Some things are counterintuitive. People think something’s going to happen a specific way, then they start making predictions, in-person and all over social media. The next thing you know, people start accepting it as truth.
One problem with this rumor mill, though, is that unproven narratives often turn out to be false, as is the case with the COVID-19 housing market narrative suggesting that the suburban housing market is booming, because people are desperate to escape the more densely populated, virus-laden areas.
Zillow’s recent housing report shows the 2020 housing trends through June of this year. The data shows that housing sales are proportionally similar to recent years in both urban and suburban areas. Both areas are strong seller’s markets at the moment, in fact.
The Zillow report also highlighted some comparative analysis between the two markets, noting among other things,
“…suburban markets and urban markets have seen similar changes in activity in recent months: About the same share of homes selling above their list price, similar changes in the typical time homes spend on the market before an offer is accepted, and recent improvements in newly pending sales have been about the same across each region type.”
Austin Realtor, Jordan Wade, with Luisa Mauro Real Estate, confirmed that this report rings true in the central Texas market.
“Our urban sales for 2020 are proportionately similar to years past. When the initial lockdowns went into effect earlier this year, I thought it would negatively impact the overall market with reduced sales, but that’s just not the case. We have clients regularly contacting us looking to purchase in central Austin as well as the suburbs. Both urban and suburban markets are going strong.”
The Zillow report delves deeper into the housing market specifics. While overall, the market demands in urban and suburban areas stayed consistent with last year’s percentages, some smaller trends in 2020 appear to be a continuation of 2019 buying trends. Among those continuing trends, for-sale homes in suburban areas receive about three times as much traffic as downtown listings, yet interest in single-family homes has stayed about the same as last year, too.
Markets in the major metro areas, such as New York and San Francisco, are the exceptions. Each of these historically desirable market areas have seen drops in home values (4.2% and 4.9%, respectively), with houses staying on the market up to two months longer than previously, and more new listings for sale in urban areas.
However, this is not true of other major cities: Miami, Los Angeles, Seattle, and Washington, D.C. It’s worth keeping an eye on these trends in upcoming months.
As Wade concludes, “We’re keeping our eye to the future as we learn about long-term effects of the pandemic, with more people working from home. That may eventually mean people will be looking for more square footage than a downtown condo can provide. However, we’re not seeing that yet.”
If we’re counting the lessons that 2020 is teaching us, perhaps we can include that things can change quickly, and things are not always what they seem. It makes sense to slow down, study the data, and reassess our assumptions. Things still may change, of course. They always do, after all, though not always how we predict they will.