Migration out of expensive urban markets has been a signature characteristic of the pandemic—but new data shows that these migration patterns could be temporary. According to a renter migration report from Apartment List, 16.4% of renters looking to move to a new city prefer short-term leases, meaning a lease term less than six months. This a 40% increase in short-term lease searches from January of this year.
Short-term leases are more common among renters looking to move to a new city. In November, only 10.7% of inter-city movers were interested in short-term leases compared to 7.9% in January. The Apartment List report suggests renters are “testing the waters” before permanently moving to alternative and suburban markets. This could also suggest that renters are planning or willing to return to the urban core following the end of the pandemic.
Overall, cross-metro moves have increased nominally. From July to November, renter searches for apartments in a different metro accounted for 28.9% of total searches, up only slightly from 27.5% in January. This inconsequential increase in cross-metro apartment searches underscores the significance of increased interest in short-term leases.
Renters interested in short-term leases are primarily looking to move out of expensive major metros. San Francisco, San Jose, Boston and New York were the cities with the biggest increase in searches for short-term rental leases as a share of outbound searches, according to the Apartment List report.
In some ways, however, this is merely an acceleration of ongoing trends. From July to November in 2019, 29.6% of San Francisco-based renters were looking to move out of the market. From July to November this year, the number increased to only 30.7%. Apartment List has found that these trends are linked to softening demand, not necessarily a mass exodus from the market.
The increased interest in short-term leases could also signal a swift recovery for major markets like San Francisco. With closed amenities and stay-at-home orders, it isn’t surprising that renters would re-think expensive rents. However, when those amenities re-open, renters could once again justify the high cost-of-living.
Overall, secondary markets have outperformed major metros though the pandemic. While many major metros are seeing significant declines in rents, secondary markets have actually seen rising rental rates through the pandemic, up .4%, according to data from Real Page. In the top 50 US markets, rents decreased 1.7%.
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