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When we talk about 2016’s Top 10 MSAs by purchase loan count, the list looks like this:
All Occupancy Purchase Loans
New York, NY
Los Angeles, CA
There are no real surprises—these are the usual suspects in terms of generating healthy amounts of unit volume seemingly every year. So, if you are looking to grow but only have enough resources to enter one of these markets, which would it be? Is opening a location in New York a no-brainer?
Or, if you are already in most or all of these markets, is your job done? Maybe. For now. But what about for the next two years? For the next five years? Should you allocate your limited resources exactly as you are allocating them today?
Now, here’s another quiz. Name the Top 10 MSAs by purchase loan count in 2016 that are also the fastest growing over the next five years. Is it the same list? No need to wonder because here’s the answer:
All Occupancy Purchase Loans Rank
Five-Year Speed of Growth Index
Five-Year Speed of Growth Rank
San Diego, CA
Las Vegas, NV
Let’s look at the map below.
Figure 1. Map of 2016 largest MSAs that are also the fastest growing over the next five years.
So, you still thinking about going to or reinvesting in New York? New York is definitely the largest in terms of volume (we project around 140,000 purchase loans in 2016), but it’s growing much more slowly in comparison to the other markets (26th out of our list of 65 largest MSAs in terms of unit volume).
On the other hand, Riverside, CA is only 10th in terms of volume (we project 65,000 purchase loans in 2016), but it’s growing much more rapidly relative to the others (3rd out of our list of 65 MSAs and growing about 61% faster than New York). Las Vegas, NV is even smaller than Riverside (we project 36,000 loans in 2016), but it’s the second fastest growing MSA over the next five years.
What’s the point? Always, always, always make sure you have all the quantitative data at your disposal when making decisions for today and into the future.
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