| raphics and population trends influence almost every | | | | On the other hand, an entrepreneur looking to set up |
| decision in modern life, from business planning to | | | | a new hardware store, should look for an area |
| healthcare provisions, from education needs to | | | | underserved by the competition or where new |
| fashion and style. Age, ethnicity, gender, income, | | | | residential developments will be opening up. Hardware |
| mobility, employment, geography and other | | | | shoppers can compare brands of similar tools within |
| demographic factors determine the shape of our | | | | the same store, so ease of access takes on a |
| society. | | | | greater importance. |
| Real estate is no less affected by the ebbs and | | | | On the topic of ease-of-access, road traffic patterns |
| flows of demographic trends, particularly income, | | | | can also make or break an investment, especially |
| aging, family situations and employment. Consider a | | | | near busy intersections in competitive markets. The |
| real estate broker, whose livelihood depends on | | | | demographics of traffic can add to the complexity of |
| people changing homes. Economic mobility is a key | | | | making a commercial real estate investment. |
| determinant in the future of his business, as is the | | | | Understanding where to invest in retail properties is |
| economic health of the region. | | | | one of the main reasons that demographic mapping is |
| "I look to see how fast the economy is growing, and | | | | such a popular service, Wendy Cobrda explains. "To |
| how many jobs are likely to be created as a result, | | | | visually see the movement of people and their |
| to determine the resources my business will need | | | | spending dollars helps businesses 'see' where they |
| over the next five years," says Terry Denoux, a | | | | should open their next store." |
| Bend, Oregon, real estate broker. ( ) | | | | Demographic data plays a role in vacation rental real |
| Development planning relies even more on | | | | estate, too. "Do you buy vacation rental properties, |
| demographic data to determine priorities. The | | | | or do you sell the ones you have now?" asks Steve |
| average age of the population is a major factor in | | | | Curtis, owner of , a website listing vacation rental |
| the type of housing that will be required over the | | | | properties in Florida. "Well, that depends on how |
| next couple decades. | | | | much disposable income people have for vacations |
| "A young population in an area will require more single | | | | and, more importantly, on the age of the population. |
| family homes with multiple bedrooms and plenty of | | | | A younger person is more likely to backpack through |
| space for children to run," explains Wendy Cobrda of | | | | Europe, and stay at a hostel. An older person in more |
| Catosphere, a demographic data reporting company ( | | | | interested in comfort and privacy, which is what |
| ). "On the other hand, an aging population will need | | | | vacation rental properties offer." |
| more hospitals, more medical clinics, more housing | | | | It also depends on where populations are growing |
| that requires minimal maintenance." | | | | more, as well as where the affluence is growing. If |
| For investors, the stakes are just as high. Investing in | | | | an economic boom is happening in England and |
| commercial real estate, for example requires the | | | | France, but not in the USA and Canada, a vacation |
| ability to forecast where there will be a growing | | | | rental in Spain might prove more useful than on the |
| population, and/or where the population's average | | | | Gulf Coast of Texas. |
| income will be increasing. | | | | "Business planning is just a shot in the dark without |
| In fact, commercial property investment requires a | | | | solid market data," explains Ms. Cobrda. "Demographic |
| deeper understanding of demographic data; it is not | | | | data reports and maps help businesses project |
| just the population trends that need to be | | | | market activity into the future, helping to avoid such |
| considered, but the demographics of the competition. | | | | catastrophes as building stores with no customers or |
| And even those cannot follow a set formula. | | | | storing a few million dollars of inventory that nobody |
| For instance, an entrepreneur looking to set up a | | | | wants." |
| new car dealership needs to consider where | | | | Given the high stakes of real estate investment, |
| established dealerships are located and set up shop | | | | whether in residential, commercial or vacation rental |
| nearby. Car buyers wanting to compare similar | | | | properties, demographic data reports and market |
| models need to visit several dealerships, so they | | | | segmentation data are even more important. |
| need to be close to one another. | | | | |