You

“… it is necessary to invest time to personally visit and evaluate each one—there are many qualitative factors affecting your final decision that can’t be wrapped up in neat columns of data.”

Is This The Right Investment for You?
On the other hand, if real estate prices have been growing for a long period of time, there is a risk that prices could peak and consolidate for a period of time.”

 

An excerpt from Book Five in “The Knowledge Path Series” dedicated to helping you find the place of your dreams in the Sierra Mountain resorts.

Part One in a 4-Part Series.

Part Two: Taking Calculated Risks

What about you?

It’s time to clarify your own priorities.

Is This Lifestyle Right for You?

There are not shortages of best places lists, but what is the best fit for you personally?

  • To what type of place do you want to relocate?
  • What type of boomtown would be a wise investment? 

The challenge and the opportunity lying before you falls into two parts.

First, use quantitative data to research potential towns that interest you for your own bucket list.

Second, Harry Dent says

it is necessary to invest time to personally visit and evaluate each one—there are many qualitative factors affecting your final decision that can’t be wrapped up in neat columns of data or expressed in a terse written description.

Is there a threshold below which or above which you should look for?

For the first, Dent cautions you as you consider towns with fewer citizens.

As a general rule, you will want to invest in a small town only when it has a minimum population of 3,000; an even safer bet is 5,000 people. 

If the town has between 3,000 and 5,000 people, make sure that there are solid plans for growth and that it offers some qualitative advantages over other areas before investing in it. 

Too Far Away To Appreciate

Another rule of thumb.

The growing towns following their development strategies often take off after reaching a population of 20,000.

The next threshold Dent identified was 50,000.

The critical mass for many new growth cities (or formerly small towns) making the transition to a growth city, is often around 50,000.

But, that’s not all.

At each of those minimum population thresholds you will also want to find out if their continuing growth trend is growing or, better yet, accelerating.

This is a strong indicator that real estate is appreciating, not depreciating, and confirms that you have selected a town that other investors find attractive as well. 

Absolute population growth or even population growth as a percentage can be misleading, though.

A better measure is relative growth calculated over the last 10 years.

How does it compare to the rest of the country, state or region in which the town is located.

To calculate the relative growth, simply divide the town’s population growth for each year by the population growth of the country, state or county for that same year, and then plot the figure on a graph. 

Before Google and Wikipedia, you’d have to spend a tremendous amount of time at the library sorting through statistics from the U.S. Census Bureau.

And, then you’d have to visit or subscribe to reports from state and local agencies, and from demographic marketing companies.

Now most of that information exists online at two or three sources.

For future projections, you might have to dig a little.

I’ve grown to depend on city-data.com

Mobile Analysis While You Enjoy Your Visit

By collecting and analyzing data from numerous sources, we’re able to create detailed, informative profiles of all cities in the United States. From crime rates to weather patterns, you can find the data you’re looking for on City-Data.com.

For a snapshot, Wikipedia usually provides the top-level statistics, as it does for Mammoth Lakes.

As of the 2010 United States Census, the population was 8,234, reflecting an increase of 1,141 from the 7,093 counted in the 2000 Census.

And, if Mammoth makes the first cut consult Wikipedia for a little more detailed data. 

In this case what the 2010 Census revealed.

The population density was 325.4 people per square mile (125.6/km²). The racial makeup of Mammoth Lakes was 6,643 (80.7%) White, 29 (0.4%) African-American, 49 (0.6%) Native American, 128 (1.6%) Asian, 5 (0.1%) Pacific Islander, 1,151 (14.0%) from other races, and 229 (2.8%) from two or more races. Hispanic or Latino of any race were 2,772 persons (33.7%).

But, if projected population data are available, plot future years as well.

Let’s say you’ve done you homework researching your bucket list.

And you discover that the town has grown in the past, but it is not growing faster than the surrounding regional area.

Red flag.

While not always included in other Wikipedia’s pages, for Mammoth Lakes a sidebar tracks population growth from each Census beginning in 1880 (473) through 2010 (8234) or an increase of 16.1% from 2000.

Wikipedia’s sources project for last year in 2015 a drop of 3.5% from 2010 to 7946 residents.

It is not a genuine growth town.

