Oakland gets attention Demandjumped for Oakland and Scottsdale due to the high rents of SanFrancisco and Phoenix.

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SAN FRANCISCO—When a major US city gets too expensive orcorresponding satellite cities start sprouting new amenities,demand and price growth in those satellite cities can actuallyoutpace that of the core cities. Zumper used its data to identifymajor metropolitan areas that retained popularity last year andwhich satellite cities stole the spotlight.

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"Our data shows that renters are starting to get more and moreinterested in renting in satellite cities to avoid sky-high rentsin city centers like San Francisco," Crystal Chen, marketingmanager with Zumper, tells GlobeSt.com. "This is not surprising,but what is surprising is how quickly demand is risingyear-over-year."

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Satellite Cities with Larger Demand Growth:

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Oakland, CA posted a large 62% increase in demand from 2018 to2019, while San Francisco's demand grew 23%. With one-bedroom rentin San Francisco hovering around the $3,500 threshold, many rentersare being priced out of the nation's most expensive city and areturning to more affordable satellite cities such as Oakland forlower living expenses.

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Scottsdale, AZ, similar to Oakland, saw a year-over-year demandbump of 62%, shadowing Phoenix's 22% growth. Scottsdale has becomea very popular city, offering a strong job market, affordability interms of cost of living and status as one of America's top collegetowns.

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St. Paul, MN's 33% year-over-year demand growth rate outpacedMinneapolis' 21%, though both cities experienced a growing demandfrom thriving job markets and newly constructed housing becomingmore readily available. Demand can be attributed to St. Paul'smedian one-bedroom rent being somewhat less expensive thanMinneapolis'.

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Main Cities With Larger Demand Growth:

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Dallas' 34% year-over-year demand growth rate inched out FortWorth's by 1%. As the DFW metro area has one of the nation'sfastest growing populations, the demand for housing has remainedhigh.

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Notably, all satellite cities had larger year-over-year rentalgrowth rates than respective main cities and not every satellitecity had less expensive rents. Oakland's year-over-year rent pricegrowth rate outpaced San Francisco's by three times. Similarly,Scottsdale rental rates grew twice as fast as Phoenix's. Dallas andMinneapolis rents both decreased in the past year, down 4% and 2%respectively, while corresponding satellite cities, Fort Worth andSt. Paul, had growth rates both up 4%.

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Lisa Brown

Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.