Downtown apartment development has been all the rage, but new data is showing that the real action is in the suburbs. From the research pages of Units Magazine:
From 2006 through 2016, net migration to the suburbs averaged 2.2 million persons per year, while principal cities lost an average of 2 million people per year.
What do recent movers to these “outlying” areas look like? In 2016, about 49 percent were renters, up from 43 percent in 2006, 31 percent were married with a spouse present, and nearly a quarter were in the 30-44-year-old age group, the largest age cohort. Nineteen percent had some college or a two-year degree, and equal numbers of them worked in the education/healthcare fields as did the retail/wholesale trade sectors. With 2015 median incomes largely falling in the $20,000-$40,000 range, affordability was clearly a key driver in their moves…
The turning point for the suburbs was 2013/2014 when rent growth and occupancies began outpacing growth in urban areas, a trend which continues today.
While rents are growing in both urban and suburban markets, urban apartment renters pay a 35 percent premium to live in the center of it all. The gap has narrowed by more than $200 per unit since 2014 when urban rents cost $659 more. The influx of new supply in urban cores has hampered rent growth there, while demand for more affordable options in the suburbs has pushed up rents in those areas, some of which are flush with amenities and vibrancy. With more new supply coming to center cities, and vacancy rates flirting with four percent in the suburbs, expect the gap to narrow further in 2017.