Since the lifting of the initial, harshest restrictions that kept people at home as a result of the COVID-19 pandemic, the housing market has seen an influx of homebuyer interest in the suburbs. Whether people were longing for more space, privacy or access to the outdoors, real estate experts say homes are being snapped up outside major urban centers.
Should you follow suit and move to the suburbs? Here’s what to know about this real estate trend, and if the benefits of suburban living might appeal to you:
— Suburban real estate sees a push.
— The pandemic accelerated an existing trend.
— The benefits to living in the ‘burbs.
— Why cities will stick around.
[Read: A Checklist for Moving to Your New Home]
Suburban Real Estate Sees a Push
When the economy began to open up following the initial wave of shelter-in-place orders across the U.S., pent-up demand was released on the housing market. The number of existing home sales rose back to pre-pandemic levels (and above) by July, according to the National Association of Realtors, and home prices never saw any significant drop.
While buyer activity has increased everywhere, it has been largely focused in more suburban areas.
In a report on suburban versus urban homebuying published in September, realtor.com reported that in the 10 largest metro areas in the U.S., median home listing prices in the suburbs have risen faster than in urban areas — a 5.2% increase in the suburbs compared to just 2.4% in urban areas.
New construction permits in many housing markets are concentrated on suburban development, says Jadon Newman, CEO of Noble Capital, a private equity firm that specializes in lending to real estate investors for house flipping and new construction homes, based in Austin, Texas. New construction is even reaching beyond the suburbs of a major city to what’s referred to as the exurbs, or as Newman describes them, “the suburbs of the suburbs.”
Many real estate agents in cities such as Los Angeles, Seattle and Chicago are seeing increased interest from apartment dwellers who are looking for more space to work from home, as well as learning spaces for school-age kids and enough room for everyone to spend their time.
“What COVID has done is sped up the buying process for a lot of these high-income-earning tech workers who are in their apartment in downtown Seattle who think, ‘I want to have a yard.’ And it doesn’t even have to be a big yard,” says Paul Hurme, president of TeamBuilder KW, a part of Keller Williams Realty in the Seattle area.
[Read: The Guide to Making and Accepting an Offer on a Home]
The Pandemic Accelerated an Existing Trend
Moving from the city to the suburbs isn’t a new concept. It’s a shift in mindset that goes back generations, in which people desire larger homes, more space and more choice in education when their children reach school age. Not everyone gets the same itch to move from downtown to the suburbs, but it’s a common enough occurrence.
Due to the global pandemic, even more people who hadn’t yet planned to leave the city are considering the benefits of more space and a lower cost of living while commutes are nonexistent for many people working remotely.
“The demographic for people that are moving out (to the suburbs) were looking to move anyway — they maybe just hastened that timeline,” says Angela Ferrara, executive vice president of sales and leasing for the Marketing Directors, a residential development advising company based in New York City.
What appears to be an explosion of homebuyer activity is the result of circumstances brought on by the pandemic. Newman explains: “It’s a combination of the pent-up demand from the 90 days at the start of the pandemic (when real estate activity virtually froze) … and it’s also people being nudged forward enough to make some of those big changes, from career changes to picking up and moving out of state.”
The Benefits of Living in the ‘Burbs
Suburbia has drawn people out of crowded city centers for generations as people seek the ideal living situation for them, and those benefits are hard to ignore. Here’s a quick breakdown of the benefits of living in the suburbs:
— More space.
— Lower cost of living.
— Easy outdoor access.
More space. After months at home in tight quarters, many couples and families are looking to spread out in single-family houses that offer more square footage.
Lower cost of living. Not every suburb is cheap, but you’re likely to find new ways to save if you expand your home search to the suburbs. You can find lower rent and lower monthly mortgage payments, and you can cut some costs like parking. Of course, if you don’t already have a car, factor in the additional cost of payments, insurance and maintenance on a vehicle.
Easy outdoor access. By forcing people to remain at home for extended periods of time, the COVID-19 pandemic has reminded many people that getting outside is necessary, whether it’s to exercise, get some sun or simply breathe fresh air. While some apartments and townhouses in the city have balconies, small backyards or rooftop common areas, the possibility of sizable outdoor space draws many to suburban life.
[Read: How to Vet a Neighborhood Before Moving.]
Cities Will Stick Around
While some urban city centers may be experiencing a buyer’s market with more supply than demand, there’s no indication that cities will see massive population declines. Ferrara says that while there are fewer active buyers in Manhattan right now, that doesn’t mean deals aren’t happening; plenty of buyers are still seeking condos, co-ops and townhouses.
Throughout the summer, properties in urban areas sold 8% faster than during the same time in 2019, according to realtor.com. The speed of sale for suburban properties was even faster at 11.4% compared to 2019, but realtor.com notes both numbers are unprecedented.
For the people who left cities for fear of greater infection rates, the chances of those moves being permanent once the pandemic subsides are low, and many have already returned to their city homes, Ferrara says. “I feel like those moves are really temporary,” she says.
Depending on the closest major city to you, you may be able to achieve a suburban feeling without sacrificing the city address. For example, in Chicago the neighborhoods beyond the central business district have many single-family houses, complete with a small front and backyard, explains Maurice Hampton, president of the Chicago Association of Realtors and owner and managing broker of Centered International Realty Corp. in Chicago.
“I particularly live in a community where we’re in the city of Chicago but it’s very suburban. It’s a very town-feeling community,” Hampton says.
Finally, trends in homebuyer preferences are cyclical, just as in the overall real estate market. The current trend that leads people to the suburbs has been accelerated, and maybe amplified, by the pandemic, but financial struggles in the Great Recession amplified the desirability of cities because young professionals wanted to live close to the greatest number of job opportunities.
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Should You Move to the Suburbs? originally appeared on usnews.com
