Three distinct migration waves since 1875 have shifted our population from rural areas to the cities, from the cities to the suburbs, and now, at the beginning of a new century, from the suburbs to beautiful, small communities that are quickly becoming the new American boomtowns.

Click chart for larger view

“The new American boomtowns are not isolated backwaters. Most offer all the conveniences of a big city combined with the superior quality of life typical in small towns.”

“Resort property is the best investment for this decade.”

In the next decade, investors can profit from the most recent migration wave by choosing to buy in one of the many areas that offer both a superior quality of life and a superior opportunity for profit.

These new boomtowns are not isolated backwaters. Instead, they are fully “wired” to take advantage of the network revolution in business practices. Residents can live and work in their own community, only journeying into nearby cities on occasion not every day.The best of these boomtowns offer abundant open space, a village-like atmosphere to maximize quality of life and pleasant human interaction, and shared recreational, educational and cultural
facilities.

While you are thinking about the right boomtown for you, keep in mind the key trends driving the current real estate market. The three questions below can guide you in choosing a place to live, vacation or retire that is ideal for your lifestyle.

• Does the area offer premier communication technologies that will permit people to take advantage of our increasingly networked society and telecommute to work?
• Is the area in one of the two hot segments of the real estate market right now, resort or upscale urban areas? Vacation home buyers will drive up values in the one. Echo baby boomers needing apartments and office space as well as baby boomers buying trade-up homes will drive
  up values in the other. In fact, the only weak segment is starter homes.
• Is there a broad geographic migration towards the area that supports its growth combined with a scarcity of land available for development?

The first new growth area in real estate that HS Dent has identified is resort property. These are great buys now because its value will rise rapidly in the next decade due to the confluence of two powerful trends, migration to small towns and the peak in baby boom spending on vacation homes. Aspen is perhaps the classic example of a high-profile resort town that was a brilliant investment in the 1950s and 1960s. How to find the next Aspen? Start by reading specialty
travel magazines like Conde Nast Traveler or Travel and Leisure. It’s their job to spot the next trendy resort area. If a resort area doesn’t suit your taste, there are other kinds of boomtowns that might, including

• Small college and university towns, which offer a young and highly-skilled labor pool, a liberal atmosphere and an array of arts and educational options.
• Classic small towns like Ukiah, CA or Pierre, SD, which often have a more old-fashioned look and feel.
• Revitalized factory towns such as Farmington, NM and Medford OR that are being refitted to serve new economic needs.
• Exurbs, the geographic area that extends beyond the suburbs of our largest cities, such as Bellingham, Anacortes and Mt. Vernon outside of Seattle.
• Suburban villages, quaint and scenic communities with a small-town feel, such as Walnut Creek and Half Moon Bay, outside of San Francisco.
• Emerging new cities such as Boise, ID and Austin, TX.
• Large-growth cities, especially those with fashionable urban enclaves, such as the recent development in San Francisco’s South of Market Area (SOMA)

Note: We originally wrote these comments in the late 1990s, and time has proven them largely correct. The real estate boom of the mid-2000s did take prices in some resort areas to unsustainable levels. A fine example is Miami, where prices exploded despite a massive flood of new construction. Some of these areas will clearly take time to recover. The upside of the boom and subsequent bust is that many people will be able to afford resort properties that they might ordinarily not have been able to afford. In the meantime, we view exurban cities and college towns as the most likely areas to prosper in the years ahead.