Since the start of this century, the U.S. residential real estate market has changed in dramatic fashion. No longer can California and the New York/New England area lay claim to being the kings of residential real estate.
Perhaps by price those regions are still royalty, but the fact is – and the coronavirus laid this to bare – folks are increasingly exploring and willing to make homes in other areas. Of course, there are avenues for investing in this trend, including Megatel Homes.
Megatel is a Texas-based home builder with communities in that state and Oklahoma and more in the works in other parts of the U.S.
“Megatel Homes is one of the largest single-family home builders in the state of Texas. Founded in 2006, the co-founders of Megatel Homes brought a unique product to the market by offering the upgrades seen in their model homes built into the base price of their homes. Megatel Homes is differentiated by not being a base price plus builder,” according to the company.
Trends Are Friends to Megatel
As noted above, California and the Northeast are no longer linchpins of population growth. Far from it.
The 10 fastest growing states are, in order, Idaho, Arizona, Nevada, Utah, Texas, South Carolina, Florida, Washington, Delaware and Montana, according to World Population Review.
That's relevant to the Megatel investment thesis because four of the company's five communities are in Texas – Austin, Dallas/Fort Worth, Houston and San Antonio.
“Texas grew 1.29% from 2019 to 2020. Its current population is 29,360,759, a growth of 373,965 from 2019,” notes World Population Review. “This means that Texas's population grows by over 1,000 people per day. Texas has the fifth-highest birth rate in the U.S. of 13.2 births per 100,000 people. However, only 40% of its population growth is attributed to natural increases, while 60% is due to net migration. Recently, international migration has exceeded domestic migration, with an increase in migration from Asian countries, especially China and India.”
From the aforementioned list of states, Florida, Nevada, Texas and Washington don't levy income tax, confirming more people are looking for the alluring combination of low taxes and decent weather (excluding Washington).
“Megatel has favorable tailwinds on its side – that much is obvious,” says Douglas Blake, managing director – investment services at Kingswood U.S. “The population shifts that emerged in recent years aren't likely to abate. If anything, the moves to states such as Arizona, Florida and Texas are likely to continue on upward trends.”
More to Like with Megatel
As Blake points out, real estate is one of the best inflation-fighting asset classes available to advisors and clients and that's a consideration that cannot be overlooked in the current environment.
Additionally, Megatel is expanding. It's got new communities in the works in Colorado and Florida. As noted above Florida is one of the fastest-growing states in the U.S. Colorado isn't in the top 10, but its population is growing as highlighted by the fact that the state landed a new congressional seat following the 2020 census.
Bottom line: Real estate is like any other industry in that clients want to be where the growth is. Megatel makes accomplishing that objective easier.