Unfortunately, a hangover implies that the pandemic is over. It’s still here but there are signs that the virus is getting less deadly. Outbreaks will continue to occur, but in the minds of renters, it is largely over with. We now have the lasting effects of the pandemic, this hangover of problems ranging from supply-chain issues to vaccine issues to relocation issues.
Rent.com’s Migration Nation report for Q2 2022 (Sorry, the link will change in Q3) was released recently and found that 60% of renters reported planning to move in the next 6 months. These people hopefully aren’t your tenants, but they hopefully are moving to your location.
Where are They Moving?
Let’s first ask where they are leaving. Any guesses? It turns out it is the big cities. For the most part, if you aren’t in Kansas City and live in another major city, you are seeing people leaving your state more than coming to it. Migration Nation looks at how many people are moving to a state and subtracts how many are leaving. The percentage difference is called the Lead Delta. States with large cities are being hit the hardest. These include New York, Illinois, Colorado, and Georgia.
They are moving to states like North Dakota, South Carolina, New Hampshire, and Mississippi and that big wide open blue space in the North Central. Keep in mind these are percentages not raw numbers of people moving. In general, people are moving to the Midwest and the Southeast, and not the larger cities.
Also reported are lead deltas for major cities. Biggest losers are Charlotte, St. Louis, Chicago, Washington DC, Atlanta, Denver, San Francisco, and the list goes on. Pretty much any state with a large city is gray or worse on the map below. More recent areas that investors have seen as a slam dunk place to invest are now tipping negative. These include Austin, Nashville, Columbus, and Phoenix.
Is this a problem for you? Not likely to be the case right away. We are definitely seeing a trend of people wanting to leave the big cities and live a quieter life. There’s still plenty of people in big states and big cities that will need a home. Landlords in those areas, will need to work harder to make their units shine above the others. Let me know what you are doing to plan for the Great Migration.