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According to the below article, second tier cities like Indianapolis, Kansas City, Denver, Portland, Austin, and other cities in the 1-5 million population range will be where the growth and therefore building demand will be during the next 5 years. Distributors and good contractors in these types of cities will be the hottest prospects for new products and for upgrading stock of lines they already carry.  Building growth should also compound as more skilled workers become available during the next 2-5 years in response to high demand.

As an anecdotal confirmation of this trend, I have a niece who works at Ebay in Silicon Valley.  She pays $3200/month for a studio apartment in San Francisco and commutes on a company bus 75 minutes each way to her job.  She is young and single and just building her career.  Anyone over 30 with a family and saleable skills will be looking for alternatives to this kind of expensive and energy-depleting lifestyle, and technology that allows telecommuting plus employers’ willingness to hire telecommuters in exchange for high quality workers will support second tier city growth.  The article is about home building, but hospitals, schools, government buildings, office buildings, big box stores and other commercial projects always grow around population growth areas.

 

Fast Company staffer Stephanie Kasriel writes about the four ways that our economy will change in coming years. One of them has big implications for home builders, who are always considering where to build their next project.

The 20th century saw big, cosmopolitan cities boom. The best jobs and top talent were concentrated in a few “first-tier” urban centers like San Francisco, New York, London, Tokyo, Los Angeles, and Paris. If you wanted a job, you had to move to one of those places.

That’s already changing. The major urban hubs have largely exhausted their stores of opportunity. The cost of living is now outpacing salaries in many of those places. In Los Angeles,  rents are rising twice as fast as inflation ; in San Francisco earlier this year, rents grew a massive 15% . As a result, residents’ purchasing power is shrinking.  Kasriel posits that in the next five years, more Americans will live in smaller cities while telecommuting to jobs based in large urban centers.

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