The Census’ latest population tallies indicate burgeoning population growth in the Sun Belt’s largest metros (population = >1M) relative to the rest of the country. Most of the largest metros in the Northeast and West Coast are either stagnating or outright declining. Results are mixed in the Midwest. Of the 26 largest metros in the Sun Belt, 18 increased their population counts— the same could be said for just 12 out of 30 in the rest of the country.
The top 10 fastest-growing metros are all located in the Sun Belt. Austin (2.3%) and Raleigh (2.0%) topped the list followed by Jacksonville (1.6%), Phoenix (1.6%), and San Antonio (1.4%). Changes in the population totals are observable in the strong rent increases recorded in Zillow’s Observed Rent Index. According to the index, between 2020 and 2021, monthly average rents increased by the following:
· Austin (13%)
· Raleigh (11%)
· Jacksonville (16%)
· Phoenix (19%)
· San Antonio (9%)
The bottom 5 on the population growth list are all coastal cities with relatively high costs of living. If the stagnant recovery in office usage in Gateway coastal metros like San Francisco (-2.5%) and New York (-1.3%) continues, it will likely keep population growth somewhat subdued compared to the rest of the country. Rent growth in San Francisco was essentially flat, while growth in New York and San Jose (-2.2%) were 1% and -1%, respectively.
A somewhat similar trend of weakness in the Northeast and coastal California regions and strength in the Sun Belt can be observed when looking at metros with under 1 million residents. Some metros with sizable population declines in the Sun Belt have economic fortunes anchored to industries (such as oil) with volatile, boom-and-bust track records. Midland, TX, and Odessa, TX, for example, are situated in the Permian Basin and Texas’ oil and gas employment saw a substantial decline at the beginning of the pandemic and it still has not recovered.
Florida on the other hand is a different story, with a top-performing metro in every population category. Population growth in The Villages, FL made headlines last year when it was announced as the fastest-growing metro in the country between 2010 and 2020. Its growth will likely continue to outpace national growth rates in the future, owing to its growing retirement community and the amenities that spring up around it. The population growth seems to be spilling into home prices. According to Zillow’s Home Value Index, in 2021, average home prices grew by the following:
· Punta Gorda (23%)
· Naples (21%)
· Lakeland (18%)
· Ocala (16%)
· The Villages (5%)
(Note: Data were unavailable for Cape Coral)
Another trend that will be interesting to watch over the medium-term is the strong showing among metros in Utah and Idaho. Perhaps it’s no surprise given that they topped the list in state-level population growth, but it is still unclear how long the trend will continue. However, the states benefit from a low-cost of living compared to more expensive and relatively close coastal markets on the West Coast. St. George’s, UT was the fastest- growing metro in the country with a 5.1% population growth between 2020 and 2021.