Covid Has Made Orlando Much less Inexpensive Than San Francisco

May 7, 2021

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Since the beginning of the pandemic, the price of housing has risen in some relatively cheap places in the US and has fallen in some expensive places. This dynamic was evident even before Covid-19, when superstar cities in the US and abroad began to praise themselves out of reach for many of the workers who kept them going. Then came a contagious disease that (1) temporarily shut down most of the things that make superstar cities attractive, and (2) prompted employers to experiment with remote working on an unprecedented scale, making it easier to get superstar city jobs to separate from superstar cities real estate prices.

Even so, there is this annoying thing that happens when the price of housing goes up sharply in a place where it used to be cheap: the place stops being cheap. Look at Boise, Idaho, which saw the strongest rental increases last year of the 519 US cities that Apartment List economists make monthly rent estimates. Four years ago, it was 25% less than the national average to rent a two-bedroom apartment or house in Boise, and it was 17% less early last year. From April it was 1% more expensive.

No, 1% is not much more and Boise remains a bargain compared to many places people arrive. There are 30 California cities in Apartment List’s database with average April two-bedroom rents more than double that of Boises $ 1,144. But for those who don’t earn big city wages and don’t have bank accounts replenished with real estate profits in big cities, Boise gets a little pricey. It’s been a while for those who want to buy rather than rent: According to Zillow’s house value index, the price of the “typical” mid-range home in the Boise metropolitan area was higher than that of the typical home at the national level in 2013. As of March, it cost 53% more.

To get a better sense of the pressures the great pandemic migration could put on typical worker housing budgets in some people-moving locations, I compared the Bureau of Labor Statistics’ most recent estimates of mean wages by metropolitan area (ab May 2020) on Apartment List’s metropolitan rental estimates in April 2021, which combines the results of the Census Bureau’s annual survey of the American community with monthly data from the company’s own rental offers. (Apartment List also publishes average rents for cities and subway areas, but I chose to use two-bedroom apartment rents for consistency as the averages can mask differences in the housing mix from place to place.) The National Association of Realtors publishes a similar quarterly index of housing affordability in major cities. However, given that rents have increased in some places over the past few months, it seemed worth trying a more timely measure. And yes, I could have done something similar with Zillow’s house value data, but renters could use a little more attention, right?

My practice found that there seem to be some interesting things about housing affordability right now. Judging by the number of hours an average wage worker would have to work in a large metropolitan area (of a million people or more) to pay the average monthly rent for a two-bedroom apartment, the usual suspects on the west and east coasts are still pretty unaffordable but also some places that might surprise you.

This measure makes Orlando less affordable than San Francisco and Austin and Las Vegas less affordable than San Jose. In absolute terms, of course, they are not more expensive; Someone moving out of San Francisco or San Jose would still find all of these places to be pretty cheap, especially if they could keep working on wages in San Francisco or San Jose. But most people in Orlando, Austin, and Las Vegas don’t have that option.

Search all 177 subway areas for which both wage and rental data are available, and nine of the top 15 areas are in California, mostly smaller subway areas within commuter traffic or at least walking a few times to the office – one week away from the major coastal metropolises of the state. (Metropolitan Boise ranks 70th in this ranking with 60.6 hours.)