SEATTLE, Feb. 4, 2021 /PRNewswire/ -- Mid-sized markets --
especially those across the Midwest -- are making up for softness
in New York and San Francisco, keeping the for-sale market in
urban areas on pace with or slightly ahead of red-hot suburban
areas, a new Zillow analysis shows.[i]
Housing demand is on fire as the explosion of remote
work has caused many to reimagine what and where they want
their home to be. That demand is supercharging home values in
affordable areas of the country as buyers look for homes that offer
more room to spread out. In expensive coastal markets, that
typically means moving farther from the downtown core into the
suburbs. But for much of the country, the suburbs have long been
more expensive, and buyers are now searching for homes in more
urban areas.
The Midwest region in particular, where the typical home value
is less than other regions in the U.S., has seen urban home value
growth accelerate ahead of the suburbs in recent months. In metros
such as St. Louis, Cincinnati, Cleveland, Kansas
City, Columbus and
Indianapolis, urban home values
have been growing faster than those in the suburbs for at least the
past several months.
In more expensive housing markets, demand for affordable homes
has led to booming home value growth in the suburbs relative to
urban cores. New York,
Washington, D.C., Atlanta, Boston, San
Francisco, Seattle and
Denver experienced stronger home
value growth in the suburbs for all or part of 2020.
"The for-sale housing market is experiencing a pandemic-fueled
surge in both urban and suburban areas," says Zillow economist
Alexandra Lee. "Home has become more
important than ever, and buyers are eager to hit the market to find
their next place to live, many newly freed from their commute and
suddenly finding themselves in need of more space for a home office
or gym. More often than not, buyers are flocking to homes in
affordable areas and pushing up prices. However, there have been
some sharp downturns in the rental market as demand to rent in
pricey areas like San Francisco
and New York plummeted, at least
temporarily."
At the national level, buying in the suburbs became more
competitive in the fall, trending slightly hotter than urban areas
in some measures including shorter time on market and a higher
share of homes selling above list price. Days on market are
historically low across the board, helping to increase sales
volume, but homes are moving faster in the suburbs. Suburban
listings were selling four days faster than those in urban areas in
August, and by December the gap had widened to 10 days.
Still, high demand drove urban areas to keep pace as home value
and sales price growth, sales volume and Zillow web traffic matched
or exceeded the suburbs on a national basis. Home values grew at a
nearly identical rate in urban and suburban areas last year -- 8.8%
and 8.7%, respectively. The share of page views on listings on
Zillow in urban areas was slightly higher in December 2020 (18.1%) than December 2019 (17.6%),[ii] indicating interest in
urban homes has remained steady.
While the for-sale market soared, rent growth was stunted in
2020, slowing from 3.5% annual price growth in 2019 to 0.8% last
year. But suburban rents accelerated during the pandemic -- since
February, annual rent growth has swelled from 3.8% to 5.2% in the
suburbs. Urban rent growth fell from 3.6% to 1.5% during the same
period.
It remains to be seen what the impact will be of local economies
fully opening up and some workers who had been working remotely
returning to offices at least part-time. Zillow economists expect a
bounceback for urban rents this year as vaccine distribution
continues and local economies kick back into gear. A record number
of adults lived with their parents in April as nearly 3
million Americans -- mostly from Generation Z -- moved back home as
the pandemic hit. A majority of 18-25 year-olds rent, and nearly
half of those rent in urban areas, suggesting many of those who
moved home will return to cities when amenities reopen, they feel
it is safe and they are financially able to do so.
