Since shortly after the COVID-19 pandemic began spreading across the country, the real estate industry has warned of an “urban exodus” as homebuyers fled densely populated urban areas in favor of the suburbs and rural areas.
However, new data from Redfin suggests that Americans haven’t given up on cities yet — on the contrary, pageviews of homes in large metro areas — which encompass cities and their suburbs — soared 200 percent between October 2019 and this past October. That jump is the largest annual increase for searches in urban areas this year, according to the Redfin data.
Meanwhile, pageviews of homes in rural areas also increased by 235 percent from the previous year. That figure, however, marks a deceleration from when home searches in rural areas peaked at an annual increase of 273 percent in August, an indication that interest in rural areas may be waning. Similarly, interest in small towns also appears to be declining. Pageviews for homes in small towns were up 233 percent year over year in September, but decreased to 218 percent year over year in October.
Credit: Redfin
Daryl Fairweather | Credit: Redfin
“Rural areas and small towns remain desirable — especially for families who need space to accommodate remote work as the pandemic persists — but record-low mortgage rates are motivating people to search in cities, too,” Redfin Chief Economist Daryl Fairweather said in a statement. “Many buyers are crossing their fingers that restaurants, bars and shops may be bustling again in the next year or so, and they’re looking to invest in the eventual resurgence of cities.”
Across rural, suburban and urban areas, prices are up nationwide. In rural areas, the median home sale price increased 18.3 percent year over year to $300,000 in the four weeks ending November 8. This is the largest increase and highest median sale prices for these areas seen since Redfin started tracking the data in 2017.
In suburban areas, prices saw a record increase of 14.3 percent year over year, to $331,500. Urban areas also experienced record growth of 15.6 percent, to $289,000.
Urban areas are the only neighborhood type that saw price growth decline at the height of the pandemic’s uncertainty. In May, price growth decreased 3.5 percent year over year in urban areas, whereas prices increased 1.6 percent in the suburbs and 3.2 percent in rural areas.
Still, for patient buyers who are willing to wait out the course of the pandemic, the rewards may be significant once city life returns to normal.
Jessica Culbert Boucher | Credit: LinkedIn
“While life in the city has changed during the pandemic, with empty sidewalks and boarded-up storefronts becoming the norm, some buyers are looking long-term and realizing it’s possible to buy a condo for a 2017 price without competition,” Jessie Culbert Boucher, a Redfin agent in Seattle, said in Redfin’s report. “If they hold onto it for five years, they’ll likely ride out the current downturn, make money and enjoy the return of vibrant city life.”
Total home sales were up 11.4 percent on an annual basis in rural areas during the four weeks ending November 8. In suburban areas they were up 15.4 percent, and in urban areas they were up 9.3 percent.
Likewise, annual pending sales were up across the board: 37.4 percent in rural areas, 36 percent in suburban areas and 26.1 percent in urban areas.
Although demand continues to reach new heights, low inventory is an ever-present issue, with inventory down 40.9 percent in rural areas, 31.9 percent in suburban areas and 14.5 percent in urban areas year over year during the four weeks ending November 8.
