During the past year, the US healthcare sector has been the one bright spot in the US economy. While the number of all other jobs increased just 1 percent in 2024 (and jobs in business services – usually one of the strongest sectors – didn’t increase at all), the number of jobs in healthcare grew 4 percent. It now provides one in every ten jobs.

The growth of the sector over the past 30 years has been driven by better medical knowledge, better technology, an aging population and greater concern for personal and public health. These trends have also resulted in higher costs. Healthcare now takes one out of every six consumer dollars.

An industry of this size has a big effect on local real estate markets, especially because the trends that have driven its success are very likely to continue.

To a large extent we can expect the industry to do best in local markets where the population (its customer base) is growing. But other factors can be important, such as the size of the older population (which uses more healthcare), the type of jobs involved (doctors make more money than aides in nursing homes), and the spoke-and-wheel structure of the industry itself (where local facilities often funnel care to hospitals in regional centers).

Our table, with data provided by Vertical IQ, shows 15 markets with a big increase in healthcare jobs in 2024, the increase of population in the past two years, and the percent of the population that’s 65 or older.

It’s clear that strong population growth has spurred healthcare jobs in Boise, Durham, Phoenix and Provo (which is also the regional medical center), while a large older population accounts for more healthcare in Allentown, New York, Rochester and Syracuse, despite poor population growth.

These are markets where we can expect good support for real estate values this year and beyond. Much of that support will be for rentals and lower-end owner properties because the average annual pay for healthcare jobs is $63,000. But it’s important to find out which parts of the local healthcare industry are expanding because the annual pay is $123,00 at doctors offices, $93,000 at hospitals but only $40,000 at home health care services.

There’s healthcare in every local market. Knowing if it’s producing lots of new jobs, and why, will help investors make better decisions about real estate.