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Why I’m Bullish on The Heartland Post COVID

While the election and the end to COVID-19 still remains uncertain, one thing that is certain is that people are leaving dense major metros in droves. Many initially left the city in March for a vacation home if they were fortunate enough to have one. However, the virus did not blow over in just a month or two. It is still lingering with no real end in sight.

People are now looking to get out of the city, and in some cases, they are willing to pay a hefty price to do so. Moreover, they have become used to the work from home environment and the need for more space. However, not everyone will be able to pay a big price tag to get into the best suburbs surrounding major metros and will be looking to escape high prices on the coast. This is especially true for the millennial generation and those in middle to lower incomes. Due to this and the acceleration of remote working the heartland is ripe for opportunity.

Middle America was already poised for growth prior to COVID due to its lower cost of living and high quality of life. Some of the top markets for population growth include Nashville, Oklahoma City, Omaha, and Kansas City. Population growth, is one of the main metrics we look for when analyzing a prospective market to invest in. These markets offer residents more square footage, lower monthly payments, and friendly business environments with growing employment opportunities. As we have seen over the last several months families are looking for a bigger backyard and more space to play with their children in safe open environments.

With technology and work from anywhere options now more available than ever, the possibility of moving to these lower cost markets has never been stronger. In fact, many large tech companies are now looking to expand their talent search outside of major hubs like Silicon Valley to take advantage of the work from home trend. Facebook for example is looking to tap into diverse hiring candidates throughout the country. Technology is enabling companies to extend more offers to remote workers which will save them money while also allowing more freedom to its employees to live in a lower cost area. In addition, current Facebook workers will now be able to request a fully remote position if they meet certain criteria.

However, it’s not just millennials who will be moving to the heartland for better opportunity. As more and more baby boomers retire many will look to Middle America to stretch their retirement further or move back home after making their money in higher priced coastal cities. With this positive net migration and more businesses joining the region there will be an uptick in income growth. Due to these changing demographics real estate prices should see steady growth and now may be a great time to invest in these markets.

The Heartland has long been a place where investors have been able to see predictable cashflow that has been fairly insulated from market swings. With the work from home environment solidified and the ability to move to a more affordable high-quality area, the heartland is now showing its signs of stability and solid long-term growth.

Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.

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