A panel of economists surveyed by Zillow expects the COVID-19
pandemic to have a lasting impact on some home buyer preferences,
including boosted demand for suburban living and homes in
"secondary cities."[iii] The panel also largely expects overall
rent growth to recover to pre-pandemic levels within the next two
years -- 11% of respondents predict annual rent growth will reach
4% this year, 33% think it will reach that mark next year, and 29%
think it will have rebounded by 2023.[iv]
Metro
Area*
|
2020 Home
Value
Growth - Urban
Areas
|
2020 Home
Value
Growth -
Suburban Areas
|
2020 Rent
Growth
- Urban Areas
|
2020 Rent
Growth
- Suburban Areas
|
United
States
|
8.8%
|
8.7%
|
1.5%
|
5.2%
|
New York,
NY
|
3.3%
|
8.8%
|
-7.8%
|
5.7%
|
Los Angeles,
CA
|
9.5%
|
9.4%
|
0.4%
|
3.6%
|
Chicago,
IL
|
6.2%
|
5.8%
|
-0.3%
|
3.9%
|
Dallas-Fort Worth,
TX
|
8.9%
|
7.6%
|
0.9%
|
4.7%
|
Philadelphia,
PA
|
12.2%
|
9.1%
|
3.3%
|
3.3%
|
Houston,
TX
|
5.8%
|
6.3%
|
-0.5%
|
3.7%
|
Washington,
DC
|
6.7%
|
7.9%
|
-3.7%
|
2.7%
|
Miami-Fort
Lauderdale, FL
|
6.7%
|
7.3%
|
2.3%
|
4.0%
|
Atlanta,
GA
|
5.2%
|
9.3%
|
1.1%
|
8.5%
|
Boston, MA
|
7.5%
|
9.9%
|
N/A
|
N/A
|
San Francisco,
CA
|
5.6%
|
7.9%
|
-7.7%
|
0.7%
|
Detroit,
MI
|
11.3%
|
9.5%
|
5.3%
|
5.0%
|
Riverside,
CA
|
11.9%
|
10.2%
|
3.0%
|
9.3%
|
Phoenix,
AZ
|
17.2%
|
14.9%
|
7.6%
|
9.8%
|
Seattle,
WA
|
11.1%
|
13.5%
|
-4.4%
|
4.3%
|
Minneapolis-St. Paul,
MN
|
7.6%
|
7.5%
|
-0.8%
|
3.2%
|
San Diego,
CA
|
13.1%
|
12.3%
|
3.4%
|
4.4%
|
St. Louis,
MO
|
11.6%
|
8.2%
|
6.8%
|
4.9%
|
Tampa, FL
|
14.1%
|
11.3%
|
6.0%
|
7.5%
|
Baltimore,
MD
|
8.6%
|
7.5%
|
5.5%
|
3.6%
|
Denver, CO
|
7.2%
|
8.5%
|
0.3%
|
2.3%
|
Pittsburgh,
PA
|
11.1%
|
8.3%
|
0.1%
|
5.6%
|
Portland,
OR
|
9.6%
|
9.5%
|
3.7%
|
5.3%
|
Charlotte,
NC
|
10.1%
|
10.3%
|
6.0%
|
6.5%
|
Sacramento,
CA
|
11.4%
|
11.0%
|
5.2%
|
8.2%
|
San Antonio,
TX
|
6.4%
|
5.7%
|
2.7%
|
4.4%
|
Orlando,
FL
|
8.3%
|
7.7%
|
2.8%
|
2.9%
|
Cincinnati,
OH
|
15.5%
|
11.1%
|
5.1%
|
4.6%
|
Cleveland,
OH
|
16.5%
|
10.1%
|
7.7%
|
8.1%
|
Kansas City,
MO
|
18.2%
|
9.6%
|
4.5%
|
6.1%
|
Las Vegas,
NV
|
7.4%
|
7.8%
|
5.4%
|
7.1%
|
Columbus,
OH
|
14.5%
|
10.2%
|
2.0%
|
4.6%
|
Indianapolis,
IN
|
18.3%
|
9.9%
|
8.0%
|
7.2%
|
San Jose,
CA
|
13.9%
|
13.3%
|
-4.9%
|
-7.0%
|
Austin, TX
|
14.2%
|
13.2%
|
-3.0%
|
1.5%
|
Virginia Beach,
VA
|
9.4%
|
8.2%
|
7.0%
|
5.7%
|
Nashville,
TN
|
10.5%
|
8.6%
|
1.5%
|
2.7%
|
Providence,
RI
|
13.7%
|
10.4%
|
N/A
|
N/A
|
Milwaukee,
WI
|
12.1%
|
9.9%
|
1.3%
|
N/A
|
Jacksonville,
FL
|
10.5%
|
8.1%
|
7.1%
|
6.7%
|
Memphis,
TN
|
13.5%
|
10.6%
|
6.7%
|
13.1%
|
Oklahoma City,
OK
|
9.2%
|
6.9%
|
N/A
|
5.1%
|
Louisville,
KY
|
10.8%
|
8.6%
|
5.2%
|
4.2%
|
Hartford,
CT
|
9.2%
|
8.4%
|
N/A
|
N/A
|
Richmond,
VA
|
7.2%
|
7.4%
|
4.1%
|
4.6%
|
New Orleans,
LA
|
5.3%
|
6.5%
|
N/A
|
N/A
|
Buffalo,
NY
|
12.9%
|
10.1%
|
N/A
|
N/A
|
Raleigh,
NC
|
7.8%
|
6.9%
|
2.8%
|
3.7%
|
Birmingham,
