Over the past two years, the big story in the real estate world has been the movement from cities to the suburbs. While the alleged mass exodus from cities was in many cases overreported, prices in the ‘burbs began outpacing home values in urban areas in mid-2021 for the first time in close to a decade.
But as we approach the hump of 2022, we’re seeing that trend begin to reverse. Let’s check back in on the central real estate drama of the pandemic: where (and how) do people want to live?
- Firstly, the suburbs are still very hot. In fact, all ten of Zillow’s top ten hottest housing markets are high-end suburbs outside major cities. People still want more square footage, leafy streets and outdoor space, but seem to be keeping themselves within striking distance of the city.
- With that said, demand may be moving back towards the cultural hotspots as bargains in the ‘burbs dry up after months of price escalation. Since the beginning of the year, the gap in home price growth between cities and suburbs has been narrowing every month.
- That’s especially true in metros like Seattle and New York where prices for homes near the city centers have always been more expensive than in the surrounding residential areas. In those places, the suburbs are still seen as subprime and home values are growing much faster in the heart of the city.
Market forces are one thing, but the other question is cultural. People in the suburbs live very different lives from their urban counterparts, which is a reality that many former city-dwellers are waking up to on the quiet cul-de-sacs they bought into during the pandemic. Is all that extra space worth sacrificing the benefits of proximity, diversity and dynamism that made cities the most attractive living destinations over the last several decades? With both reaching price peaks simultaneously, an honest answer to that age-old question may be at hand.
Read more at Zillow: Demand May Be Shifting Back to City Centers