Inbound Migration Drops in the Largest Metros

As COVID has changed work patterns around the country, a lot has been written about people leaving large cities.

Apartment List’s quarterly Renter Migration Report, which incorporates data from millions of user searches from April 1, 2020, through August 10, 2020, and is conducted at the metro level according to Census-defined metropolitan areas, sheds some light on this perceived exodus from large cities.

Apartment List found that fewer people were interested in changing cities. Relative inbound migration dropped from 31.1% to 28.8% year-over-year in the nation’s 50 largest metros. Despite a lot of news reports about renters moving out of large metropolitan areas, Apartment List found that outbound migration was essentially flat, falling from 24.3% to 24.2%. 

“Together, this tells us that in the wake of the COVID-19 pandemic, big rentals markets are not seeing the outside influx of demand that they did last year,” Apartment List said in the Renter Migration Report. “More and more, renters are choosing to either search locally or search in smaller markets outside the 50 largest that typically dominate search volume.”

Thirty-seven of the 50 largest cities saw declines in relative inbound migration. Twenty-six of the 50 largest metros saw a year-over-year decrease in relative outbound migration. For both inbound and outbound shifts, Apartment List says the largest declines occurred in the places where they were the highest in 2019.

For instance, 47.2% of the inbound searches to San Francisco came from outside the city from April to August 2019. This year that number declined to 35.6%.

Affordability appears to be the main thing driving renters out of San Francisco and other high-cost areas. Liberal telework policies also play a large role, with many workers discovering they no longer need to live in expensive cities to do their jobs.

“Over the past decade, San Francisco’s tech sector has powered tremendous job growth and inbound interest among renters looking to move,” says Igor Popov, Chief Economist for Apartment List. “This summer, many of the companies are hiring remotely, so renters don’t need to move [at least not yet] to get these jobs. At the same time, many small businesses have been closed, temporarily cutting off some of the benefits of moving to a big city. The result is lower inbound interest for San Francisco rentals.”

As migration into San Francisco slows, inbound migration to Sacramento increased by 3.8% compared to last year. Apartment List says San Francisco is the most popular source of inbound searches to Sacramento. 

The San Francisco-Sacramento dynamic is playing out in other areas of the country, according to the Apartment List. Richmond, Va., which is 100 miles from Washington, D.C., saw relative inbound migration increase from 31.4% last year to 34.6% this year. Philadelphia, which is between New York and Washington, and Riverside, Calif., also experienced increases in relative migration.

“I think we’re seeing some convergence across rental markets — the hottest cities are cooling off and new cities are heating up,” Popov says. “Affordable markets are seeing a boost in rental interest, especially if they are in driving distance of large job centers. The new normal in 2021 and beyond may involve commuting to the office once or twice a week. In this case, smaller cities within 100 miles of San Francisco, Los Angeles and New York City are going to thrive in the near future.”