Remote work, skyrocketing rents in some cities, and the desire for more amenities are all driving Americans to move, but the areas with the most new renters, according to a new report is changing. Rent.com Migration Report Towards the first quarter of 2023.
Back in January, we report Renters are interested in the South and Midwest because of the relatively affordable housing availability in many cities in these areas compared to the West and Northeast, he said. But as more people flocked to these areas to escape the more expensive areas, rents rose.
for example, Miami is still cheaper than New YorkHigh housing costs in Florida due to an influx of new residents have left the Sunshine State in a situation where: highest inflation rate domestic. As a result, even with more immigrants from New York and California, some residents may be forced out of the state.
Similar trends may be occurring in Georgia and Texas, based on migration data from those regions. Now it seems that more and more residents are leaving rather than entering the South.
Rent.com’s Q1 2023 migration report is based on January, February and March data. Researchers measured inbound and outbound leads based on user interest in the property and combined those numbers to get lead delta by geographic area. A negative lead delta indicates that more people are interested in leaving the area than moving into it.
The South lead delta fell to -2.07% in the first quarter. It was observed that the regional lead delta was the only negative. But while the entire Southern region is declining in popularity, many still seek to move to cities such as Knoxville, Tennessee and Augusta, Georgia. Notably, none of the metropolitan areas with the highest inbound lead delta were in the West, despite the increased interest in the region compared to previous quarters.
It’s important to note that there are myriad reasons people move, and trends change from quarter to quarter. But some cities, like Madison, Wisconsin, are reappearing on lists of inbound immigrants, while others, like Chicago, continue to rank high for outbound immigration.
While you shouldn’t base your real estate investment decisions solely on this data, it can be helpful to see where rental demand is highest when researching new markets. Let’s take a closer look at lead delta data for states and metropolitan areas.
Where are people coming from?
Outbound Migration by State
state | lead delta |
---|---|
maine | -57.65% |
Vermont | -53.58% |
west virginia | -36.57% |
Illinois | -29.68% |
Montana | -26.19% |
Those leaving Maine were interested in states such as New Jersey, Pennsylvania, Florida, Georgia, and Ohio, and renters leaving Vermont had similar interests with the addition of New York. West Virginia renters wanted to stay near neighboring states, while Illinois residents planned to stay in the Midwest.
Montana is the newest addition to the list of overseas immigrants. Rent rises rapidly over the past three years. State residents were most interested in moving to Arizona, followed by other parts of Montana, Colorado, Utah, New Mexico, and Texas.
Outbound migration by subway
Metro | lead delta |
---|---|
St. Louis, Missouri | -30.05% |
Atlanta | -27.53% |
Chicago | -26.39% |
Denver | -25.55% |
Charlotte, North Carolina | -24.04% |
Those considering leaving St. Louis were interested in moving to other parts of Missouri or leaving the state for Minneapolis-St. Paul, Indianapolis, Dallas – Fort Worth. Atlanta renters preferred to stay in Georgia and other Southern states.
Chicago renters also sought apartments in other Midwestern cities, including Milwaukee and Minneapolis-St. Paul, or a southern city such as Nashville, Tennessee. Birmingham, Alabama. and Memphis, Tennessee. The Denver renter wanted to go to other western metros like Salt Lake City and Colorado Springs Pueblo, as well as Midwestern cities like Detroit and Kansas City. And Charlotte residents wanted to remain in Carolina.
where are people going?
Inbound Migration by State
state | lead delta |
---|---|
new jersey | 38.51% |
Delaware | 34.82% |
north dakota | 32.67% |
Louisiana | 25.48% |
rhode island | 24.30% |
New Jersey is a hotspot for movers, drawing residents not only from New York and Pennsylvania, but also from expensive Southern states like Florida and Georgia. Interest in Delaware began in neighboring states such as Virginia, Maryland, Ohio, and Pennsylvania, as well as in the Midwest. And the North Dakota leads were coming from as far afield as Illinois, Texas, New York and California. Louisiana and Rhode Island each attracted interest from other states in their respective regions.
Inbound migration using the subway
Metro | lead delta |
---|---|
Augusta, Georgia | 38.46% |
Harrisburg-Lancaster-Lebanon-York, Pennsylvania | 37.63% |
Madison, Wisconsin | 37.54% |
Waco – Temple – Bryan, TX | 31.88% |
Knoxville, Tennessee | 29.98% |
Most of the desire to move to Augusta came from Atlanta.Compared to Atlanta, Augusta 27.6% cheaper Less density, more space to spread out, and still plenty of amenities to enjoy. The community of Harrison Lancaster Lebanon York received the most interest from renters in downtown areas like Philadelphia. Washington DC; Baltimore; and New York.
Madison, Wisconsin finished 11th. US news and world reports The ranking of the best places to live drew residents from Chicago, Charlotte, Denver and Atlanta. Waco Temple Bryan drew renters primarily from within his own area, but Knoxville had interest from other Southern communities and Chicago.
data meaning
Rent.com’s immigration report goes far ahead of Census population data in capturing immigration trends, as it shows renters are interested in emigrating before they move. However, this has its limits. For example, signing an apartment in Augusta from a renter currently living in Atlanta is not the same as moving from Atlanta to Augusta. Still, if a city’s outbound leads outstrip inbound leads, it could be an early indicator of waning housing demand in the area.
In attractive yet inexpensive cities, rents tend to rise as more people move there, and housing values also rise as new residents come to the area. Investors can try to get ahead of this shift by buying in low-cost neighborhoods that could spill over from nearby subways as population grows. Looking at migration trends, people still tend to migrate to nearby desirable areas where amenities are available, although cross-border migration is not uncommon in some popular cities.
Augusta, Georgia and Madison, Wisconsin are good examples.Both ranked in the top 100 best place to live To US news and world reports Because of their high quality of life and low cost of living. These are logical destinations for people in big cities like Atlanta and Chicago, and Madison has residents from far and wide. Moreover, median house prices in both cities are below the national median.
Keep in mind that lead delta is just one data point to consider when evaluating a market. Also, the rent-to-price ratio and Rent-to-income ratio— It’s important to find areas that can generate positive cash flow, where rents still have room to grow based on average income in the area. In addition, find areas with strong job markets with low unemployment rates, historically rising real estate values, and manageable real estate costs and taxes given expected rental income.
Conclusion
Compared to previous immigration reports, interest in the Northeast and West has increased, while interest in the South and Midwest has decreased slightly. However, some subways in the South and Midwest are still of interest to renters. And people continue to move away from high-cost areas.
While this data is just a snapshot of initial demand based on prospective apartment buyers, analyzing migration trends can help investors infer the next most popular cities for renters. Always consider other available data before investing in new markets.
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Note by BiggerPockets: These are opinions written by the authors and do not necessarily represent the opinions of BiggerPockets.