Within the hot urban real estate markets, we are seeing prices, both purchase and rentals, plateau. A few folks might see this the portent of the end of the greatest run in real estate since the 80’s. But nothing could be further from the truth. Lending rates are still attractively low, inventory is even lower, and the economy it picking up steam. So until the demand for new homes reached a healthy level, we will continue to see rents in suburban regions surrounding burgeoning cities rise. 
• Nationwide, rents in the suburbs rose at a faster pace year-over-year than rents in urban areas.
• Suburban rents are rising fastest in Seattle, Portland, Ore., and Los Angeles.
• In San Francisco, the price of an urban rental dropped 0.4 percent, while suburban rental prices climbed 2.6 percent.
In addition to the conundrum of historic low inventories the issue of affordability is beginning to impact the real estate market.
Shortages are for the “first time in four years” affecting the trend of suburban rents especially in those areas that surround the pricey urban markets such as San Francisco, Seattle, and New York City.
For example, as of April 2017, an average monthly apartment rent within the city of Jersey City, NJ is $2,888; a one-bedroom apartments in Jersey City rents for $2,502 a month on average and two-bedroom apartment rents for an average of $3,327.
According to Zillow, “the median monthly cost of a suburban rental is up about 2.5% year-over-year, as compared to the median cost of an urban rental, which is up 2.3% for the same period.” In 2016, the median urban rental price jumped up 5% year-over-year. The median suburban rental prices were up 3% in 2016. This flip in trend points to the affordability having a clear impact upon demand.
The stark reality of finding an affordable home within a sparse inventory landscape points to the years of urban rent increases pushing the plausibility of city living out of reach for many renters. Now it is not just homeowners who are willing or being forced to commute: they are being joined by renters.
Zillow also cited that the rental population consisting of those former homeowners forced out of their pricey mortgages and their homes are relocating in the suburbs that have easy access to the urban areas.
The laws that prohibit former homeowners from buying again for seven years after their foreclosures are now expiring. Their re-entrance into the home buyer market is creating greater demand for wh
at is already a scarce commodity: an affordable single family home. In 2016, 19.2% of single-family homes were rented, up from 12.7% in 2005.
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