Understanding Market Strength Beyond Population Growth
When assessing a market for mobile home park investments, many investors turn to BestPlaces.net and similar resources to examine population growth statistics. A city with a rising population might seem like a sure bet, but that’s not always the case. Take Austin, Texas, which has grown exponentially over the years. Meanwhile, Charleston, South Carolina, known for its strong mobile home park market, doesn’t exhibit the same growth trajectory. Yet, despite the contrast, both cities maintain substantial housing demand.
So, how can an area with slower or even negative population growth still be a solid investment? The answer lies in vacant housing rates.
Why Vacancy Rates Matter More Than Population Growth
A market’s true health—especially in housing—relies more on vacancy rates than raw population numbers. Currently, the U.S. average vacancy rate for housing nationwide is around 11%. In general, a healthy market will have vacancy rates at or below this national benchmark.
Many areas with stagnant or even declining population figures still show low vacancy rates, signaling strong demand for affordable housing. On the other hand, high population growth doesn’t necessarily mean strong investment potential. Las Vegas, for example, continues to attract new residents, yet its vacancy rate has climbed substantially, surpassing the national average and indicating a potential oversupply of housing.
The takeaway? Population trends and housing demand don’t always align. It’s essential to analyze housing vacancy rates to get an accurate read on a market’s true potential.
Not All Growth is Equal
In the late 19th century, New York’s population grew twice as fast as St. Louis, largely due to its significantly larger household sizes. While that mattered for schools and hospitals, it wasn’t as critical for real estate investors.
Fast-forward to today, and the same principle applies. A surge in population doesn’t always translate to quality demand. Rapid growth can be fueled by low-income migration, which may not support stable, long-term tenancy. On the flip side, high-end areas like Bel Air, California, might experience declining population figures, yet still remain premium real estate markets.
When Negative Growth Becomes a Red Flag
That said, some cases of negative population growth should raise concerns. If an area is experiencing double-digit declines, it often signals economic distress. Detroit, for example, faced years of rapid population decline due to major employment losses, leading to a collapsing housing market.
If you encounter a market with substantial population loss, further investigation is required. Reach out to the local Chamber of Commerce, examine the top employers, and analyze broader economic indicators. A negative growth number isn’t an automatic deal-breaker, but it is a reason to dig deeper before making a decision.
One big problem: areas with a heavy concentration of vacation homes
No place gets more punished by vacant housing stats that areas where people own second homes. Cities like Traverse City, Michigan – which is a fabulous mobile home park market – shows unfairly high housing vacancy rates because the way those numbers are calculated show that those housing units are only 50% occupied on a year-round basis. That’s unfair as those homes are fully occupied financially, and those who typically live in mobile home parks live there full-time, not as hobbyists.
The Best Indicator? A Test Ad
Ultimately, the most reliable way to measure demand in a market isn’t population data—it’s a test ad. Running a simple classified ad for a mobile home lot and measuring the response rate provides a clear, real-world indicator of demand. Markets where test ads generate significant interest tend to perform well for investors. Conversely, weak ad responses often signal problematic markets, regardless of what the statistics suggest.
Conclusion
Relying solely on population growth when evaluating a mobile home park investment is a mistake. While it can offer some insight, vacancy rates and actual demand are far more telling indicators of a market’s strength. Instead of dismissing a location with low or negative growth, consider the full picture—including housing availability, economic stability, and test ad results—before making a decision. A balanced approach will help identify markets with real, sustainable demand, rather than just surface-level growth statistics.