Chronicle Journal: Finance

Realtor.com® Deurbanization Report: The Grass is Greener in the Suburbs

SANTA CLARA, Calif., Sept. 25, 2020 /PRNewswire/ -- Driven by a desire for more space, affordable homes, and a new-found freedom to work remotely, a deurbanization trend has emerged among homebuyers, according to new data released today by realtor.com®. While housing markets in both suburban and urban areas recovered rapidly post-COVID shut down, suburban markets have experienced more interest from home shoppers, stronger improvement of price growth, and quicker home sales than urban areas this summer.

"In one of the most seismic shifts to the U.S. workforce since the introduction of the Internet, many U.S. workers now have the flexibility to work remotely and choose where they want to live," said realtor.com®'s Chief Economist, Danielle Hale. "Data shows in our post-COVID world there's a strong preference towards a suburban lifestyle with its bigger houses, backyards, and quiet streets. But American cities are not becoming ghost towns anytime soon; in fact they are also seeing an uptick of homebuyers, it's just not as strong as the surge we're seeing in the suburbs."

Home price growth in the suburbs has improved more quickly during the pandemic

  • Historically, home prices have grown faster in urban areas than the suburbs, however, suburban prices have accelerated 3.2% since the first week of March, compared to an acceleration of only 2.3% for urban areas*.
  • Within the nation's top 10 largest metros, prices started to rise faster in the suburbs than in urban areas since March; the median listing price of suburban properties within these metros is now up 5.2% over last year, whereas in urban areas it's up by only 2.4%. See chart below for metro specific data.

Properties in both suburban and urban areas are flying off the market, but suburban homes are selling much more quickly than last year 

  • At the peak of the pandemic in April, home buyers paused their search and the time a typical property spent on the market spiked in both suburban and urban areas. Following the real estate freeze, the time it took to sell a suburban home recovered faster than urban homes. In fact, suburban homes spent only 28.5% more time on the market in early May compared to last year, whereas urban homes spent 34.1% more time on the market compared to last year.
  • As the housing market began to accelerate in the summer months, properties began to sell at an unprecedented fast-pace in both suburban (11.4% faster last year) and urban areas (8.0% faster than last year).
  • This difference between urban and suburban homes was even more pronounced within the nation's top 10 largest metros; suburban homes are spending 16.2% less time on the market compared to last year, whereas urban homes are spending 10.4% less time on the market. See chart below for metro specific data.

"Based on the rising popularity of the burbs, some buyers might think they can catch a break by searching in the city, but unfortunately that's not the case. Rising home prices and fast home sales are everywhere. If you're a buyer in today's market, finding and closing on your dream home is not going to be easy," noted Hale.

Suburban homes for sale are evaporating as more and more buyers flock to the suburbs

  • As the pandemic drives greater demand for larger homes and backyards, the number of homes for sale in the suburbs is dwindling at a faster rate than in urban areas.
  • Currently, the number of homes for sale is down 41.3% compared to last year in suburban areas, while urban homes for sale are down 34.3%. This divergence in available homes began in early April, during the peak of the COVID-19 shutdowns, and has continued to accelerate since.
  • Within the nation's 10 largest metros, the divide in the number of suburban and urban listings is even greater; the number of suburban homes for sale are currently down 40.2% compared to last year, whereas suburban homes are down 13.4%. See chart below for metro specific data.

Online home shopping habits have shown a growing preference for suburban homes

  • Throughout the pandemic, realtor.com® home shoppers have viewed more homes in suburban areas vs. urban areas. Immediately following stay at home orders, in late March, the count of shoppers viewing suburban homes fell by only 3.1% since last year, compared to 5.1% for urban shoppers.
  • As real estate activity began to recover, interest in suburban homes began to accelerate. In August, the number of suburban home shoppers on realtor.com® grew by 53.9% since last year, compared to a 50.7% increase for urban home shoppers.
  • Within the nation's 10 largest metro areas, suburban home shoppers grew by 56.4% year-over-year, compared to only 43.6% higher for urban areas. See chart below for metro specific data.

 

Metro

Listing Price
Growth Y/Y

Time Spent on
Market Y/Y

Inventory Growth
Y/Y

Home Shopper Count
Y/Y

U.S.

