The CDRPC recently acknowledged that the region is losing the Baby Boomer and Millennial populations- key demographics driving housing market trends - to other locations.
This month we revisit the Albany-Schenectady-Troy MSA, Camoin Associates’ home turf, and explore the region’s demographics. Last week, I explored the housing market trends on a national and regional level but we also need to understand the demographics of the region to understand the dynamics between the housing market and region's population. In this Part II article, I'll look at some demographic trends in age distribution and population. I know you are all religious readers of the Navigator, but in case you missed last week’s housing market trends article, see my article "Home, Sweet Home?" from last month's Navigator.
Currently, the population of the Albany-Schenectady-Troy MSA is just over 886,000 people. By 2020 that number is expected to rise to over 900,000, a positive change of 2%. In the previous 5 years, ending in March 2014, Albany and Saratoga counties accounted for 95% of the population growth that occurred in the total MSA.1
The average household size is not expected to change in the next five years, while the number of households is expected to increase by 2%, the same rate as population growth. The median household income is projected to rise by over $10,000, to $72,134, an increase of 18%, over the next five years.
The Albany MSA’s population is comprised of a higher percentage of 20-24 year olds when compared to the rest of New York State or the nation. Figure 1 also shows that the MSA has a slightly higher percentage of 50-64 year olds than the other geographies. However, the MSA lacks 30-44 year olds in comparison to New York and the U.S. When looking specifically at the MSA over the next ten years, the green line in Figure 2 shows that the region is projected to lose the large population of 20-24 year olds that it currently retains, while it will gain people in the cohort of 30-34 years old. The population will age significantly, gaining individuals ages 60-84 years old.
The Capital District Regional Planning Commission (CDRPC) recently acknowledged that the region is losing the Baby Boomer and Millennial populations—key demographics driving the housing market trends mentioned last week—to other locations. While the Capital Region cannot compete with those looking for warmer climates—but really, who can blame them for escaping −20° weather?—the CDRPC also notes that young professionals are leaving the area for places that offer a variety of amenities that contribute to a higher overall quality of life.2 This drain of Millennials is a concern for the business community according to Rocco Ferraro, the director of the CDRPC. It is true that workforce and business development is highly dependent on young workers, especially since the Millennial generation officially began to comprise the largest portion of the American workforce in early 2015. There are approximately 53.5 million millennials in the workforce and 44 million Baby Boomers. 3
While the relocation of Millennials is a concern for those in the planning and business community, CDRPC reported in their May/June 2015 newsletter that construction of multi-family units are on the rise in the Capital Region, mainly due to Millennial demand. The organization also found that over the last four years, permits for multi-family structures have comprised an average of 47% of the total permits issued.4 This “unprecedented” focus on multi-family units supports the national trends reported last week, and reinforces that the Capital Region real estate market has been driven by the generation aged 18-34 years old.
In terms of income, the Albany MSA outperforms New York State and the United States. New York State’s median income is nearly $3,000 less than the Capital Region’s, while the United States median income lags behind by just over $8,000. From Figure 4, we can see that the Albany-Schenectady-Troy MSA has a significantly higher portion of the population that earns between $100,000 and $149,000, when compared to New York State and the U.S. as a whole. Across all three geographies, the income bracket that earns $50,000-$74,999 is the largest cohort. Just less than 10% of the MSA's population earns $15,000 or less, while the same cohort represents 13% of New York State’s population and 12.8% of the United States overall population. Due to the relatively high incomes in the Albany MSA, the market for higher end condo or apartment units may be the most lucrative for developers, taking advantage of market demand.
After examining this data, it is clear that the local housing market and the demographic makeup of the Albany MSA reflect aspects of major national trends. While there are certainly aspects of the Capital Region that make it unique and desirable, the future of the area will be partially dependent on the success of integrating major generational demands into the housing market and business community.
For more demographic information and data on the Capital Region, check out http://cdrpc.org/.
Cover image courtesy of Ola Moller with The Noun Project.