If you are looking for a new place to live these days, the odds are good you have at least considered taking the “country mouse” route and buying a home in a rural area. The odds are also pretty good that a year ago, you would never have spared the concept a second thought.
Of course, things are different now…
The Perceived “Urban Exodus” Pushes Rural & Suburban Values Skyward
Just how different our housing preferences will ultimately become as a result of the COVID-19 pandemic remains to be seen. However, data from Realtor.com comparing property searches conducted in June 2019 and June 2020 shows that 34 percent more searches focused on rural areas of the country compared to the same time last year, and 30 percent more focused on suburban areas. Of course, readers should note that search volumes rose across the board; urban areas posted a 19 percent increase over last year.
“Property views are not property sales, of course,” warned Dante Chinni, an NBC News contributor specializing in data analysis. “It’s hard to imagine the nation’s larger trend toward an urban migration is just going to suddenly stop.” Chinni speculated that much of the increase in search traffic could stem from a desire to maintain a “second-home getaway” in a “more remote community.” Should working from home become even more common, accepted, and permanent, these second-home searches could easily become second-home purchases.
Supporting the idea that the “urban exodus” is not yet in full swing, ApartmentList.com recently released what they called a “discussion of the post-pandemic future of American cities” also based on search data. The researchers insisted, “Despite economic lock-downs and health risks recently attributed to cities, Americans on the whole are maintaining an appetite for density.” The group noted searches in higher-density cities are actually on the rise, and, according to Apartment List data, urban-to-suburban activity has faded. Of course, this data involves apartment searches only, so while it does include large volumes of data points from the “millions of users who registered” for the service between January 1, 2020, and June 30, 2020, all of the data points are from apartment searches, which could skew the findings.
Rural & Suburban Property Values are Rising
Regardless of what the American consumer actually opts to do after all this online searching, the immediate effect is clear. Rural and suburban property values are rising, and the demand for these properties along with a diminished supply in the wake of stay-at-home orders this past spring is making the market sector even hotter.
“It’s definitely competitive,” said Better Homes & Gardens Rand Realty broker Michelle Pfeffer. She is based in New York’s Hudson Valley, and reported “a lot of people hit the pause button” in March both on buying and selling homes. Now, however, she says sellers are getting multiple offers within just a few days, particularly if they are willing to offer buyers a virtual tour of their home.
Ken Leon, director of equity research at research firm CFRA, said the competition in these areas combined with ongoing uncertainty about COVID-19 and an aging population of Millennials will create a “secular shift in household behavior” in the coming years. “These are residents of high-rise living, in mostly urban markets, who are more actively looking for the suburbs for single-family homes – both for growing families because the Millennials are aging and also for safety in terms of COVID-19,” he said.
Tom Olson is the founder and CEO of Good Success and the Olson Group, a conglomerate of real estate-related service providers. Learn more about how you can invest in the right suburban and rural areas of the country and which cities are considered truly at risk for an urban exodus by signing up for our newsletter and blog updates at GoodSuccess.com.