In all categories of boomtowns you’re considering, with the exception of areas that appeal to affluent retirees, look for growth in job markets and a rising level of income.  

Without the growth there simply isn’t enough money circulating to boost  real estate prices.

  • Are there extenuating circumstances?
  • An economic downturn that all resorts suffered?
  • Does that signal a buying or investment opportunity?
Center of Mammoth Lakes Development

Dent says

Even in a growing resort area with a large percentage of retired homeowners, you would expect to see job and income growth for the people who provide goods and services to the town.

Dent recommended engaging demographic marketing firms for economic and job data.

In addition to providing past data, they can give you good estimates for 25 years into the future, based on demographic factors and business and employment trends. 

Today that once expensive knowledge can be found online.

Specific to Mammoth Lakes

As more powerful “Big Data” cloud technologies aggregate it for you.

No matter what the source, you should review data for an entire county as a reliable way to evaluate a single town.

Mammoth Lakes, California Zip Code 93546

“But, only when that town comprises most of the county’s population,” Dent says. 

“Or, such data also can help you easily identify high growth counties in which to look further for high growth towns.”

Searching on City-Data.com for “Mammoth Lakes” and by Mammoth’s zip code “93546” yield slightly different, but useful data sets.

I’m not sure why, but you should consider both when you are serious.

And, another search of “Mono County” shows you all the growth comparison calculations you’ll need plus the distance to nearby towns and nearby zip codes to explore.

Details About Mono County from City Data

All within minutes.

If you find growth in the town’s real estate prices, Dent says treat it as a simple positive indicator.

“Strong appreciation indicates that other people think this town is a good investment, too. 

On the other hand, if real estate prices have been growing for a long period of time, there is a risk that prices could peak and consolidate for a period of time.”

Steps:

21) Spend the time to find the best place to live and invest. It will be worth your while. The great thing about living where others spend their vacation is the year round quality-of-life. 

22) Selectively evaluate the best quality-of-life communities to live in and weigh the tradeoffs of risk and rewards for accruing real estate appreciation along a progression of rural and small towns that meet what your pocket books can afford.

Neighborhoods

“It’s this last aspect that brought a taxing disruption to a “New West” resort community in one of the Rocky Mountain states on our bucket list.”

Montana’s Glacier National Park
Keys for Unlocking Your New Home: BOF, Bucket Lists, Life Stages and Lifestyle Segments

An excerpt from Book Three in “The Knowledge Path Series” dedicated to helping you find the place of your dreams.

While Claritas / Nielsen Segmentation may redefine their lifestyle descriptions and change the names of their trend-setting profiles, neighborhoods themselves change only slowly over time.

All neighborhoods evolve slowly through life stages over years and decades:

  • Formation,
  • Early Growth,
  • Late Growth,
  • Maturity,
  • Decline and
  • Renewal.

Each neighborhood has its own “brand” – an image and an attraction – for people of the same type.

Colorful Neighborhood “Brand”

Neighbors feel the attraction because the neighborhood fulfills their fundamental need to belong.

Picture your current or most recent street.

Neighborhood Street in Winter

How quickly can you describe your neighborhood composition?

“Well, we have mostly families with kids, except the older kids have graduated.

Most left home for college, but then returned when they couldn’t find work.”

If you’re like me, it’s not something you notice or even think about.

If given a list to choose from, you’d have no problem at all.

You’d be able to rattle off:

  • Their social rank — made up of income, employment level and education level achieved.
  • And the degree of mobility (length of time living in your neighborhood).
  • The mix of ages, genders and living arrangement household composition.
  • And, their ethnicity (race, foreign birth, ancestry, and language)
Densely Populated Urban Neighborhoods

Visitors to your neighborhood can easily observe:

  • The degree of urbanization (variations in urban, suburban, and rural populations);
  • The density (how much room between housing units you see); and
  • Housing types (own, rent, value, age, number of housing units).

So, if you were an outsider about to move into a another neighborhood on your bucket list,

  • How well do you feel you would fit in?
  • Will established neighbors share your same values?
  • How likely will they treat a stranger like you with open arms?
Birds-of-a-Feather or Chicken Wars?

Consider those neighbors who have lived decades in your potentially new community – like those in Whitefish, Montana or Bishop, California.