Urban: 7.7%

Suburban: 7.3%

Urban: -8.0%

Suburban: -11.4%

Urban: -34.3%

Suburban: -41.2%

Urban: 50.7%

Suburban: 53.9%

New York-Newark-Jersey City, N.Y.-N.J.-Pa.

Urban: 2.1%

Suburban: 5.6%

Urban: -27.3%

Suburban: -26.9%

Urban: 18.6%

Suburban: -28.0%

Urban: 47.8%

Suburban: 86.4%

Los Angeles-Long Beach-Anaheim, Calif.

Urban: 3.0%

Suburban: 4.4%

Urban: 31.8%

Suburban: -0.8%

Urban: 14.4%

Suburban: -36.1%

Urban: 44.4%

Suburban: 52.1%

Chicago-Naperville-Elgin, Ill.-Ind.-Wis.

Urban: 0.2%

Suburban: 2.4%

Urban: -11.9%

Suburban: -6.2%

Urban: -29.2%

Suburban: -42.8%

Urban: 41.2%

Suburban: 58.0%

Dallas-Fort Worth-Arlington, Texas

Urban: 4.5%

Suburban: 5.6%

Urban: -11.7%

Suburban: -6.5%

Urban: -37.7%

Suburban: -41.9%

Urban: 36.4%

Suburban: 44.8%

Houston-The Woodlands-Sugar Land, Texas

Urban: 4.8%

Suburban: 4.2%

Urban: -4.4%

Suburban: -3.4%

Urban: -12.3%

Suburban: -36.2%

Urban: 30.5%

Suburban: 40.1%

Philadelphia-Camden-Wilmington, Pa.-N.J.-Del.-Md.

Urban: 10.4%

Suburban: 9.8%

Urban: -24.2%

Suburban: -35.1%

Urban: -42.6%

Suburban: -50.2%

Urban: 42.7%

Suburban: 56.4%

Washington-Arlington-Alexandria, DC-Va.-Md.-W. Va.

Urban: 0.4%

Suburban: 4.7%

Urban: -27.9%

Suburban: -36.4%

Urban: -16.0%

Suburban: -53.6%

Urban: 56.2%

Suburban: 59.4%

Miami-Fort Lauderdale-West Palm Beach, Fla.

Urban: -2.2%

Suburban: 0.3%

Urban: 4.5%

Suburban: -5.9%

Urban: -3.9%

Suburban: -20.6%

Urban: 61.7%

Suburban: 71.6%

Atlanta-Sandy Springs-Roswell, Ga.

Urban: 5.0%

Suburban: 8.5%

Urban: -1.3%

Suburban: -7.8%

Urban: -28.9%

Suburban: -48.4%

Urban: 37.9%

Suburban: 45.8%

Boston-Cambridge-Newton, Mass.-N.H.

Urban: -0.4%

Suburban: 6.0%

Urban: -32.1%

Suburban: -32.8%

Urban: 4.0%

Suburban: -43.7%

Urban: 36.8%

Suburban: 48.8%

* In August, prices grew by 7.7% over last year for urban areas and 7.3% for suburban areas, up from 5.4% and 4.1% in March, respectively.

About realtor.com®
Realtor.com® makes buying, selling and living in homes easier and more rewarding for everyone. Realtor.com® pioneered the world of digital real estate 20 years ago, and today through its website and mobile apps is a trusted source for the information, tools and professional expertise that help people move confidently through every step of their home journey. Using proprietary data science and machine learning technology, realtor.com® pairs buyers and sellers with local agents in their market, helping take the guesswork out of buying and selling a home. For professionals, realtor.com® is a trusted provider of consumer connections and branding solutions that help them succeed in today's on-demand world. Realtor.com® is operated by News Corp [Nasdaq: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. under a perpetual license from the National Association of REALTORS®. For more information, visit realtor.com®.

Media Contacts: 
Cody Horvat, cody.horvat@move.com

Cision View original content:http://www.prnewswire.com/news-releases/realtorcom-deurbanization-report-the-grass-is-greener-in-the-suburbs-301138278.html

SOURCE realtor.com

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