Key Highlights

  • Rental demand in Oakland increased +62% in December 2019, higher than demand in San Francisco.
  • Rental demand in Scottsdale AZ higher than rental demand in Phoenix.
  • Rental demand in St. Paul overshadowed Minneapolis in December 2019.

Sometimes, bigger is not “better.” Take it from renters looking for lower cost of living levels and lower rents in “satellite” or smaller cities near but not “in” larger, more popular cities.

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Oakland CA, Scottsdale AZ and St. Paul MN are three such smaller “satellite” cities that are experiencing higher renter demand than their larger neighbors Phoenix, San Francisco and Minneapolis.

According to Zumper’s latest rental market analysis…

  • 2019 renter demand in Oakland increased +62%
    • Oakland’s median rent price for a one-bedroom unit was $1,237/month; San Francisco’s median rent price of a comparable one-bedroom unit was $3,603.
  • Renter demand in 2019 in Scottsdale increased 62% despite Scottsdale’s median rent, $1,397/month, being more expensive than Phoenix’s median rent by $405.
  • 2019 renter demand in St. Paul increased +33% y/y, +12% higher than renter demand in Minneapolis in 2019
    • Paul median rent was $1,315/month
    • Minneapolis median rent was $1,393/month.

Satellite cities that continued to remain in the shadows of their larger neighboring cities included…

  • Fort Worth TX despite its renter demand being just 1% less than Dallas, 343%. (Dallas continues to be a real draw for Millennials with median incomes of $57,000 who want more affordable rents.
  • Fort Lauderdale FL (+18% renter demand) despite renter demand in Tampa (22%%) being just -4% behind Tampa. Both cities are neck and neck in terms of amenities, cost of living and access to top universities.
  • Kansas City KS renter demand lagged behind that of Kansas City MO by -19% as the larger neighbor attracts cost conscious renters with lower income and sales tax levels. 

Here is Zumper’s Comparison of Rental Demand and Rental Costs/Month in Satellite and Larger Neighboring Cities for a One-Bedroom Unit:

City            2019 Median Price    Demand y/y%  Price y/y%

Dallas                 $1,233               +34%                 -4%

Ft. Worth             $1,109               +33%                 +4%

Kansas City KS      $702                 +8%                   +1%

Kansas City MO      $947                 +27%                 0%

Minneapolis          $1,393               +21%                 -2%

St. Paul                $1,315               +33%                 +4%

San Francisco        $3,603               +23%                 +3%

Oakland                 $2,366              +62%                 +9%

Phoenix                  $989                 +22%                 +3%

Scottsdale              $1,394               +62%                 +6%

Tampa                    $1,145               +22%                 +1%

Ft. Lauderdale         $1,607               +18%                 +4%


Thanks to InmanNews’ Marian McPherson and Zumper for source data.

Also read: Why For-Sale Inventory Is Running Out, Guarded Optimism as Global Lux Markets Enter 2020 – Part 2, What’s Fueling the Rise of Co-Living Investment?


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