City Living — Back by Popular Demand
A surge of homebuyers fled cities during the pandemic, seeking suburban and rural communities where larger homes and sizable lots provided space for families to stretch out, work and play in a socially distanced environment. Many who could not previously afford a home in the city found they could afford to buy in outlying areas.
Now, that trend is reversing itself. According to real estate platform redfin.com, page views for listings located in metro areas with populations over 1 million increased in March 2021 by more than 60 percent over March 2020.
Cities are where the jobs are. As lockdowns and mask mandates have lifted and vaccinations have become widely available, the wheels of commerce are turning again. While some have embraced a new, remote work lifestyle, others are eager to return to the office, and kids are keen to get back to their friends and classrooms.
In large cities like San Francisco and New York, home inventory was already a problem pre-pandemic, compounded further by low interest rates. The exodus away from these dense urban centers caused their markets to slow last year, with homes remaining on the market longer and even selling below the list price. There is now more available inventory for buyers seeking to return, and some relatively good deals to be found.
Meanwhile, inventories have tightened and prices have increased in suburban areas where demand was high last year.
Smaller cities are gaining traction too, like Charlotte, North Carolina, where online lender better.com reported that the number of mortgage applications during the first quarter of 2021 increased by 466% year-over-year.
The same source reported that these cities are also seeing a huge increase in the number of mortgage applications: Houston (a 190% increase year-over-year), Austin (up 120%), Chicago (up 109%) and Atlanta (up 101%).
Buyer demand is currently focused on urban, single-family housing. The trend appears to stem from the re-scripted American Dream — one derived from a year spent reassessing the values of home and family, alongside the pros of living near commerce and culture.
According to Redfin economist Taylor Marr, “Many homebuyers are still prioritizing features that were desirable at the beginning of the pandemic, like space for a home office or a big backyard, partly because many people plan to continue working from home. But as people venture out of their homes more often, they’re rediscovering the advantages of living in a city. People want to continue barbecuing in the backyard, but they also want the option of turning off the grill and walking to their local pizza place.”
There is now one question on many minds: Is this a good time to buy in the city? Christian Wallace, head of real estate at better.com, opined, “In some urban areas there’s still an amount of inventory. There’s no better time to buy.”
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