Affordability in less dense places and buyer preferences for larger homes have led to more action in outlying counties.
Housing Demand in Outlying Counties is Key Market Indicator
Homebuyers have been making home buying choices based upon affordability, preferences for living in larger houses to accommodate both living and remote working, and preferences for living in less densely populated areas.
Likewise, Millennials who are forming households with children as they become “prime home buying age” are choosing to live and raise their families in outlying counties.
The result, as of August 2021 according to the latest data from the National Association of Realtors® (NAR), is that “housing demand is dispersing outwards from the central counties of metropolitan or micropolitan areas to outlying counties.”
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Comparative Market Stats
NAR indicates that both outlying and central counties have been performing well compared with pre-pandemic market conditions (February 2020.)
That said, NAR indicates that outlying counties have been outperforming central counties as of August 2021. Take a look:
Central Counties Outlying Counties
2/20-2/21 2/20-2/21
Med. List Price $264,500-$299,450 $260K-$311,225
y/y% Change 6.0% – 6.7% 7.5% – 10.0%
Y/Y Sq’ Change 5.5% – 13.8% 3.9% – 16.2%
Med Sq ‘ 1,880 – 1,837 1,940 – 1,877
DOM 79 37 78 35
DOM % Change -9.1% – 29.5% -6.3%-30.2%
# of Listings 451 264 264 159
% Change of Listings -17.1% – -22.5% -14.7 –19.9%
Faster Price Appreciation in Outlying Counties
As of August 2021, the median listing price in outlying counties increased +10% y/y. The median listing price in central counties increased +6.7%. In fact, the median list price in outlying counties came in at $311,225 in August compared with $299,450 in central counties.
Fewer Days on the Market in Outlying Counties
Overall, days on the market decreased in both outlying and central counties compared with one year ago however, DOM in outlying counties registered at 35 days while central counties registered DOM at 37 days.
Higher Ratio of Pending Listings to Active Listings in Outlying Counties
There were 1.4 pending listings per active listings in outlying counties compared with 1.2 in central counties as of August 2021. Pending listings, as you know, are a good indicator of demand relative to supply.
Meanwhile, active listings were down in both outlying and central counties in August 2021 compared with one year ago.
Affordability A Major Driver of Housing Demand
Generally, home prices in outlying counties have been less expensive than in central counties. During August 2021, the median list price in outlying counties increased at a faster rate than prices in central counties, save Chicago.
This makes sense because more affordable home prices generally increase faster than less affordable home prices.
Just a couple of examples here:
- In San Francisco, the median list price is down -7.4% (much improved from the onslaught of the pandemic, however) primarily because its workforce is heavily concentrated in tech jobs…and 50% of all tech workers are working remotely.
- Contra Costa County median price +11.4%
- Alameda County median price +8.4%
- In the District of Columbia, the median list price in August 2021 was down -14.3%. However median list prices in outlying counties were strong.
- Stafford VA – +15.8%
- Frederick MD – +11.4%
Thanks to the National Association of REALTORS®.
