Cities like San Francisco and Seattle are attracting recent college graduates, even though they are very expensive places to live.
San Francisco is one of the most expensive American cities to live in.
College graduates are flocking to the Bay Area, because that is where the jobs are.
Charlotte, Denver and Seattle are also attracting a large number of recent college graduates, for a variety of reasons.
Washington, D.C., with its seemingly endless supply of government jobs, is also a hub of recent college graduate activity.
Credible, a student loan marketplace, conducted a survey of 4,500 recent college graduates who have been out of school an average of 4.5 years to determine where they ended up. The study found that Washington, D.C. and Charlotte have approximately 2.2 out-of-state graduates relocate there to every one in-state graduate that stays home.
Two other cities scoring highly in the study that also support expensive housing were Dallas and New York. But those cities are also supporting businesses that need workers with college degrees, so the students are going to where the jobs are.
In its report on the study, CNBC spoke to Matthew Gardner, chief economist at Windermere Real Estate in Seattle, to find out why college graduates head to expensive cities.
“People are going to be attracted to a thriving job market, regardless of the cost,’’ Gardner said. “The most important thing on many of their minds is to get a job.”
“It’s simple supply and demand,’’ said Credible CEO Stephen Dash. “As more graduates move to these cities, they will become more expensive, and it’s likely that new cities will become more attractive.
Out of the 20 cities Credible examined data on, those with the lowest ratio of out-of-state graduates were Columbus, Ohio, Minneapolis, Boston, Philadelphia and San Diego.
The Credible report also determined where the cities are getting the most graduates from. For instance, San Francisco is drawing most students from New York, Massachusetts and Illinois. New York City, meanwhile, is drawing students from Massachusetts, Pennsylvania and California, returning the favor to San Francisco.
Interestingly, the city with the lowest income-to-rent ratio, Atlanta, also had one of the lowest out-of-state graduate draw numbers.
There is competition among states to attract recent college graduates with student loan debt. Maryland, Ohio and Rhode Island offer homebuyer assistance to mortgage applicants with student loan balances. Maryland offers discounted mortgages and up to $5,000 in down-payment assistance to recent graduates with at least $25,000 in student loan debt who are willing to purchase homes in a select group of communities.
The state of New York will make student loan payments for two years for recent graduates from New York who remain in the state.
Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.