Could the COVID swing to rural areas be over? Are cities resurgent again?
October Redfin data points to the biggest jump in homebuyer interest for major metro areas this year. Pageviews of homes in large metro areas, which include city suburbs, were up 200% in October year-over-year. According to a report by Redfin, that represents the biggest annual increase this year since metro areas started stagnating in March and April.
While redfin searches for homes in rural areas are still up well over 200% since last year, we’re seeing a deceleration in rural interest. Searches in rural areas hit a year over year increase high of 273% in August, but this dropped to 235% comparing October of 2019 to 2020.
“Rural areas and small towns remain desirable - especially for families who need space to accommodate remote work as the pandemic persists - but record-low mortgage rates are motivating people to search in cities, too,” said Redfin chief economist Daryl Fairweather. “Many buyers are crossing their fingers that restaurants, bars and shops may be bustling again in the next year or so, and they’re looking to invest in the eventual resurgence of cities.”
While interest may be growing for cities, the impacts of a preference shift to rural areas and suburbs is still very much visible in Redfin data. The median home-sale price in rural areas nationwide is up 18.3% from last year to over $300,000 in the four-week period ending November 08. This is the biggest increase and highest median sale price since Redfin began measuring this data in 2017.
Suburban areas saw a 14.3% year over year increase in the same period while median sale prices in urban areas increased by 15.6% to medians of $331,500 and $289,000 respectively.
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Supply shortage, too, is more severe in rural and suburban neighborhoods than in cities. Supply in rural areas has dropped 40.9%, supply in suburbs has dropped 31.9%, and supply in urban areas has only dropped 14.5% year over year.
One Redfin real estate agent said that now, some buyers are seeing new opportunities back in cities.
“While life in the city has changed during the pandemic, with empty sidewalks and boarded-up storefronts becoming the norm, some buyers are looking long-term and realizing it’s possible to buy a condo for a 2017 price without competition,” said Jessie Culbert Boucher, a Redfin real estate agent in Seattle. “If they hold on to it for five years, they’ll likely ride out the current downturn, make money and enjoy the return of vibrant city life.”
