The COVID-19 pandemic is not only changing the way people live, it is changing where they live. Since the health crisis began impacting the U.S. in March, there has been anecdotal evidence suggesting it was a key driver in people leaving denser urban areas for more spacious suburbs.
Collateral Analytics, a Black Knight data and analytics company, analyzed condominium sales and prices in several U.S. metropolitan areas and compared this to single-family home sales and prices in nearby suburban areas. The research found there is indeed evidence to support the claim of people trading their big city lifestyle for a slowed down pace in the suburbs.
New York City was one of the early areas to feel the effects of COVID-19, and home trends reflected this this impact. Condominium prices in New York City have declined to their lowest level in five years and, similarly, the number of units sold dropped dramatically in April 2020, and has yet to recover to pre-pandemic levels.
Meanwhile, Union County, New Jersey and Fairfield County, Connecticut — two suburbs of New York City — have seen single-family home (SFH) prices rise to their highest levels in more than 10 years, as number of units sold has also spiked.
Collateral Analytics’ analysis of San Francisco and its surrounding suburban areas reveals a similar trend on the country’s west coast.
Analyzing the annual median SFH price change in the San Francisco metropolitan area during July 2020, the impact becomes even more apparent.
Compared to the previous year, areas that experienced significant price declines (indicated below with red/pink hues) were primarily urban city centers. However, areas seeing the most drastic price spikes (indicated below with blue/green hues) were more commonly suburban environments.
Marin County, California — to the north of San Francisco, across the Golden Gate Straight — has seen SFH prices hit their highest mark in over five years, while early August data shows the number of SFH sales in the county have already surpassed a monthly record over the same timeframe.
Santa Clara, California — a suburb of San Jose — has seen moderate increases in SFH sales but has experienced a significant uptick in cost since the pandemic’s outbreak.
Suburban homes can offer larger living areas, space for home offices (a desired feature in a work-from-home reality), yards, pools and other amenities not typically found in urban condominiums or housing units. Thus, it is not surprising that people living in city centers will find these features appealing, especially in an era of social distancing.
It remains to be seen whether this will be a permanent change in where and how people live and work, but evidence of such a trend can be observed in this snapshot of time.
Black Knight’s Collateral Analytics will provide bimonthly snapshots of home sales and price information for major U.S. markets via this blog.