Add The New York Post on Google For-sale home prices refuse to budge, and it’s pushing an army of would-be buyers back into the rental market — a trend quietly reshaping which cities are about to boom.
New data from Zillow shows renters nationwide are increasingly hunting for apartments outside their own metro areas, and the cities pulling in the biggest crowds of outsiders are Buffalo, Chicago and Houston, followed by New Orleans and Dallas.
In markets like Salt Lake City, Raleigh, Hartford and Nashville, out-of-towners searching for rentals now outnumber locals altogether, a sign that the migration wave that hit those cities has already matured into full-blown demand.
That matters more than it seems. Rental searches tend to predict where home sales heat up next, since renting is often the test run before a purchase.
“Renting is often how people try out a new community before committing. When we see a market with a growing share of rental searches coming from outside the metro, that tips us off to a developing pipeline,” Mischa Fisher, chief economist at Zillow, said in the report.
“A year-over-year surge in out-of-town browsing in places like Buffalo and Chicago tells us a wave of newcomers may not be far behind.”
Buffalo is the clearest case study. The average home value in the city sits at $249,040, a fraction of the $434,100 national median for an existing home sold in July, according to the National Association of Realtors.
Homes there are also moving fast, going to pending in about 10 days, and prices have climbed 104% since the start of the pandemic, according to Parcl Labs data.
Despite that run-up, Buffalo remains one of the more attainable markets in the entire Northeast, and renters testing out the city before buying appear to be catching on early.
Houston tells a slightly different story, one built on jobs rather than sheer cost. The metro’s median sale price was $360,000 over the three months ending in July, up 2.2% year-over-year, according to Redfin, while Zillow put the average home value closer to $260,000.
Houston’s economy added roughly 18,000 jobs on an annualized basis over the three months ending in May, according to the Dallas Federal Reserve, with growth spread across energy, construction, manufacturing and healthcare.
Relocation buyers from expensive coastal states, particularly California, New York and Illinois, have increasingly viewed Houston as their landing pad, and the rental search data suggests many are trying the city out first.
Chicago is the outlier in the group, since it is not cheap by comparison to Buffalo or Houston, but it is still far more affordable than the coasts. The city’s average home value stands at $315,024, and depending on the data source, the broader metro’s median sale price ranges from the mid-$300,000s to as high as $425,000.
Even so, Chicago ranked first for annual median price growth among the nation’s 40 largest markets in a recent Homes.com analysis, evidence that renters flowing in from outside the metro are arriving at a market already gaining momentum rather than one still cooling off.
The pattern lines up with the broader math. Rents, meanwhile, are creeping back up after years of relief. August marked the first month-over-month increase in four years, according to Apartment List, even though prices were still running slightly below where they stood a year earlier.
New York City stands apart from the rest of the country’s renters in one key way. While most tenants elsewhere are searching just across state lines, New Yorkers are looking south, with Raleigh and the Florida cities of Miami, Orlando and Tampa pulling in outsized shares of their attention.
Fisher said the direction of the traffic tells its own story.
“When we see strong out-of-town interest flowing into a smaller market, it’s often an affordability story. So renters in pricier places are choosing or discovering that they can get a lot more for their money somewhere new,” Fisher said.
“When the flow goes the other direction, into a major metro, it’s frequently regional pull, people drawn to a big city’s job market or opportunities from nearby.”
Even with the wave of pandemic-era arrivals already reshaping Southern cities, the region has held onto its price advantage over the coasts, keeping the migration alive on both a financial and lifestyle basis.
RentCafe’s latest “Best Cities for Renters” ranking backs that up, with 37 of the top 50 spots going to Southern cities and McKinney, Texas, Huntsville, Alabama, and Austin, Texas, taking the top three slots.
