Urban Exodus Continues to Fuel Suburban Housing Demand
Buyers Want More Space to Work and Quarantine at Home
As the COVID-19 pandemic continues, people are largely avoiding urban centers and looking for homes in less densely populated areas. Moreover, mortgage rates remain historically low, and buyers are searching for more space to work and quarantine at home.
According to a May survey, nearly one third of people in the US were considering moving to a less crowded area due to concerns about the pandemic. Recent home sales data shows that now, many are acting on those plans.
City Dwellers Pack Their Bags
In Manhattan, signed sales contracts for condos and co-ops dropped 60% between July 2020 and July 2019. In suburbs of New York, however, single-family home sales are soaring. In Westchester County, New York and Fairfield County, Connecticut, home sales have doubled. In San Francisco, July home sales saw a 1.4% uptick, while sales in Marin County rose 36% and sales in Contra Costa County increased by 15%.
Moving companies in cities are seeing demand like never before. In Manhattan, some movers are having to turn customers away because they do not have enough staff and equipment to keep up with the spike. FlatRate Moving reported that the number of Manhattan moves it helped with between March 15 and August 15 is up 46% compared to last spring and summer.
Concerns About a Bubble Loom
This boom in demand for home buying comes as the US economy suffers from historic contractions and soaring unemployment. Lawmakers have pumped stimulus money into the economy, frozen foreclosures, and reduced the cost of borrowing. However, some analysts are concerned that these measures are inflating the housing market. People who have recently bought homes, or who already own homes and are paying mortgages, could face hardships when these stimulus measures end.
Investors, homeowners, and potential homebuyers will be watching closely to see how COVID-19 infection rates and government action impact the housing market during this unpredictable time.
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