The preference for suburban locations is evident from Realtor.com’s online searches, in which 62 percent of views were for properties in the suburbs compared to 38 percent in urban areas. The number of home shoppers looking in the suburbs is 42.1 percent higher than pre-pandemic levels.
While more homes have been listed for sale in recent months in the 100 largest metro areas around the country, particularly in urban areas, the rate of growth is slowing again in both urban and suburban areas, according to Realtor.com. The new supply of homes lags 8 percent in urban areas and 14.4 percent in suburban areas compared to pre-pandemic levels. The share of available homes has persistently declined faster in suburban locations compared to urban locations since the pandemic began, while demand has risen faster for suburban homes.
Historically, homes in the city have been 10 percent more expensive on a price-per-square-foot basis than homes in the suburbs. Now, desire for homes in the suburbs and intense competition are driving home prices up more quickly there, and the price premium for urban homes is just 7 percent.
Limited availability of suburban homes
In September 2021, there were 13 percent fewer homes available in suburban markets compared to September 2020, according to Realtor.com. In urban markets, there were 6.3 percent fewer homes.
The gap comes from both demand and supply issues. In September, demand for homes in the suburbs (based on online searches on Realtor.com) was up 42.1 percent compared to September 2019, before the pandemic, while the supply (based on new listings) was down 14.4 percent during that same period. In contrast, demand for urban homes rose 40.5 percent during that period, but supply dropped 8 percent.
Before the suburbs claim victory in the housing market, though, it is interesting to note that desire for city life continues to exist — to the tune of 40.5 percent more people looking for an urban home than were searching for one before the pandemic.
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