For several years America’s largest cities, Chicago, Los Angeles, and New York have seen a steady decline in population. According to Bloomberg, New York experienced a net loss of 277 people per day in 2018, while LA and Chicago experienced a net loss of 201 and 161 residents per day respectively.
Source: William H. Frey
The 2020 census estimates will not be published for several months, but many speculate the 2020 pandemic has only intensified this trend. A New York Times report found that between March 1st and May 1st 420,000 residents left the city, which is roughly 5% of the total population of the city.
The question is why? There are many factors at play including crime levels, homelessness, etc. but two main factors to consider are affordability and technology. LA for example has seen a 75% increase in home prices since 2009. This has incentivized young professionals and middle-class families to move to smaller metro areas where there is a larger supply of affordable and quality housing. Technology has allowed those who would normally flock to large cities for career advancement and high incomes to move to smaller metro areas where they can enjoy similar career and income prospects with lower living standards. Another, although harder to quantify metric, is the social and entertainment scene where cities like New York and LA have had a monopoly on for many years. Now mid-size cities like Austin, Portland, and Nashville have developed their own social and entertainment scenes drawing domestic tourists that rival that of larger cities and make these mid-size cities that much more attractive for young professionals.
According to the 2019 US Census data, those moving from the larger metro areas seem to be migrating to mid-size cities in the southern and western parts of the country with a few pockets in the mid-west like Ohio (i.e. Columbus). In the last decade 10 of the 15fastest growing cities where in the south.
There are no clear signs the flight from these large metro areas will wane and many speculate these trends may only accelerate. For Paragon, we are uniquely well position to capture these trends. Our single-family home portfolio solely operates outside of these large metro areas and mainly in the south, specifically Memphis and Houston, where there are strong local economies and demographic trends.
Source : https://www.theatlantic.com/ideas/archive/2019/09/americas-three-biggest-metros-shrinking/597544/
