Data pertaining to real estate markets and populations in recent years has led to an increase in a trend known as “smile investing.” To understand the concept of smile investing, picture a smile laid out against the map of the United States. Along the smile line real estate activity is increasing. The smile line makes a curve from areas in the northeast, down to the Sun Belt states like Florida, Texas, and Arizona, and then back up to the northwest in areas like Seattle and Portland. There are a multitude of reasons that the “smile investing” real estate philosophy is back.
Slower Growth In Traditional Urban Cities Setting The Trend
In the United States, growth in some traditional major cities has slowed down as more residents migrate to secondary cities like Austin, TX, Raleigh, NC, and Nashville, TN. Consider the statistics: Bloomberg Businessweek reports that the Austin metropolitan area has seen a growth rate of 5.4% between 2010 and 2013. On the other hand, the Census Bureau estimates that during the same period of time, New York City experienced a growth rate of only 2.8%. There are several reasons that this is happening, but one of the leading factors is the sharp contrast in the cost of living between traditional urban cities like New York and San Francisco and secondary cities like Houston and Portland.
The Smile Impact On Real Estate Agents
Even if you understand reasons why the “smile investing” real estate philosophy is back, it is still important that you can connect the trend to your own real estate business. There are a few things to think about if you want to adapt to the return of smile investing:
- Whether or not a “smile market” is close to you: if you live in an area that is on the smile path, you might see an uptick in the number of clients that you have and deals that you can close. Even if you are located in an outlying suburb of a smile area, you still may see a ripple effect of improvement in business
- What to do if you are not in the smile market: in areas where housing growth is not as pronounced, realtors must be sure that they have the ability to adapt to market slowdowns (as if you already hadn’t figured that out). You might retool your marketing campaign or think about how you can maximize the value that you are getting from your existing base of clients
- How long will the smile market last: although these smile markets have seen an increase in investment, this trend might not last forever. As real estate plots begin to fill up, prices may go up and drive out existing residents. For example: real estate prices are on the rise in areas like Texas, Florida, and Nevada according to MSN Real Estate.
The “smile investing” real estate philosophy is back, but what does it mean for your business? Only you can decide what kind of an impact the smile philosophy will have on your real estate business and whether it leads to boom or bust.