AL
|
16.2%
|
8.7%
|
N/A
|
4.7%
|
Salt Lake City,
UT
|
13.1%
|
13.7%
|
N/A
|
N/A
|
*Table ordered by
market size
|
About Zillow Group
Zillow Group, Inc. (NASDAQ: Z
and ZG) is reimagining real estate to make it easier to unlock
life's next chapter.
As the most-visited real estate website in the U.S., Zillow® and
its affiliates offer customers an on-demand experience for selling,
buying, renting or financing with transparency and nearly seamless
end-to-end service. Zillow Offers® buys and sells homes directly in
dozens of markets across the country, allowing sellers control over
their timeline. Zillow Home Loansâ„¢, our affiliate lender, provides
our customers with an easy option to get pre-approved and secure
financing for their next home purchase. Zillow recently launched
Zillow Homes, Inc., a licensed brokerage entity, to streamline
Zillow Offers transactions.
Zillow Group's affiliates and subsidiaries include Zillow®,
Zillow Offers®, Zillow Premier Agent®, Zillow Home Loans™, Zillow
Closing Services™, Zillow Homes, Inc., Trulia®, Out East®,
StreetEasy® and HotPads®. Zillow Home Loans, LLC is an Equal
Housing Lender, NMLS #10287 (www.nmlsconsumeraccess.org).
[i] According to Zillow data. Movements in year-over-year
changes since February 2020 in
metrics were examined for both urban and suburban areas to examine
how each have potentially differed during the coronavirus pandemic.
This approach is used to control for differences in urban and
suburban conditions that may have existed pre-pandemic. The
classification of areas as urban or suburban was done at the ZIP
code level and was derived from a nationwide Trulia survey. That
methodology is published here:
http://jedkolko.com/wp-content/uploads/2015/05/Data-and-methodological-details-052715.pdf
[ii] Including all page views of for-sale homes on Zillow.com
and the Zillow app, excluding those from real estate agents and
other professional users. Daily figures were calculated using a
seven-day trailing average. Year-over-year comparisons were made
after offsetting 2019 data by two days in order to compare
consistent days of the week.
[iii] This edition of the Zillow Home Price Expectations Survey
surveyed 104 experts between August 17,
2020 and September 1, 2020.
The survey was conducted by Pulsenomics LLC on behalf of Zillow,
Inc. The Zillow Home Price Expectations Survey and any related
materials are available through Zillow and Pulsenomics.
[iv] This edition of the Zillow Home Price Expectations Survey
surveyed 113 experts between November 23,
2020 and December 8, 2020. The
survey was conducted by Pulsenomics LLC on behalf of Zillow, Inc.
The Zillow Home Price Expectations Survey and any related materials
are available through Zillow and Pulsenomics.
View original
content:http://www.prnewswire.com/news-releases/how-midwest-cities-are-busting-the-urban-exodus-myth-301222076.html
SOURCE Zillow