Renters living in high-cost cities are looking at other metro areas where their money might go farther.
New data shared by real estate platform Zillow shows that out-of-state renters have set their sights on more affordable areas, particularly three large cities that aren’t usually at the top of lists for relocation.
According to Zillow, Chicago, Houston and Buffalo, New York, are three of the hottest markets in the country for people fleeing more expensive cities—the latter two being surprising additions.
“Out-of-town renters most often search for listings in established draws like Raleigh (North Carolina), Hartford (Connecticut) and New Orleans,” Zillow writes. “Buffalo and Houston, metros that rarely top a relocation wish list, are increasingly topping renters’ browser tabs.”
Read More: Chicago wants to build 15-minute express train from downtown to O’Hare
Zillow says a lot of information can be gleaned from rental data, which is often an indicator about where the overall housing market is moving.
“Renters make this shift visible before anyone else, because renting is how most people audition a city,” Zillow writes. “A lease is a low-commitment way to test a job, a climate or a cost of living before signing on to a mortgage, and for a growing number of households renting is the smarter financial call anyway.”
Zillow says when there’s an increase in the number of people from out of town browsing a city’s rentals, “a pipeline of future residents is usually forming.”
Raleigh, Hartford, New Orleans, Salt Lake City, and Nashville, Tennessee still top the list of “out-of-town rental interest,” but some surprising newcomers have reported major increases in rental interest.
Houston (+3.4), Buffalo (+4.2) and Chicago (+3.7) were the three biggest year-over-year increases for out-of-town rental interest, the data showed.
Renters are moving to underlooked cities to save money
Mischa Fisher, chief economist at Zillow, said the figures buck a trend that the company has been monitoring.
Over the last decade, people living in expensive coastal metro areas have opted to move to the Sun Belt region in hopes that their money will go further. Cities like Charlotte, Dallas, Austin and Nashville have seen lower rental prices, more housing being built, and more first-time home-buyers in recent years, Zillow has said previously.
But renters are apparently finding new alternatives in mid-sized cities that have “quietly turned into a bargain while everyone was looking south.”
Zillow describes Buffalo as a “long-overlooked” metro area that is near coastal cities; Houston can offer “big-city jobs and culture” without the big-city costs; and Chicago, despite being 15% higher than the other two, is still a bit of a bargain compared to New York City, Los Angeles or San Francisco.
“In my opinion, that’s why Chicago stands out,” says Fisher. “For those looking to move to a large city, it’s the most affordable.”
Read More: U.S., China lead record number of new hotel developments
Zillow data shows that the coastal cities with high cost-of-living still appear to be those that are losing residents in favor of more affordable options, but those who are moving are trying to stay nearby.
“The bulk of cross-metro searches happen between neighbors, with Washington, D.C. renters eyeing Baltimore and Los Angeles renters scanning Riverside,” Zillow writes. “The clearest long-distance exception is the New York-to-South pull, with New Yorkers making up sizable shares of rental views in Miami, Orlando, Tampa and even Raleigh.”
While Chicago, Houston and Buffalo are the hot markets right now for prospective moves, Fisher says anyone looking to make a move should do so quick before the rest of the market catches up.
“An affordability advantage never stays a secret for long,“ Fisher said. “The metros pulling outsized attention today are the ones where demand, and eventually rents, are about to firm up. For a renter eyeing Buffalo or Chicago, the window to get in ahead of the crowd is narrower than it looks.“
For the full report, click here.
For more stories like this, follow Rabble News on Instagram and Facebook.
