An Investor’s Guide to Population Research


Have you ever walked into a 31-flavors Ice Cream and just stood there completely undecided?

For anyone with a sweet tooth like me, you know how this indecision feels. There’s a plethora of options to choose from! From the classic Chocolate Chip Cookie Dough to the sweeter Pralines and Cream. I also love anything with a coffee flavor. 3 samples later and I usually just opt for the Chocolate Chip Cookie Dough.

Similarly, when you’re picking a real estate market to invest in, the vast array of options can be overwhelming. There are your local markets, which you should always consider first. Then you’ve got markets that are a bit further away and may require a few hours to drive to. Lastly, there are the out-of-state markets where you’ll need to hop on a plane to visit.

How do you choose a market?

Unlike with ice cream, there are no free samples when buying real estate. So before selecting where to invest your hard earned dollars in, you need to really understand that market.

Real Estate Market Fundamentals

This post will be the first of a mini series in understanding your market. Once you understand the fundamentals, making the decision to invest there becomes easier. I study the following 5 real estate fundamentals to help me understand a market.

  1. Population
  2. Local Economy
  3. Housing Market Cycle
  4. Cash Flow Potential (e.g. Rent-to-Price Ratios)
  5. Rental Laws

By market, I’m talking about a large metropolitan area like Atlanta, Denver, or Memphis. Once I’m able to determine if that macro market is suitable to invest in, only then do I look at specific neighborhoods where crime, schools, and other factors become a bigger driver.

This post will kick things off with our fist market fundamental, Population.


Arguably the most important influence on housing demand is population. People need a place to live so a population that is growing, leads to a greater demand in housing.

Changes in population are a direct result of 3 events. Births, deaths, and net migration (people moving in and out). Therefore, population growth occurs only in two ways:

  1. Natural Growth: when the birth rate > mortality rate
  2. Net positive migration: when the number of migrants in > the number of migrants out

Here’s a few fun facts according to the US Census Bureau.

In the US, there’s a birth every 8 seconds, 1 death every 13 seconds, and 1 international migrant (net) every 28 seconds. Taking all this into account, the US population grows at a net gain of 1 person every 12 seconds.

I look for the following three population characteristics in a real estate market.

  1. Overall Population Growth
  2. Net Positive Migration
  3. MSA Population Minimum of 250,000

Let’s talk about each one in more detail.

1) Look for a Growing Population

For a stable real estate market to invest in, look for populations that are trending upward. It’s not a good sign if the total population of an area is shrinking in recent years. A shrinking population will devalue real estate in the long run.

Whether the population is growing or shrinking, you’ll want to figure out what is driving the change in population. In later posts, we’ll dive into studying the local economy, which may shed light on why the population is moving the way it is and whether the change is temporary.

Google Public Data Explorer

The simplest and fastest way to check out an area’s population is to just do a Google search of “CITY NAME population”. Google takes public data collected by the US Census Bureau and displays it in a easy to use graph.

For example, here’s what pops up when I do a Google search on “Los Angeles population”.


Take this a step further by clicking on “explore more” and you can quickly compare multiple cities, counties, and change the data range. You can even plot some the population based on demographics (age and sex).

The compare feature is very powerful and one of my favorite features. If I’m looking into a specific city, I want to know the population trend of not only that city, but the neighboring cities and the county it’s located in as well. This puts the city’s population into geographical context. I can then quickly determine whether a city is trending the same, faster, or slower than the general metro area that is’s located in.

For an example of population comparisons using the Google Data Explorer, check out an in-depth market review I recently posted on Temecula, CA.


While I love Google, it does come with some limitations.

There are two problems when relying on Google’s Public Data Explorer for population research.

  1. Google doesn’t have the latest population estimates generated by the US Census Bureau and can even be a couple years behind.
  2. What if you don’t know what area to research? Manually putting in 1 city after another is not an efficient way to discover a booming population.

Luckily, the latest population data is freely available online at the US Census Bureau.

US Census Bureau

The US Census Bureau is the ultimate source for US population data.

There’s a wealth of data here that’s readily available for free! Interested in what parts of the country are booming or what cities people are moving to? Or how about the income levels, job categories, or age ranges of people who are relocating? The US Census Bureau has it and even more.

Nearly every other site such as Google or City-Data pulls data in from the US Census Bureau.

I admit. It can be a little overwhelming going straight to the Census Bureau.  You may even be tempted to just stick with Google’s Data Explorer.

Though if you’re serious about researching markets, you must get comfortable with the Census Bureau. There’s much more to population statistics than reporting the total estimates that you’ll find on Google.

Here are annual population % change between 2010 and 2015 across regions of the US.

PopulationPopulationRegional data helps show large macro trends of where populations are growing the fastest. Based on data, we see the greatest population growth happening in the South and West.

If we narrow the data further to look at state population changes, we can hone in on the states with the greatest growth as shown below.


With the exception of North Dakota, states in the South and West are growing the fastest by percent change. Keep in mind though that a low or even negative growth state does not imply there aren’t good real estate markets there.

We’re still dealing with pretty large areas. The larger state and regional data is to put your metro market into context. We’ll get into metro areas later in this post. My point here is that I hope you’re starting to see how much data there is available at the Census Bureau.

Let’s now move onto migration patterns!

