- Large-city suburbs saw the biggest gain in residents during the pandemic migration, per Jefferies.
- This will give nearby cities a needed economic boost, but it’s making the suburbs a cutthroat place.
- Most urbanites moved to these suburbs or temporarily, making the migration more of a reshuffle.
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2020 was the year urbanites took flight. But many of them didn’t go very far.
The pandemic’s great migration boom mostly consisted of urban dwellers leaving big cities for its directly outlying suburbs, according to a recent Jefferies note that analyzed the latest USPS data. “Large central metro” areas like New York City and Houston saw the biggest exodus, while “large fringe metro” areas saw the biggest influx of residents.
The trend is evidence that city dwellers sought more space during the pandemic but still wanted to remain close to cities – where employers and entertainment are – when the economy began to reopen, Jefferies states. Consider the San Franciscans who headed out to Sacramento or Oakland, or the New Yorkers who moved east to Long Island.
They’re all areas still within short traveling time to major cities, which Bloomberg has described as a reflection of an expanding regional labor market. Through spending as visitors rather than residents, it’s likely that these urban movers will help boost big cities, which stand to see an estimated 10% drop in spending due to a remote economy.
While fewer big-city residents have moved this year amid an economic reopening and rising vaccination rates, migration into the suburbs of large cities has still remained strong during the first few months of the year. It stands to reason, then, that big cities could also get a spending hit from suburbanites new to the area in addition to its former residents.
Big cities may still reap benefits from outlying populations, but the suburban scene itself is getting cutthroat. Jefferies anticipates the trend will continue to fuel the demand for suburban, single-family homes, which heated up a real estate market to the point of a historic housing shortage and record-high prices.
The reshuffling of America
To be sure, big-city suburbs aren’t a hot spot for everyone.
Some urbanites kissed their metro areas goodbye for good, preferring a life in the countryside or a more removed suburb. And others left for a new state entirely. About 9,000 Manhattanites who moved to Florida plan to stay there permanently, per USPS data. But it’s also likely that, considering the continued strength of migration to big city suburbs while migration from big cities stabilizes, state movers are also choosing suburbs in large metro areas.
There are also the migrants who moved only temporarily, intending to return to big city life. As a Bank of America Research report from May puts it, the urban flight is “more myth than reality.” It argued that economic reopening will spark a return to big cities like New York City and San Francisco.
“Both have the potential for some recovery in the near term,” the note reads. “NYC and SF remain premier cities for young renters given their status as economic, financial, and cultural centers, and the pullback in rents over the past year helps affordability.”
In NYC, some of those who left for the suburbs are already returning. And the 10,000 other Manhattanites who moved to Florida, according to USPS data, plan to move back.
Whether urbanites moved temporarily or to the suburbs, one thing is clear: The migration of 2020 is more of an urban reshuffle than anything.