Are suburbs making a comeback?
Rent is rockin’ the suburbs, especially those that immediately surround major cities.
Nationwide, rents are climbing faster in suburban areas than in urban ones, according to a recent Zillow report, for the first time in four years. But that doesn’t necessarily mean suburbs are becoming more popular than their metropolitan counterparts.
According to analysts, the spike in suburban rents can be attributed to the lack of affordable apartments within cities, and the rise in popularity of single-family rentals.
In Los Angeles County, suburban median rents rose 5.2 percent from March 2016 to March 2017, compared to a 4.9 percent increase in the urban core. The disparity is slightly larger in L.A. than it is in the country as a whole. Nationwide, urban rents rose 2.3 percent while suburban rents increased by 2.5 percent.
The divergence between urban and suburban rents, however, is most stark in San Francisco, where urban rents fell by 0.4 percent while suburban rose by 2.3 percent. In New York, urban rents barely rose, ticking up just 0.7 percent, while suburban rents shot up 3.3 percent. In Seattle, too, urban rents lagged behind, increasing 6.3 percent while suburban rents increased by 8.2 percent.
“The trend is more pronounced in booming markets where rent affordability is an issue…places like San Francisco, where people earning the median income pay almost 44 percent of their rent for a median-priced rental,” the Zillow report concludes.
The suburbs nonetheless remain more affordable to renters, at least for the time being, according to Zillow analysts. This is why rental demand is high. Suburbs also have a higher concentration of single-family homes, which are appealing to rental households unable to buy a single-family home.