City to Suburb – The Newest Home Buying Trend?
Right after WWII, the suburbs sprung to life as thousands of GI’s took their brides and babies away from the cities where they’d grown up. This new hybrid way of life offered the convenience and sophistication of city life after a short drive, along with the fresh air, trees and grass of the countryside. The steady growth of the suburbs has continued over the years, and now they may be poised for their biggest population boom in decades.
The arrival of the coronavirus earlier this year has upended life as we know it, especially for city dwellers. With so many people packed into a small area, social distancing becomes difficult. Public transportation is problematic and limited capacity means many businesses may not be able to keep their doors open earning reduced revenues. The things so many city dwellers love about their lifestyle have been sidelined by quarantine, including fine restaurants, sports, theater, cultural events and convenient shopping.
The suburbs, with their larger homes, generous lawns and highly rated schools, are set to experience another round of exponential growth. The ability of many companies to have their employees work from home is adding a career flexibility to the mix that hasn’t been available until recently. In addition, buyers can find brand-new homes available immediately for a monthly mortgage payment that is substantially lower than it costs to rent an apartment or purchase an existing small home in a major metro area. Suddenly, the idea of suburban living appeals to many city folks. A recent Harris Poll finds that up to one third of Americans are considering a move to less densely populated areas.
Housing Market Nowcast, the weekly residential housing newsletter of the American Enterprise Institute, has reported a 36% jump in the number of home purchase mortgage rate locks for non-urban properties between May 18th and June 15th from the same period a year ago. The National Association of Realtors weekly report also tells a tale. The purchase of condos, traditionally champion performers in high-density population areas, has dropped significantly.
The chief economist at NAR, Lawrence Yun, provides this insight. “Relatively better performance of single-family homes in relation to multifamily condominium properties clearly suggest migration from the city centers to the suburbs. After witnessing several consecutive years of urban revival, the new trend looks to be in the suburbs as more companies allow greater flexibility to work from home.”
Many realtors report increased interest in suburban homes among those living in closer quarters in city centers. This leads us to the next point – higher demand will place increased stress on the market for single-family homes in established suburban neighborhoods. Before coronavirus hit, there were already fewer homes available than families seeking to buy them. This reduced inventory, married with continuing lower interest rates, makes the current housing market extremely competitive. For those of you who have been considering a move and put your plans on pause to “wait out” the pandemic, tapping the brakes could have an unexpected result. The fewer houses there are on the market, the higher the selling price is likely to be. Some potential sellers have pulled their offerings from the market, and are unlikely to jump back into the fray until the current disquiet settles down.
However, as the virus headcount continues to surge, it’s becoming clear that Americans are less likely to face future shut-downs than they are to see modified ways of “living a normal life”. As we learn to live with the restrictions of life in the COVID-19 era, more and more buyers will speed up their plans to move, decreasing the already limited availability at a rapid pace. Until a hefty number of sellers decide to re-enter the market, the longer buyers wait to find their dream home, the less likely they are to find the house they need at the price they want to pay. Glenn Kelman, CEO of Redfin, one of the country’s most successful real estate brokerage companies, makes a prediction for the upcoming months. “We’re set up this summer for the mother of all bidding-war seasons, at least in these outlying areas. There’s nothing to sell, and there are so many people who want to buy. They’re emboldened by the stock market and the low rates.”
Unlike other sellers, home builders are continuing to offer a steady stream of options to fill the growing need for single-family dwellings. Home builders have adapted readily to the “new normal” of the post-coronavirus home buying process. At Ernest Homes, we’ve been working throughout the crisis, using modern technology to offer virtual tours, scheduling private appointments, conducting meetings online and following the enhanced cleaning protocols recommended by medical experts. This careful attention to the safety and protection of our clients, vendors and staff has allowed us to be here to serve the needs of those seeking new construction in Savannah GA and the surrounding area. Intrigued? Call our Sales Team today at 912-660-9673 or send us an online inquiry today!