The more things change, the more they stay the same. Like people being social animals. Over time, they’re likely to form households. Often, those households produce children.
And after one child, they start thinking about buying a first home. If they’re already homeowners, they’ll start thinking about getting a bigger one.
It’s a natural process, resulting in a gradual move toward the spacious, single-family homes of the suburbs. It just takes life to give them that little extra push. In 2020, the coronavirus pandemic provided an unexpected shove for thousands.
Home shoppers hit the suburbs in record numbers. According to a realtor.com analysis, online views of suburban listings leapt 53.9% between July and August. For searchers in the 10 largest metro areas, that gap widened to 56.4%.
That makes sense. It’s easier to stay 6 feet apart in a single-family home with a big backyard then a crowded townhouse or a downtown condo. Just ask the downtown landlords suddenly hit with vacating renters. They're feeling the pandemic pressure, too.
But this unexpected surge in suburban demand also greatly worsened existing shortages. Despite creating a strong seller’s market, many current suburban homeowners are thinking the same way as the buyers. They have no interest in leaving.
The overall inventory of homes for sale plunged 40.2% in the ‘burbs since May, while falling just 13.4% in urban areas. As a result, suburban list prices in August were up 7.3% from a year earlier. It’s an economic reality. When there’s limited supply, prices spike.
But with interest rates dropping, it’s nearly as affordable to buy today as in 2019, even though prices were lower. And with more companies offering work-from-home plans, many homebuyers have more flexibility to live far away. There's nowhere to go anyway, and they get more for their housing buck.
But it's probably way too soon to count cities out. Urban sales and rentals are likely to rebound once there is a widely available coronavirus vaccine, and folks feel able to fully socialize again.
Younger adults will always be drawn to the vibrancy of the big city. Then, sometime down the road, they’ll form households and have children of their own.
When they do, they’re apt to look around at their living spaces and say; “this really isn’t enough anymore.” And the cycle will repeat, over and over again.