Wealthy get healthy as ranks of urban rich swell
Number of high net worth individuals swells, as markets recover; good two years for Houston
As the price of oil goes, so go the fortunes of Houston’s wealthiest citizens.
When oil prices tanked toward the end of 2008, the number of high-net-worth individuals in Houston — those with more than $1 million in investible assets, fell by more than 21% to 68,400 people. That’s the biggest decline of any of the top 10 wealthiest U.S. metropolitan areas, according to a study of HNW investors by Capgemini Financial Services.
With oil back up and trending at around $100 per barrel, the number of HNW Houstonians surged back to 96,700 at the end of 2010 — the highest percentage growth over the last two years among all the metropolitan areas surveyed.
Houston isn’t alone. Virtually all of the wealthy populations of the country’s biggest urban centers have surpassed their pre-financial-crisis numbers. Hard-luck Detroit is the one exception. The number of HNW residents there increased 3.4% to 92,100 last year, but that’s still about 2,400 fewer such wealthy folks as in 2007. The Motor City was leapfrogged by Houston in the rankings.
The surging markets in stocks and commodities over the past two years underlie the recovery in the numbers of wealthy investors.
“An important contributor to the increase in HNWI population we saw in these areas was the continued rise in U.S. equity and commodity markets, which led to many investors’ seeing the value of their investments grow,” said William Sullivan, head of global market intelligence at Capgemini. “We saw many HNWIs — not just in these [metropolitan areas] but globally — taking on more calculated investment risks and shifting assets into what we consider more aggressive asset classes in a continued effort to recoup some of the losses they faced as a result of the financial crisis.”
New York houses the greatest number of high-net-worth investors in the country, with 720,000, up 7.9% from last year. Los Angeles is second with 256,500. (Click on the following link to see the percentage of HNWIs in the 10 largest cities in the U.S.)
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