The pandemic is reversing a long preference by renters for urban locations. Instead, apartment rentals are surging in suburban markets nationwide. Renters now in urban areas are showing a desire for larger spaces and they’re no longer tied down to a regular commute as work-from-home policies in many cases have been extended. All these factors have brought their hunt for an apartment out of city centers, The Wall Street Journal reports, as renters seek more room and outdoor space.
For example, searches in the suburban markets of Sacramento, Calif.; Norfolk, Va.; and the Inland Empire of Southern California, the area east of Los Angeles County, increased from 3.2% to 4.6% by the end of the third quarter compared with March, according to data from the CoStar Group Inc.
"They're markets that are close enough to cities like San Francisco, Los Angeles, and Washington, D.C., that allow people to be close enough to go into the office if they really need to, but far enough to save," John Affleck, CoStar's vice president in charge of market analytics, told The Wall Street Journal.
For decades, millennials and empty nesters have shown a desire to live in city centers to benefit from the activities and energy that often define urban areas. As a result, rents would increase in these locations. New apartment developments have sprung up, often rapidly.
But the greater affordability of suburban markets, mixed with offerings of more space, may prove a continued draw during and perhaps after the pandemic. For example, in downtown Houston, the rent for a two-bedroom apartment is about $2,600 to $2,700 per month. But 10 miles to the west, it’s $1,500, Ric Campo, chief executive of Camden Property Trust, told The Wall Street Journal.
However, suburban rents are rising as demand increases, housing analysts note. Also, there has been little new supply of suburban rentals because most recent development has centered on building higher-end units in urban markets.
Source: “Renters Flock to Suburbia, Upending Decadelong Urbanization Trend,” The Wall Street Journal (Oct. 13, 2020) [Log-in required.]