When new people move in, if they are decidedly different from the birds-of-a-feather (chicken or otherwise) tensions mount.

If strangers replace former neighbors, the local’s sense of belonging to there long standing,  tried-and-true community can be dramatically challenged.

And they don’t like it.

Why?

In general, when people move in, they tend to stay.

Just like those who have lived there for generations.

Fight or Flight.

If locals hate the changes, but can’t afford to move on – they may lack the skill sets to find work or work in professions that are in decline – they feel stuck.

So you get chicken wars, among other things.

We’ve even identified a subset of our High Country Eagle lifestyles – Rustic Eagles – who live in the least densely populated rural areas.

Their communities represent our nation’s most isolated towns and rural villages.

Sparsely Populated High Country Eagle Neighborhoods

You’d recognize Rustic Eagles after hanging out a while in their pristine, remote communities.

They have relatively modest incomes (a median household income of just over $30,000 in 2011) and low education levels.

Most of their neighbors live in aging homes and are employed in local blue-collar occupations.

It shouldn’t come as a any shock if we told you they spend their leisure time hunting and fishing, enjoying church socials, swapping war stories at the veterans club, dancing to country music and racing cars.

Long-time Country Residents

You’d also notice two distinct age groups – 30-44  year olds and senior citizens 65 years old and older.

So, they’re a mix of young singles and seniors living in unmarried and family households.

What they most likely notice is a trend – an exodus as neighbor after neighbor migrates to cities and greener pastures.

Attractive Neighborhood Features

Often kids who have grown up in the small town can’t wait to escape to the big city after high school graduation.

If not for economic reasons then for life events.

And, if a community finds itself on an early growth path, chances are the real estate values have priced the 20-somethings out of the local market.

Take my neighborhood – original residents moved in at the same time, so any change is very noticeable.

Graduating Neighborhood Kids

We know when people are:

  • Leaving the nest,
  • Graduating from college,
  • Getting married,
  • Having children,
  • Being promoted,
  • Emptying the nest, and
  • Retiring.
New Family Formations

When people move because of a positive life event, they usually find a neighborhood that is like the one they just left or better – a step up in social status.

Normally, the next set of birds set up their nest in the neighborhood home just vacated.

Moving Day

So, as you research and then visit resort towns on your bucket list keep a few things in mind.

Neighborhoods, like all things in nature, evolve through stages.

Characteristics that define a neighborhood change slowly.

Slowly Evolving Neighborhoods

The stability of a neighborhood comes from its fixed features:

  • Location,
  • Housing,
  • Transportation,
  • Schools,
  • Places of worship, and
  • Employment.

“Birds of a Feather” flock together.

They attract each other.

Social Ties and Deep Friendships
  • People with similar cultural backgrounds, needs, and perspectives naturally gravitate toward each other.
  • People choose to live in neighborhoods that offer affordable advantages and compatible lifestyles.
  • Self-organization and self-perpetuation reinforce the stable nature of neighborhoods

With stability comes predictability.

Variety of Neighborhoods Attract Different Lifestyles

And, with a little research and intelligence gathering you can whittle a long list of potential bucket list down to fewer, higher probability best fit towns.

How can you take advantage of the predictable nature of neighborhoods?

Several marketing and demographic firms (we’ve stuck with Claritas / Nielsen PRIZM Segmentation over the years) offer statistics on specific clusters of neighborhoods.

They group segments into their similar demographic and behavioral characteristics.

If you know the area’s zip code you can discover the lifestyles of residents living in the community.

And, you can compare your profile with theirs to estimate your degree of fit.

On your visits look for any newer developments that may trigger changes in neighborhood patterns.

Newer Construction

New construction in or around the neighborhood.

Major regional economic adjustments.

Transition from households with children to ones that are empty nests.

Rezoning, and dramatically rising/falling land values.

It’s this last aspect that brought a taxing disruption to a “New West” resort community in one of the Rocky Mountain states on our bucket list.

More to follow.

Steps:

(22) Selectively evaluate the best quality-of-life communities to live in and weigh the tradeoffs of risk and rewards for accruing real estate appreciation along a progression of rural and small towns that meet what your pocket books can afford.