, citing Dallas, Austin, and Nashville as examples. “Jobs chase the people. As employment rises, more people come, more jobs come, so it’s really a good cycle.”

Employment growth, particularly from smaller companies, is what’s making secondary and tertiary cities more appealing than higher-cost, larger markets, he explained. But finding cities like Austin (No. 2) and Denver (No.6) on the list is hardly shocking.

Still, there were some surprises. Houston, last year’s top market, came in at No. 30 this year while Nashville, which doesn’t have a reputation as a top tier location for real estate investments, cracked the top 10.

Washington, D.C., Boston, and Chicago failed to make the survey’s top 10 while San Francisco and Los Angeles came in at No. 8 and No. 10, respectively.

"'Gateway' markets that were viewed really largely as defensive plays by investors have sort of fallen by the wayside, and opportunities to enhance yield in more offensive plays really got in the spotlight,” said Roschelle. “That’s why you see this rotation toward secondary and tertiary markets — to try to free up some of that sideline capital.”

That’s good news for investors who are still sitting on inventory as North Texas heads into the slower months of our annual sales cycle. Also interesting is the trend toward millennial renters who are eschewing the homebuying process. That’s fueling the trend toward commercial real estate investment in apartments, a market that is booming in urban Dallas.

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A version of this story originally was published on Candy's Dirt.

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No Cap

Dallas was a top-10 destination for Gen Zers on the move for 2023

Photo by Lance Asper on Unsplash

Who wouldn't want to live in a Gen Z paradise like Dallas?

As Gen Z enters adulthood, many are flocking to the nation's biggest cultural hubs like New York City, Los Angeles — and now Dallas, which had the ninth-highest inflow of Gen Zers in 2023.

Dallas' new reputation as a Gen Z hotspot was unveiled in a recent report by American home improvement brand This Old House, which analyzed migration trends across multiple generations using 2023 U.S. Census Bureau data.

Dallas saw an influx of 13,770 Gen Z residents last year to become the generation's No. 9 most popular city. That's 4,223 more Gen Zers than the net migration rate from 2022, the report found.

Real estate marketplace Zillow seems to agree on a statewide scale, declaring Texas as the No. 1 destination for Gen Zers on the move in 2024.

However, as Gen Z Dallasites may have learned, it's going to take a big bite out of their paychecks to live in such a highly sought after city. A March RentCafe housing cost analysis predicted Gen Z adults living in Dallas are likely to spend over $149,000 on rent by the time they are 30 years old.

While Dallas saw big gains in its Gen Z population last year, many other big cities saw a mass exodus. Plano, for example — which gained 1,295 Gen Z residents in 2022 — lost 4,028 Gen Zers in 2023, the report discovered.

The biggest Gen-Z exodus was in El Paso, with a drop of 5,607 — "a sharp turn from 2022 when the city saw an increase," the report said. "Other cities, including Plano, Texas; Memphis, Tennessee; McKinney, Texas; and Wichita, Kansas, are seeing similar declines."

"Gen X, baby boomers, and the Silent Generation are also moving away from major cities, particularly New York City and Washington, D.C.," the report said. "They’re heading to some of the same cities as Gen Z, including Houston and Jacksonville, Florida."

The top 10 cities that gained the most Gen Z residents in 2023 are:

No. 1 – New York City, New York
No. 2 – Los Angeles, California
No. 3 – Houston, Texas
No. 4 – Philadelphia, Pennsylvania
No. 5 – Chicago, Illinois
No. 6 – San Diego, California
No. 7 – Seattle, Washington
No. 8 – Charlotte, North Carolina
No. 9 – Dallas, Texas
No. 10 – Minneapolis, Minnesota

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