When you think about aggressively growing markets, you might look to the southwestern United States where people flock, looking for jobs and a warm climate. The oil fields of North Dakota and the gas fields of Pennsylvania are also experiencing significant population growth as people seek jobs in those industries. You can also look closer to home.
In recent times, the population of Queens has grown relatively slowly. During the period from 2000 to 2010, the borough added just a few hundred people per year, on average. Since 2010, though, population growth has exploded. Between 2010 and 2012, Queens added 35,600 more people. Many came from births, but 6,514 of them were net move-ins. While Manhattan has historically attracted new residents from other parts of the region and country, Queens has now joined it in this type of growth.
Population growth points to opportunity for investors. When more people come into a market that is fully built-out, creating new units to house them isn’t like doing it in Phoenix, where there is an almost limitless supply of fresh desert right on the outskirts of town. Given that Queens County is essentially 100 percent built-out, the only way to create new units is to redevelop properties as in-fill.
This kind of development is time consuming and expensive. As such, the more likely impact of the population growth in Queens is to have vacancy rates go down and rents go up. Queens approved just 3,182 units in 2011 and 1,529 in 2012 (and 2011 was a record-breaking year!). The most optimistic projections point to a maximum of 8,000 more units being built in a two year period from the fourth quarter of 2013 through the third quarter of 2015. Even if all of these units get built, there is still a great deal more growth in population than there is in rental stock. This points to an excellent opportunity for investors to ride the Queens market’s growth trend.