Will Urban Dwellers Move to the Suburbs Because of Coronavirus?
There has been talk that COVID-19 could permanently change the housing market in the U.S. The thought was that people would be moving out of cities because they are afraid of crowded conditions leading to spread of future pandemics. At the same time, there was also speculation that the pandemic could lead to a surge in demand for housing in the suburbs so people could still work in cities but would not have to live there. This would cause home prices in the suburbs to disproportionately rise to keep up with the demand. However, early indications are that this forecasted trend may not be happening.
Surveys Are Split on People's Housing Preferences
There are some signs that the recent trend of Americans preferring urban living may endure even through COVID-19. In April 2020, even after the start of the pandemic, 70% of Americans wanted to live in an area that was equally or more urban than the area in which they currently lived. This survey was taken during the height of the pandemic, showing that even COVID-19 has not dented Americans' aspirations to live in the city.
However, there are conflicting surveys that show that urban dwellers have considered moving out to the suburbs after the pandemic. Real estate websites such as Zillow and Realtor.com report increased web traffic from people in urban areas. This trend is even more pronounced among younger city dwellers.
People Still Have Reasons for Wanting to Stay Urban but it All May Change
Right now, the stories of people either leaving cities or wanting to exit are still anecdotal. They have not showed up in data that measures population trends or even sentiment about where people want to live. However, it is important to know that we have just begun to live in the pandemic world. We simply do not know how COVID-19 will continue to materialize and the changes to everyday life that may be necessary because of the pandemic. If COVID-19 remains with us for some time to come, people may develop a fear of being in more crowded areas and the predicted migration to the suburbs may materialize. However, this could also turn out to be a temporary situation if there is an effective vaccine in the future.
In addition, changes in the way that we work after COVID-19 may also shift the balance between urban and suburban housing. It is currently uncertain whether the world will return to in-person work as if nothing ever happened or if workers will have more freedom to work from home. If the latter is true, more people may feel as if they have the freedom to live anywhere, depressing the demand for urban housing. If people feel that they have the flexibility to work wherever they want, it suddenly would not matter where they lived.
While not yet backed up by the numbers, the post-pandemic world could lead to more suburban living. If people are able to keep working from home, their needs when it comes to space may change. Many people will need at least one additional bedroom for their home or other space that can be made into an office. This is more difficult to procure in the city, where extra space comes at a steep premium. Without the need to commute as often to the city and requiring a larger home, people may find suburban properties to be more attractive.
Another factor that has delayed any COVID-19 trends from changing the marketplace is that low mortgage rates make homes affordable everywhere. Even though actual prices have not dropped, historically low mortgage rates make owning a bigger home cheaper. People are likely finding bargains in the city factoring in what it costs to own a home each month, keeping them in the city where prices are more expensive.
Finally, many people may simply not have the money or economic means to make a change in their living circumstances. Many do not want to downgrade their living situation but are not currently able to maintain their standard of living if they were to move right now. This could keep people in place long enough for the general public to get used to living with the pandemic.
Many have said that the world after COVID-19 would look drastically different. In terms of housing, it is too early to tell whether it will change and the scope of any trends.
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