10 Cities Where Rental Demand Is Likely to Skyrocket in 2021
No longer tied to working in an office in the wake of the Coronavirus pandemic, Americans have become increasingly nomadic. A recent report from Redfin found 30.6% of users were looking to move to a new metro in April—up 26% from those seeking relocation in April 2020.
“More than 1-in-10 Americans have already moved in the past year, but we think the Great Reshuffling is just getting started,” said Nicole Bachaud, an economic data analyst at Zillow.
It’s a trend that shows little sign of stopping despite vaccine rollouts and many offices reopening to at least some degree. In fact, the number of workers who consider themselves “digital nomads” increased from 3.2 million to 6.3 million in 2020, per MBO Partners’ 2020 State of Independence research study.
Zillow and Yelp paired up on a deep dive into where these future-renters may be headed. Locations were ranked based on factors such as availability and affordability of rentals listed on Zillow, combined with Yelp data on consumer demand, among other criteria.
“These destinations boast a mix of outdoor adventure and city perks that are appealing to the many young professionals who have transitioned to the nomadic lifestyle due to their new-found ability to work from anywhere,” said Tara Lewis, a trend expert at Yelp. “They’re great for digital nomads and offer a variety of highly rated local businesses and activities these folks are looking for, like shared office spaces, furniture rental, hiking, RV repairs, paddle boarding, and more.”
Top 10 US Metros for Digital Nomads
10. Salt Lake City, Utah
Typical rental rates: $1,761/month
9. Las Vegas, Nevada
Typical rental rates: $1,275
8. Asheville, North Carolina
Typical rental rates: $1,782
7. Fort Collins, Colorado
Typical rental rates: $1,795
6. San Jose, California
Typical rental rates: $2,511
5. Charleston, South Carolina
Typical rental rates: $1,645
4. Nashville, Tennessee
Typical rental rates: $1,369
3. Boise, Idaho
Typical rental rates: $1,495
2. Austin, Texas
Typical rental rates: $1,323
1. Jacksonville, Florida
Typical rental rates: $960
Rental Rates Rebound From Post-Pandemic Slip
Overall, it’s shaping up to be a good year for investment property owners. Rental rates have been on the rise in 2021, “and are now growing at the fastest pace since the pandemic began: 1.5% month-over-month and 3% year-over-year,” Zillow reported.
In its analysis of the top 50 metros, Zillow noted rents rose between March and April in every city except Cleveland, where it fell 0.3% to $1,184—an amount that’s still 6.1% higher than it was a year prior.
Nationwide, renters are typically paying $1,704 a month as of April. Year over year, rents have grown the most in the Sunbelt and Inland Northwest, while stagnating or falling in big, expensive cities—where digital nomads are packing up and moving out.
Namely, metros where rental rates have decreased include:
- San Francisco (-7.7%)
- New York (-6.7%)
- San Jose (-6.6%)
- Boston (-4.1%)
- Seattle (-3%)
“The dust has not settled, as there are still a lot of unknowns about what portion of workers will return to the office and how many will pick up and move because they finally have clarity from their employers about whether or how often they can work remotely,” added Daryl Fairweather, chief economist at Redfin. “Once people know more about their future, we could see another big wave of migration as people settle into the new normal.”