Yelp’s Local Economic Outlook: Home Automation is on the Rise

Today we’re releasing the third installment of Yelp’s Local Economic Outlook, a program to rank U.S. metro areas by the pace of growth in their local-business population. This program is part of a larger, ongoing project to surface insights from Yelp’s deep data stores to help businesses succeed and arm policymakers with the information they need to boost local economies.

While Yelp is most commonly recognized for our leadership in restaurants, Home & Local services has become the fastest growing and largest category by revenue on our platform. In the first quarter of 2018, Yelpers sent more than 4 million quote requests, and Home and Local businesses increased the amount they spend to advertise on Yelp by approximately 30% compared to one year ago. There are now more than 1 million local businesses set up to receive consumer quote requests via Yelp.

This growth inspired us to take a closer look at what’s happening within the category and its impact on American cities.

While examining the growth in Home & Local services on Yelp, we noticed an interesting trend: a dramatic rise in the number of searches for “smart home” and enormous growth in Home Automation businesses.

The Internet of Things isn’t Just For Techies

As voice assistants and connected devices continue to dominate tech headlines, it seems the trend may be expanding across America. In the past two years, searches for “smart home” on Yelp have quadrupled and this growth doesn’t show signs of slowing.

Of those searches for “smart home,” consumers are most often seeking out businesses specializing in Home Automation and Security Systems. Home Automation in particular is one of the fastest growing Home & Local services subcategories on Yelp.

In the first quarter of 2018, the number of quote requests sent through Yelp to Home Automation businesses more than doubled from a year earlier. In response to this demand, more businesses are opening up shop. There are almost 30% more Home Automation businesses on Yelp today than there were a year ago.

The rapid growth in consumer demand and the industry response suggests that the rise of smart homes may not be a flash in the pan as users beyond early adopters join in.

While Home Automation has emerged as one of the fastest growing business types on Yelp, we’ve also noticed that the larger success and growth of Home & Local service businesses in a city is strongly linked to the economic health of that city.

Austin, Texas, Leads The Country In Local-Business Growth

The Local Economic Outlook ranks 50 U.S. cities by local-business investment and success to reveal the health of urban economies around the country. We measure local-business success by the rate of change of the business population in each city’s metro area in the first quarter of 2018. Cities where openings greatly outnumber closures are ones where business owners have spotted opportunity and found success.

In the first quarter of 2018, Austin, Texas, topped the list. Largely driven by the growing tech sector and VC investment, Austin’s unemployment rate in 2017 dropped to levels not seen since 2000. Spurred by the influx of people moving to the area in search of newly available jobs, construction and other home services industries have seen tremendous growth in the Austin area.

In fact, Home & Local services accounted for the largest share of total net business growth among all major business categories in Austin. This dominance by Home & Local services is seen throughout the top cities on the Local Economic Outlook list.

Let’s take a deeper dive into our Local Economic Outlook rankings for Q1 2018, which counts Austin, Miami, and Atlanta in the top three. Meanwhile, Philadelphia fell to the bottom of this quarter’s list, which could be a reflection of the city’s high poverty rate (25.7), rising homicide rates, and increasing opioid epidemic.

(metro area)

top neighborhoods


Austin, Texas

As a burgeoning tech hub, Austin has seen an influx of VC investment, and new residents moving to the area for newly available employment options in the tech sector. This growth has bolstered construction and home and local services industries in the Austin area, contributing largely to the city’s position at the top of this quarter’s Local Economic Outlook.

Here's a look at the city's main business categories, ranked by net growth in each quarter.


Miami, Florida

Recent reports suggest that Miami entrepreneurs are extremely optimistic about 2018, leading to small business growth and increased opportunity. Best known for it’s real estate and hospitality industries, Miami has also quietly established itself as a tech hub, cultivating a new generation of innovation by courting VC investments, incubator programs, and investing in coworking spaces for entrepreneurs.

Here's a look at the city's main business categories, ranked by net growth in each quarter.


Atlanta, Georgia

With rent growing at three times the national median, Atlanta’s increased population and thriving local economy pose challenges to existing infrastructure and housing availability. Home to major corporate employers like Home Depot, UPS, and Coca-Cola, Atlanta is also benefiting from two recently finished sports complexes, the growing influence of Alpharetta’s Avalon, and Pinewood Studios’ support of the area’s growing movie industry.

Here's a look at the city's main business categories, ranked by net growth in each quarter.


Phoenix, Arizona

According to recent reports, Phoenix is among the top five cities in the U.S. for indicators such as job creation, personal income, and housing permits. Fueled by the region’s rising population, Phoenix’s construction and real estate industries continue to see healthy growth.

Here's a look at the city's main business categories, ranked by net growth in each quarter.


Charlotte, North Carolina

As one of the cities recently considered for Amazon’s second headquarters, North Carolina is adding jobs more quickly than the national average and is expected to add 25,000 jobs this year. According to the city, people are moving to Charlotte for jobs in thriving health care, finance and professional service sectors as well as a lower cost of living and affordable real estate.

Here's a look at the city's main business categories, ranked by net growth in each quarter.

Explore the data yourself.

Find out how each of the 50 metro areas in America have fared over the last year.

Q2 2017

Q3 2017

Q4 2017

Q1 2018





Building a Model to Measure Economic Outlook


Yelp, the leader in connecting people with great local businesses, is putting its rich data stores to work identifying the parts of the country and types of business with the highest rate of growth in the number of businesses. Our data science team is continually working to identify the best measure of local economic health. This quarter, we are using the same methodology as last quarter: We’re using the rate of change in the number of businesses in a city or business category as a way to equally weight business closures — a sign of economic challenges — and business openings, a sign of business investment and dynamism. We’ll continue to study and refine this measure in the quarters to come as we release further updates on local business health.

Time Frame

The rankings are based on data from the first quarter of 2018 (January through March). The changes in rankings are based on comparing data from the first quarter of 2018 with data from the fourth quarter of 2017 (October through December).


We built our rankings using the top 10 primary categories on Yelp, according to page views. We chose 50 major U.S. cities — the Yelp 50 — based on a combination of factors, including the number of businesses in those cities.

Choosing the 50 Cities in the Economic Outlook

We started with the three biggest cities as measured by number of listings on Yelp in each of the Census Bureau’s nine U.S. regions in 2017. We then added 23 of the other largest cities in the country. Each city includes businesses within the city’s larger metro area, as defined by the Census Bureau’s Metropolitan Statistical Areas. We continue to track these 50 cities — the Yelp 50 — each quarter.

Liina Potter contributed to the analysis and reporting of findings. All visual and interactive materials built by The DataFace.