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Why We Invest in The ”Smile States” (Sunbelt States)

James Crandall

August 7, 2023 · 8 min read

Smile States

There’s a region in the United States currently experiencing substantial growth predicted to continue. It’s called the Sunbelt States but we like to refer to them as the Smile States because of the smile shape they create. 

Thanks to lower taxes, a lower cost of living, and favorable warm weather, the Southern half of the U.S. is taking the real estate industry by storm.

What are the Sunbelt states, and why are they experiencing growth and an unprecedented pace? We have the answers, as well as information on why we invest in these states.

Let’s get to it!

Sunbelt Map

What are the sunbelt states sunbelt map

The Sunbelt map encompasses a broad area in the southern and southwestern parts of the United States. While the exact boundaries can vary depending on the context and definition, the general outline of the Sunbelt map can be described as follows:

  1. Southern Atlantic Coast: The Sunbelt map includes states along the southern Atlantic coast, such as Florida, Georgia, South Carolina, and parts of North Carolina. Cities like Miami, Orlando, and Atlanta are located in this part of the Sunbelt.
  2. Gulf Coast: The region extends along the Gulf of Mexico, covering states like Texas, Louisiana, Mississippi, and Alabama. Houston, New Orleans, and Tampa are key cities in this area.
  3. Southwestern Deserts: Moving westward, the Sunbelt map includes states known for their desert landscapes, such as Arizona, New Mexico, and parts of southern California and Nevada. Cities like Phoenix and Las Vegas are prominent in this segment.
  4. Southern California: The coastal areas of southern California, including cities like Los Angeles and San Diego, are often considered part of the Sunbelt due to their warm climate and proximity to the Pacific Ocean.
  5. Inland Expansion: The Sunbelt's influence has extended inland, encompassing parts of states like Tennessee, Arkansas, and Oklahoma, where warmer climates and economic opportunities have attracted population growth.

What Are the Sunbelt States? (Definition)

The Sunbelt States are 15 states stretching across the southern part of the United States, from Florida to California. They got the name because of the warm climates each state has near the southern coast.

List of States in the Sunbelt:

  1. Alabama 
  2. Arizona 
  3. Arkansas 
  4. California 
  5. Florida 
  6. Georgia
  7. Louisiana 
  8. Mississippi
  9. Nevada
  10. New Mexico
  11. North Carolina 
  12. Oklahoma
  13. South Carolina 
  14. Tennessee 
  15. Texas

The Sunbelt is home to some of the largest and fastest-growing cities in the nation, including LA, Miami, Austin, Atlanta, Las Vegas, Dallas, and Phoenix.

Typically known for its perfect climate, the Sunbelt states have been making waves recently from their population growth. Over the last two decades, the Sunbelt states have seen consistent growth year over year. 

These states are known for their pleasant climate, with mild winters and hot summers. They're a popular destination for retirees, tourists, and individuals seeking a more comfortable climate. The Sunbelt region has experienced significant population growth and economic development over the years, which has contributed to its attractiveness as an investment destination

But why are so many people moving to the Sunbelt states? Let’s find out.

What attracts people to the Sunbelt States

Why People Are Moving to the Sunbelt States

Since the 1960s, people have been flocking to the Sunbelt states. Back then, it was because that’s where a lot of the jobs were. 60 years later, that’s still one of the reasons people are flocking to the warm weather but there’s more to it. 

Some people are moving down South to enjoy their retirement, and others simply to enjoy the weather. 

We think people are moving because they are less restricted by their work. Pretty much everything about the pandemic was miserable, except for the change from working in office to remote. 

People now have the flexibility to work from wherever they please as long as they have an internet connection. 

So, why not move somewhere warm and more affordable? 

According to the statistics, that's exactly what people are doing. As of 2019, the Sunbelt held roughly 50% of the national population. This number is predicted to rise to 55% by 2030.

