Sun Belt Cities Most Likely to Keep Up With Housing Demand in the Next Decade

Sun Belt Cities Most Likely to Keep Up With Housing Demand in the Next Decade

Housing inventories are tight everywhere, but the problem is particularly bad in large cities and their associated suburban areas. According to researchers at, “Job growth and housing [are] not matching up” in most large cities, with “job-rich coastal markets” outside the southeast and southern United States doing the worst job of keeping up with housing demand. The report also cited Rust Belt cities like Cleveland and Detroit as failing to add enough housing over the last decade.

“While some major markets are building enough to keep up with demand, many of the most-sought-after metros are severely underbuilding,” the analysts wrote. They used U.S. Census data to establish that the United States added more than 9 million new housing units between 2010 and 2020, which expanded the national housing inventory by 6.9 percent. However, only four of the 25 largest metro areas in the country met the minimum necessary threshold for new households built: a new home for every two new jobs.

This is not necessarily bad news for real estate investors, who have struggled in the current market to generate leads on properties that may be acquired and held as rentals or renovated and flipped for a profit. In fact, investors who identify solid, reliable ways of generating these leads in cities like Dayton, Cleveland, Akron, and Toledo, Ohio; or Detroit may establish themselves in a market that will sustain their portfolios for years to come. Unfortunately, Midwestern and Rust Belt cities remain something of a gamble economically since the pandemic hit local economies hard, thanks to stringent lockdown regulations that put many investors and other small-business owners permanently out of business.

Instead, this data indicates for many investors that the best areas of the country upon which to focus likely lie in the southeast and mid-southern United States, where there is room to develop new housing, pandemic restrictions were relatively investor- and business-friendly, and public policy has remained focused more on keeping the economy open than on keeping people locked in their homes. These regions also have the benefit of having more room for new construction and residential development than other parts of the country and the added attraction of a pleasant climate the majority of the year.

“The rise of remote work … could be a catalyst for change in the housing market. If the link between work and home location is increasingly broken, the lifestyle preference of remote workers may start to dictate the next shift in housing demand,” ApartmentList’s research team wrote. This, too, will add to the benefits enjoyed by southeastern investors, since coastal locations are within four hours’ drive of most markets in the region and more and more people are moving to the area to enjoy the proximity.