Study: Renters Prefer Suburbs in Most Major Metros
The days of renting in the city and buying in the suburbs may have come to an end.
According to a recent study from national apartment locator service RentCafé, in 19 of America’s 20 largest metros, the suburbs are attracting more renters than urban neighborhoods.
Between 2011 and 2015, several metros — New York, Los Angeles, Houston, Philadelphia — experienced greater overall population growth in urban neighborhoods than in suburban ones. However, only Philadelphia saw a greater year-over-year percentage increase in the growth of renter households inside the city limits as opposed to outside of them
The difference in renter households that flocked to the suburbs over the city during that period was most pronounced in Riverside, Calif., which saw an additional 42,700 households move to the suburbs. Riverside was followed by Atlanta (37,200 households), Miami (29,800 households) and Chicago (20,600 households).
Cheaper rent remains the primary incentive behind the trend. Of the 20 metros surveyed, only St. Louis posted a higher average rent in its suburban areas than its urban neighborhoods. The differences in average rent between the suburbs and the city were smallest in Dallas, Phoenix, Houston and Denver.
The average amount of rent saved by moving to the suburbs in some of the more expensive metros were as follows: $1,600 per month in New York; $800 per month in Boston; $500 per month in Chicago; and $450 in San Francisco/Bay Area.
The shift to the suburbs may be the manifestation of demand catching up to supply in the rental market.
During the multifamily construction boom of 2011 to 2016, the supply of apartments increased by more than 10 percent every year, including a 50 percent increase from 2015 to 2016.
Meanwhile, the market posted an all-time high for national rent average — $1,213 per month — in 2016, indicating that equilibrium is not far off. In addition, occupancy for stabilized and completed properties rose to 96.1 percent in 2016, another record-high, according to the study.
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— Taylor Williams