It’s safe to say that COVID-19 has changed just about everything this year, from the way we work, to how we live and interact. One thing many have speculated on is how the pandemic has impacted resident migration. Below we’ll explore some of the migratory trends we’ve seen, the reasons behind them, and what we can expect in the future.
Why & Where People are Moving
Based on the Hire a Helper COVID Migration Report, 15% of people who moved said they relocated because of COVID-19, and of those people, 37% said it was because they couldn’t afford current housing due to COVID-related loss of income, and 33% said they moved in order to shelter in place with family and friends.
One thing to note is that this data only captures professionally managed moves, and it’s suggested there are probably more people who moved during the pandemic on their own, even if only temporarily.
When it comes to where we’re seeing the most outbound migration, some cities have been hit harder than others. For instance, New York City and San Francisco have seen 80% more people moving out than moving in. Within these cities Class A properties have been impacted the most. Why? Because many of the residents residing in these apartments have jobs in industries like tech, finance, and marketing that allow them to work remotely, making it easier to move to other areas.
Rents and home sales have also been impacted. Since March, rents decreased in 41 of the top 100 metro areas in the U.S. In Manhattan, rental prices dropped by 24%, and the number of properties sold decreased by 56%. San Francisco saw a 9% decrease in June, and another 5% decrease in September.
But where is everyone going? For New York and San Francisco, it's largely the surrounding suburbs. Westchester county, for example, just north of New York City, saw a 112% increase in home sales. Similarly, Bay Area counties of Marin, Monterey, and Sonoma have seen an increase in housing demand.
Less densely populated states have also seen a rise in demand. Idaho saw 194% more people moving into the state than out, New Mexico saw 44% more people moving in versus out, and Delaware saw a 30% increase of people moving into the state.
What to Expect in 2021
Based on the trends we’ve seen we can say it’s likely resident migration will continue to shift. New York City and San Francisco will probably feel the effects of resident migration for a while. However, not all cities have experienced such drastic changes, and many residents are taking a “wait and see” approach and holding off on moving until things settle down. According to the National Apartment Association survey, 35% of apartment residents are transitioning to short-term or month-to-month leases.
Eventually the pandemic will subside and cities will be bustling once again. New, up-and-coming suburbs near popular metro areas may continue to see an influx of residents eager to get more space for less. For residents who work for companies that offer flexible work options, and in some cases, entirely remote employment, we may see a growing trend towards people making living decisions separately from their careers.
The pandemic has left its mark on the real estate industry, but whether resident migration will be a lasting result of the disruption remains to be seen. Regardless of where your rental properties are located, it’s best to prepare yourself with the data, insights, and technology you need to make the most of potential leasing demand and stay competitive in the year ahead.
About the author:
Stacy Holden is the Sr. Director, Industry Principal at AppFolio, a leading provider of cloud-based business software solutions in the real estate market. Stacy has over 20 years of experience in the real estate and property management industry and is an expert on leveraging technology to solve business challenges.