- Median home prices in rural and suburban areas rising faster than in cities
- Price growth higher in rural areas than in cities or suburban areas, according to Redfin
- According to Redfin, home sales declines in urban areas more significant than in suburban/rural areas
Since the COVID-19 pandemic outbreak, interest about moving from urban areas to less densely areas with more indoor and outdoor space has been little more than speculative. Now, hard data is replacing anecdotal speculation.
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A new study by Redfin indicates that the housing market is hottest in less densely populated areas. According to Redfin economist, “ Now we’re seeing concrete evidence that rural and suburban neighborhoods are more attractive to homebuyers than the city, partly because working from home means commute times are no longer a major factor for some people. And due to historically low mortgage rates, interest is turning into action…right now the pendulum is swinging toward farther-flung places.”
Prior to the COVID pandemic, 37% of people were searching for homes in urban areas; now, 19% are looking in urban areas. Prior to the pandemic, 43% of people were searching for a home in a suburb whereas now, 50% of people are searching in suburbs. Before the pandemic, 9% of people were searching for a home in a rural area; now, 19% are searching in rural areas. As importantly, 59% of people participating in this latest Redfin survey said they were searching for a home in the same type of area as they were prior to the pandemic.
Not only are an increasing number of people searching for homes elsewhere, 21% of homebuyers want two things – a designated place to work with ample Wi-Fi and more outdoor space.
During the four weeks ending August 2, home sales in rural settings were flat (-0.9%) compared to last year. Home sales in suburban areas dipped -4.7% while home sales in urban areas decreased -8.9%. Pending home sales were +6.3% in rural areas, +9.1% in suburban settings and +5.6% in urban areas.
Demand is outpacing supply in rural and suburban areas with new listings dropping -14.2% y/y in rural areas and -3.6% y/y in suburban areas. New listings in urban areas were relatively flat at +0.5% y/y.
Median home sale prices increased the most year-over-year in rural areas by +11.3%, by +9.2% in suburban areas and +6.7% in urban areas. Median home sale prices in urban, suburban and rural areas nationwide as of August 2 looked like…
- Rural areas – $286,750 – +11.3% y/y
- Suburban areas – $322,900 – +9.2% y/y
- Urban areas – $275,863 – +6.7% y/y
Thanks to Redfin and Mansion Global.