Denver Makes Top 20 List of ‘US Superstar Cities’

The status can be attributed to a strong employment base of well-educated, in-demand workers

As U.S. superstar cities thrive, the weaker ones get left behind.  In many ways the country has seemingly recovered from a 2007 to 2009 recession. But, a Reuters analysis of federal data shows just how unevenly the spoils of growth have been divided.   Some cities have thrived while others continue to languish.  What is causing the huge change in fortunes among cities?  Why is this so important for real estate?

What does the data say?

In a ranking of 378 metropolitan areas by how their share of national employment changed from 2010 to 2017, 40% of the new jobs generated during that time went to the top 20 places, along with a similar share of the additional wages. Those cities represent only about a quarter of the country’s population and are concentrated in the fast-growing southern and coastal states. None were in the northeast, and only two were in the “rust belt” interior – Grand Rapids, Michigan, and a rebounding Detroit.

The drop from there is steep. The next set of 20 cities captured about 10% of the jobs created from 2010 through 2017, close to their roughly 7.5% share of the population. At the bottom, 251 cities, many spread across the heartland and in the industrial northeast, lost job share.

In the top 20 are cities like Denver, Atlanta, Nashville, Seattle, Portland, and more. (See the map below.)

What 3 traits do the superstar cities have in common?

“Every city has its unique narrative as to why it got to where it got,” says Raphael Bostic, Atlanta Federal Reserve Bank president. “I don’t think there is a general formula that if you hit each point at a certain level you guarantee an outcome.”  Although there is no magic formula to recreate the success of the top 20 cities, they each have three common denominators:

  1. Well educated workforce: the top 20 cities have a higher concentration of well-educated knowledge workers
  2. Concentration of companies in a single industry: Companies, like people seem to gravitate to certain cities. For example, in Denver the outdoor industry has a large presence, with the North Face and countless other outdoor oriented companies now headquartered here.  Atlanta, on the other hand, has become world renowned for its cutting edge medical. 
  3. Younger workforce attracted to the area: The same top 20 cities are also a magnet for younger well-educated workers.  Bloomberg did an analysis of the top destinations for millennials, each of these cities is also on the top 20 list from Reuters.

As the Atlanta Fed Chairman observed, it is difficult to come up with a way to recreate the success of the top twenty cities, but the top 20 cities should continue to thrive as the three items above continue the feedback cycle attracting more companies and more young, well-educated workers.

What does this mean for real estate?

The implications on real estate are profound.  As people, companies and ultimately money continue to flow to the top twenty cities, these areas will be the leaders in real estate.  This is especially important today.  We are currently at an interesting point in the market.  Many have mentioned that we are at or very near a peak in this real estate cycle. Buying now is considerably riskier than earlier in the cycle so it is critical that you are investing in places that can weather the impending storm.


In the last real estate cycle, we saw for the most part that the top twenty cities declined less and came back quicker and stronger than other areas.  This was due to a strong employment base of well-educated, in-demand workers.  Don’t get me wrong, some cities in the top 20 will do considerably better than others in the next downturn, but overall the top 20 cities should outperform other areas when the market cycles again.  These same top 20 cities will continue to thrive into the future and are long term good real estate investments.

Categories: Economy/Politics