Again, affordability could have a huge influence. The median home price in Seattle, one of the largest cities in the Northwest, is $702,000 while the median home price in Austin, arguably a more popular city, is only $465,000. That's almost a $250,000 difference! These aren’t the only cities with drastic differences in home prices. 

Charlotte, SC, which is considered the largest financial city in the South, has a median home price of $324,000. Compare that price to the largest financial city in the North, New York City and you’ll have to pick your jaw up off the floor. The median home price in NYC is $635,000! Almost a $300,000 difference! 

The weather could play a factor in the drastic change in price as the cold harsh winters of the North increase maintenance costs. 

Taxes could also play a role, Northern states typically have more and higher taxes than Southern states. Most Sunbelt states offer low to no corporate, individual, or property taxes.

invest in sunbelt states

Why We Invest in Sunbelt States

Keeping up with lasting real estate trends is crucial for investors. At Yieldi, we work hard to stay ahead of the curve by identifying long-term trends. One of the biggest trends we’ve seen since 2010 is the rise of Sunbelt migration.

In fact, the population growth in major cities averaged 9.5%. This is a massive influx compared to the 1.8% growth in the northeast and 3.0% growth in the Midwest. Over the past decade, these states are responsible for 75% of the U.S. population growth.

These 15 states continue to show promising growth in population and employment opportunities. It helps that most Sunbelt states also offer diverse opportunities in many industries. Seven of the top ten states for job growth are located in the Sunbelt region

Additionally, we invest in Sunbelt states because of less volatility. As previously mentioned, these states have seen slow and steady growth over the course of 10 years or more. The Sunbelt states even held value during the 2008 housing crisis. 

Aside from affordability and steady economic growth, warmer weather is a major factor when moving to and investing in Sunbelt states. Less harsh winters make properties less expensive to maintain. In turn, lowering the price of real estate. 

With more than half of all senior housing inventory located in the Sunbelt states, there’s a high demand for professionally managed rentals catering to retirees.

Should You Invest in the Sunbelt States?

Investing in real estate in the Sunbelt states offers plenty of advantages. However, it should be carefully considered based on your individual goals, risk tolerance, and market conditions.

Here are some reasons why investing in real estate in the Sunbelt states can be attractive:

  1. Strong Population Growth: The Sunbelt states have experienced significant population growth over the years, driven by factors such as a pleasant climate, job opportunities, and a lower cost of living. This can lead to increased demand for housing, driving up property values and rental income.
  2. Economic Expansion: Many Sunbelt states have thriving economies, attracting businesses and job seekers. Economic growth can stimulate demand for real estate, including commercial properties in addition to residential ones.
  3. Tourism and Hospitality: The warm climate and popular tourist destinations in the Sunbelt States create opportunities for short-term rentals and vacation properties.
  4. Retirement Destinations: The Sunbelt region is favored by retirees seeking a comfortable and active lifestyle. This demographic can drive demand for retirement communities, assisted living facilities, and other housing options tailored to seniors.
  5. Diverse Markets: The Sunbelt states offer a diverse range of real estate markets, from bustling urban centers to suburban communities and rural areas. This diversity can provide investors with various options to suit their investment strategy and risk profile.
  6. Favorable Regulatory Environment: Some Sunbelt states have business-friendly policies and tax incentives that can be favorable for real estate investors.
  7. Potential for Appreciation: The combination of population growth, economic development, and housing demand contributes to property appreciation over time—and that means long-term capital gains for you.

Start Investing in Growing Markets

As home and property owners look towards growing economies, the Sunbelt states show a promising future.

If you’re ready to make your first investment, set up your account with Yieldi. After completing your investor profile, you’ll be able to participate in our investment offerings located throughout the Sunbelt region.

We are investors ourselves and realized how difficult it was for everyday investors to access high-yield investments, that’s why we created Yieldi. To make investments that were once only available to a select group of people, easily accessible so everyday investors can reap the rewards too. 

Check out our offerings to get started investing today. 

If you want more information about our investing strategies and experience, contact our team. We are more than happy to help! 

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