2) Look For a Net Positive Migration

Every year, people move. They move for all kinds of reasons. According to the Census Bureau, between 2014 to 2015, nearly half (45%) of the 28 million people aged 16 and older that moved in the US, stated housing as a reason for moving. Housing reasons included wanting a new or better home, cheaper housing, and being able to own rather then rent to name a few.

Whatever the reason, every location experiences net migration. That is, there are people who are moving into a market while others are simultaneously moving out.

As a real estate investor, we’re looking for a market with net positive migration.

Net positive migration is when people moving in > people moving out

If we only study the total population of an area, we don’t get a clear picture of what’s really going on. Remember that the overall population estimate is a result of 3 events: births, deaths, and net migration.

So here’s the problem. You can get into a situation where there’s a net negative migration (i.e. more people leaving than coming in), but still have a rise in the total population.

How is this possible?

Consider what has happened to Milwaukee County, WI between 2010 and 2015.

  • Natural growth of 29,629
  • Net negative migration of 18,533

Sure, population increased by 9,434 over this 5 year period. Though it only increased because the natural growth (i.e. births – deaths) exceeded the net negative migration. So if you only look at the overall population numbers, you would miss what’s actually going on!

3) Stick to an MSA of 250,000 or More

I prefer to invest in a city which belongs to a Metropolitan Statistical Area (MSA) with at least 250,000 people.

An MSA is a collection of cities usually clustered around at least 1 urbanized city with a minimum of 50,000 people.

Markets that are very small adds risk. In smaller populations, there are less employers there who tend to represent a more narrow set of industries. So the risk is investing in a local economy that is less resilient to market downturns because the employer base is either small in numbers and/or not diverse across different industries. In a future post, I’ll discuss local economy characteristics that affect real estate.

By excluding small markets, I’m also filtering out hundreds of metros that I need to research. As of July 2015, there are 382 MSA’s in the US. If considering MSAs with a population greater than 250,000, that reduces the number of MSAs down to 186. If my lower cutoff was 500,000, then that leaves 107 MSAs. If 1 million, then only 54 MSAs remain.

Studying this many markets sounds like a lot of work and in fact, I don’t study all of them. Instead, I apply the minimum population as a first filter. I then apply the other criteria such as a growing population and net positive migration as a second and third filter. I filter markets using a useful population excel tool that I created as I’ll share in the next section.

My Free Population Research Tool

By now you should recognize how valuable the Census Bureau is to studying a market. We can’t just rely on the total population trends displayed by Google. We need to study the migration changes. But with hundreds of markets out there, analyzing all these markets can be incredibly time-consuming.

Fortunately, I’ve done all the hard work for you. I’ve downloaded the most important population data from the US Census Bureau, organized it, and made it into a Population Research Tool.

In a follow up post, you can check out a video tutorial that walks you through this tool.


Tool Features

  • Quickly look at every metro in the entire country.
  • Compare population growth, % growth, births, deaths, domestic and international migration.
  • Sort markets based on population statistics (e.g. size, % growth, etc.)
  • Filter markets that only meet minimum population size (e.g. MSA larger than 250,000),  population growing, and net positive migration
  • Filter markets by county, MSA, or even by state.

Subscribe and you can download my Population Research Tool for free! Once you download it, check out the video tutorial to see how I use this tool.

Summary of Resources

The resources that I use to study market demographics are as follows.

  • US Census Bureau – population estimates down to the city level along with other demographic information
  • Google Public Data – easily plots population data from the US Census Bureau like the graph shown above

As an investor you should try to understand why the population is trending the way it is. In a future post, I’ll dig into local economics which will usually help explain the net migration patterns you’re seeing in the population data.


Is all this research required?

Not really.

Just like when you buy a stock, you’d don’t have to research the company you’re buying. It isn’t recommended, but people do it all the time.

In this post we talked about focusing on total population growth as a starting point. Most areas will see a natural population rise because the birth rate typically exceeds the mortality rate. To better identify a real estate market with a booming population, we have to look at migration patterns.

Either download the data from the US Census Bureau yourself or save yourself hours by using my free population research tool. This tool already includes the population statistics you’ll looking for and covers every MSA in the US.

Subscribe and you can download my Population Research Tool for free!

Do you research different market populations? If so, how do you go about it?

If you downloaded my free population research tool, how’d you like it? 

4 thoughts on “An Investor’s Guide to Population Research

  1. Wow, this is super valuable! I didn’t know Google had some of the public data available like that, great quick way to do things.

    I agree that the census data is the best. Your population research tool is going to make this much easier – thanks for sharing!

    • Glad you found it useful Brian! I think Google’s got some awesome visual tools. Downside is that the data doesn’t match the latest estimates that the Census Bureau publishes and they only plot limited parameters like population. You kind of miss out on the migration trends. It’s really amazing how much information the Census Bureau collects and freely provides to the public for anyone interested.

  2. Way cool, OB! And, how did we not have a conversation about ice cream at FinCon??

    Population growth is a huge variable when it comes time to consider a real estate investment. I love how you have created a simple tool to give a quick visual representation of what’s going on in a particular area.

    As real estate investors, we will have a nice advantage if we can position ourselves into areas of future growth.

    That’s incredible to see the growth in North Dakato! I actually know someone that moved there recently and he loves it… hmmm… maybe a trip out there soon. 😉

    • Hey Michael! Glad you liked the tool. It’s interesting how the data can really point you in a direction where you otherwise may not have even considered. If you make it out to N.D., let me know how you like since I’ve never been.

Leave a Reply