- Flight to suburbs real and growing
- More than 50% of nation’s 100 largest metros seeing increased interest in suburbs
Stay-at-home orders spurred by the COVID pandemic have put the brakes on downtown renewal and growth projects. Millennials, and others, are moving to the suburbs.
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Realtor.com reported that home searches in suburban zip codes jumped +13% in May, double the pace of home searches in urban areas. According to Javier Vivas, the director of economic research with realtor.com, “This migration to the suburbs is not a new trend, but it has become more pronounced this spring. After several months of shelter-in-place orders, the desire to have more space and the potential for more people to work remotely are likely two of the factors contributing to the popularity of the burbs.”
More than half of the nation’s 100 largest metros are experiencing a jump in interest in suburban areas. Just look at what’s going on in the New York City area. Contracts on Manhattan apartments plummeted -80% annually while agents working in surrounding suburbs are busier than ever, according to Jonathan Miller of Miller Samuel Appraisals and Douglas Elliman. (High end apartments, +$5M, are getting hit the hardest with contract decreases of -90%.)
Clearly, this flight to the suburbs is fueling new home building throughout the country. Buyers want space inside and outside…buyers want privacy. Buyers don’t want to share things like elevators, lobbies or any contained/closed spaces. Buyers don’t want density.
Stuart Miller, chair and former CEO of Lennar homebuilders, said, “There’s no question that there are people who are fleeing the cities. There’s no question that the second home has been a place of refuge. There’s no question people are rethinking whether they want to be in high rise rentals with common spaces and shared amenities vs. having a home of their own with a backyard.”
Southern Florida is definitely feeling a surge of interest, particularly for stand-alone homes. Contracts for single-family homes priced at $1M+ jumped +_45% y/y in Miami-Dade County while contracts in Palm Beach County jumped +26% and Broward County saw an increase of +23%.
Jonathan Miller, again the CEO of Miller Samuel Appraisals, said that metros like New York City are facing continued budget and service pressures as economies re-open and as workers are allowed/encouraged to work from home or remotely. Miller said, “…you might have people considering living in Florida and working in New York just a couple of times a month.”
The same could be said for living in Arizona or Colorado or New Mexico or Utah and working in San Francisco or Los Angeles just a couple of times a month.
Thanks to realtor.com and CNBC.