InSight

What’s making Real Estate investors “Smile”?

Financial Planning Dentist

Investing in the property along with demographic trends is a wise and efficient investment strategy because it allows investors to capitalize on the housing, storage, and infrastructure needs of huge swaths of people. For example, as the population ages, there is an increasing demand for senior living facilities and healthcare services. By investing in properties with supportive demographics investors are more likely to see better returns. 

Similarly, as the younger generations continue to delay homeownership and prefer renting, investing in rental properties in desirable areas can provide a steady stream of income. By analyzing demographic trends and investing in properties that align with these trends, investors can make informed decisions and potentially maximize their returns while minimizing their risks.

This brings us to the demographic shift of Americans moving southward…to the “Smile States”


First, let’s define what “smile” states are. These are the states that have a southern border on the Gulf of Mexico and a western border on the Pacific Ocean, and up to the mid-Atlantic states,  forming a smile-like shape on the map. 

Boulder Financial Advisors, Investment Specialists, Real Estate Advisors

These “smile” states include California, Arizona, New Mexico, Colorado, Texas, Florida, Georgia, Virginia, and the Carolinas. Overlapping, The states that attracted the most “new residents” in 2022 are Florida, Texas, North Carolina, and South Carolina, followed by other states in the South and West, Including, Texas, Colorado, and Arizona (the full list can be found here).

But why do people invest in these states, and what’s driving the real estate market in these areas?

One of the main reasons people invest in “smile” states is for the lifestyle they offer. These states have a warm climate, beautiful beaches, and plenty of outdoor activities. This makes them attractive to retirees, who are looking for a place to settle down and enjoy their golden years. According to the U.S. Census Bureau, Florida is the top destination for retirees, with over 500,000 people moving there each year.

But it’s not just retirees who are attracted to these states. Younger people are also moving to “smile” states in search of job opportunities and a lower cost of living. For example, Austin, Texas, has become a hub for tech companies, attracting young professionals from all over the country. Additionally, the Raleigh, Durham, & Chapel Hill part of North Carolina has seen a bump in younger Americans migrating to the area to enjoy the weather, adorable housing and cost of living, and thriving economy. 

Another factor driving the real estate market in “smile” states is the shift in demographics in the United States. According to a report from the Urban Land Institute, millennials and baby boomers are driving the demand for rental housing in these areas. This is because many millennials are delaying home ownership and opting to rent, while baby boomers are downsizing and looking for more affordable housing options.

But it’s not just the “smile” states that are experiencing a shift in demographics. The entire country is undergoing a major demographic shift, with people moving from high-tax states like California and New York to lower-tax states like Texas and Florida. This is according to a report from the Tax Foundation, which found that people are leaving high-tax states at an alarming rate. This has created a demand for real estate in these lower-tax states, as more people look to relocate.

Investing in “smile” states can be a great opportunity for those looking for a better quality of life and a potential return on investment. With the shifting demographics in the United States, these states are becoming more attractive to both retirees and younger professionals. As people continue to move around the country in search of better taxes and weather, the real estate market in “smile” states is likely to remain strong.

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