October 3, 2015 - Property Markets
Migration to the suburbs and relatively stronger suburban population growth rates have been the American norm for a generation. At least until recently. Bucking the historic trends, a disproportionate share of population gains have accrued to large urban centers since 2010. Recent data from the Census Bureau shows that growth in primary cities outpaced their suburbs in each of the three years ending mid-2013. That contrasts sharply with the ten years ending 2010, when suburbs were growing at roughly three times the pace of their urban cores.
Along another dimension, the data also show that larger cities have been growing faster than their historic trend rates. Large cities — those with 250,000 people or more — have registered population gains over the last three years nearly doubling the average of the prior decade. And the very largest cities, including New York, Chicago, and Philadelphia, confirm the trend in primary investment markets.
It remains unclear if the rebalancing will persist over the long-term. It may well reflect the weakness of single-family housing purchase activity, which coincides with suburban migration for many younger families. William Frey, Senior Fellow with the Metropolitan Policy Program at the Brookings Institution, sees a link to the millennials that are contributing to robust rental apartment demand:
Moreover, the cities that are growing most rapidly are located in areas with economies and amenities that are attractive to millennials, graduates and young professionals, who make up a growing portion of potential movers. So while it is too soon to anoint this the “decade of the city,” the persistence of big city growth is hard to ignore.
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