After bidding farewell to their college days, graduates embark on the next chapter of their lives, seeking new opportunities in unfamiliar territories. Often moving to new cities, college graduates are on the lookout for promising careers while taking into account how much of their income would be allocated toward rent in a new location.
To help in finding the best location, Zillow conducted a study to identify the most favorable areas for recent graduates. Rankings were based on multiple factors, such as average recent graduate incomes, rent, the presence of other young people and job growth prospects.
The analysis placed Phoenix in the top 5 cities, coming in behind Colorado Springs, Spokane and Des Moines. Phoenix was one of only two major metros to make the list.
Phoenix, the 11th largest U.S. metro by population, secured its fourth place ranking primarily due to its abundance of job openings. Although the typical starting salary of $62,000 isn’t ideal for the average rent of $1,918 in Phoenix, Zillow believes that the high population of individuals in their twenties can make finding a roommate easier.
Undoubtedly, it is worth noting that smaller cities often boast more affordable rental prices, as exemplified by Des Moines, where the rent-to-income ratio stands at 24%, compared to Phoenix’s 37%. Zillow senior economist Nicole Bachaud told Axios Phoenix that an increasing number of young people are opting for smaller markets with good jobs but a lower cost of living.
This ranking marks a huge jump for Phoenix, when in 2011 more than half of graduates from Arizona universities left the state within two decades due to a lack of career advancement opportunities. In the aftermath of the Great Recession, Phoenix restructured its economy to be more resilient and support higher paying industries, such as advanced manufacturing and health care. These efforts have led to more job openings for college graduates than any other market in Zillow’s study.
“I think it’s important to understand that rent’s expensive everywhere. It’s expensive in Phoenix, but not that much more so in Phoenix than in other markets,” says Bachaud.
Read Zillow’s full report here.
