People Fleeing cities? Not according to Zillow

[2rocky]

Full article

Executive Summary
Are people fleeing the cities for greener suburban pastures? Some faint signals may have emerged in certain places, but by and large, the data show that suburban housing markets have not strengthened at a disproportionately rapid pace compared to urban markets. Both region types appear to be hot sellers’ markets right now – while many suburban areas have seen strong improvement in housing activity in recent months, so, too, have many urban areas.

Zillow’s Economic Research team analyzed a variety of Zillow data points in order to illustrate this trend. Data related to for-sale listings are generally the best indicator of real-time housing market activity, and in all but a few cases, 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.

Other indicators also help drive home this conclusion. Changes in annual home value growth rates from just before the pandemic to now have been about the same for urban and suburban markets. In some regions where there is a divergence, the discrepancy can be explained by trends that were unfolding before the pandemic. Page view data also show that suburban home listings have not grown in relative popularity in the past few months. For-sale suburban homes attract more than three times as much of Zillow’s traffic as urban listings do, but that was the case last year as well. Interest in detached single-family homes (or similar) has not seen a marked increase in the past year, either.

Earlier differences in sale prices may be the strongest signal of potentially diverging market trends in suburban areas. Median sale price growth has slowed across the board from February to June, and it has decelerated six percentage points more in urban areas than in the suburbs. The urban deceleration in prices was primarily a coastal phenomenon that tracks with a lower pace of pending sales and listing activity generally, especially in the urban Northeast. However, these fluctuations must be interpreted within the context of underlying home values. Median sale price changes can be caused by changes in the composition of homes being sold rather than reflecting true value changes, and sale prices can fluctuate drastically during periods of low transaction volume like we saw this spring. Finally, because our sale price data takes longer to tabulate, this observed difference reflects evidence from earlier in the pandemic, with May listings and pendings showing up in June closings. In the case of listings, we saw that earlier divergences later converged as the summer progressed, and that may occur as well with sale prices as more recent data become available.

Rent prices have seemed more affected by shifting trends during the pandemic. Rents in urban ZIP codes fell more relative to their pre-pandemic trend than in suburban areas, supporting the theory that urban ZIPs were disproportionately affected in the rental market.

While the national trend shows commonality among cities and the suburbs, there are regional differences that make this story more complicated. For example, suburban homes are spending less time on the market than urban homes in the South, but the opposite is the case in the Northeast. Evidence suggests that some of these regional discrepancies might be attributed to supply-side constraints rather than any marked shifts in homebuyer demand.

Metro-level discrepancies exist as well, especially in San Francisco and New York, showing that not all urban cores are keeping pace with hot suburban markets. In Manhattan, home values have dropped 4.2% since last year and homes are staying on the market two months longer than a year ago, According to StreetEasy’s July Market Report. In San Francisco, list prices have fallen 4.9% year over year and inventory has risen 96% with a flood of new listings. This divergence of active inventory is not evident in cities like Miami, Los Angeles, Washington, D.C., and Seattle.


https://www.zillow.com/research/2020-urb-suburb-market-report-27712/

 

[Mallardsx2]

I can tell you for free that people are fleeing Atlanta GA for more than 1 reason.

 

[SO7mm]

As it shows it seems like San Francisco is an exception. Inventory in the city is way up but the market in the suburbs is very hot.

 

[Brandon270]

As it shows it seems like San Francisco is an exception. Inventory in the city is way up but the market in the suburbs is very hot.

Same here in central California, no house I've seen put up for sale in my neighborhood lasts longer than a week.

 

[beginnerhunter]

Lol, I saw a quote the other day that said something to the effect of "People predicting the end of NYC have forgotten what it's like to be 25 years old".

That's probably true, and as more people eschew starting having children/families they'll need the big cities to distract them from the existential depression of their meaningless life.

 

[WestKyHunt]

My wife and I have been looking at houses in Eastern Oregon. Judging by the increase in house prices and how quick they're selling ill say, NO

 

[NR_Hunter]

I can’t wait to live quite literally anywhere else besides Minneapolis.

 

[noharleyyet]

This guy can put you in a fixer upper in NYC or LA....

 

[R.K.]

Home prices in Billings apparently jumped 9% last year, and they're already at 7.9% this year. The average increase in a year is 3%, if that tells you anything. So now I'm on the fence of whether or not this is a bubble that's going to pop, or a sign of things to come..

 

[tzone]

I can’t wait to live quite literally anywhere else besides Minneapolis.

I don't live in Mlps....But close enough. I can't wait to get my ass out of MN completely.

 

[stealthy_bowman]

I live right in between NYC and Philly, exactly an hour from both cities, and the housing market here in the west central "country" part of NJ has absolutely exploded. This time last year we had about 4 months supply of homes on the market at any one time, we are now down to less than 1. It's amazing, a house goes up for sale and a few days later it is under contract. Never saw it like this here before.

 

[Doublecluck]

Sold in 1 day, 12 scheduled showings the first day it listed. 3 out of state offers sight unseen. got 13,000 over asking. Moving to that lake out yonder.. Gallatin valley is a complete loss.

 

[Irrelevant]

Where people are migrating in, and out of, the West - High Country News

While the region continues to grow, migration patterns are in flux.

www.hcn.org

Pretty cool graphic

 

[Bigjay73]

So where are people leaving that so many areas are booming? Has to be states or cities with a huge surplus of real estate

 

[88man]

New Yorkers are moving to northeast Pa in droves. Even more so they are recreating at the Pa state parks in numbers that the parks can't handle. Its so bad at a few of the Parks that the lots are full by 8am every weekend and the trash problem is crazy. Swimming beaches closed due to hundreds of diapers being buried in the sand>

 

[R.K.]

From that graphic, NY & TX are seeing a mass exodus, California has a better in/out ratio, but still has an enormous number fleeing. IL is just as bad as NY, and I understand why after having lived there.

Gallatin County, though, has one of the highest immigration ratios in the country over the last 5 years.

 

[Irrelevant]

So where are people leaving that so many areas are booming? Has to be states or cities with a huge surplus of real estate

To answer the first the graphic shows that in 10 years L.A. lost 300k people. I would assume the east coast has many similar cities. Spread those over the rural west and you gets a helluva lot of growth.

As to the second, I think there are definitely places you can capitalize on real estate right now. But the question is simply are those areas you want to actually own land?

 

[EYJONAS!]

Too many coming to MT that's about all I can tell ya.........

 

[Shangobango]

I don't know much on this subject but I do know that when toying with the idea of moving to Wyoming or Montana and looking at comparable house and land to what I have now that there is zero chance that I could sell my house and land and get something comparable up there for the same price.

I am not sure what that says about the real estate market up there as I have no idea how it was in the past. But it was a real eye opener for sure.

 

[Irrelevant]

I don't know much on this subject but I do know that when toying with the idea of moving to Wyoming or Montana and looking at comparable house and land to what I have now that there is zero chance that I could sell my house and land and get something comparable up there for the same price.

I am not sure what that says about the real estate market up there as I have no idea how it was in the past. But it was a real eye opener for sure.

I think everywhere in the west is 2-20x more then everywhere in the east.

My SIL bought a very nice 6 bedroom house on an acre in IN for less than my wife and I bought a super crappy starter home, 1 bed 890 sq ft, from the 60s on a speck of land in Wenatchee.