Cities, Suburbs, COVID-19, Housing, Cost of Living, Migration, Urban Flight, San Francisco, New York, Manhattan
Despite what cable news is saying every day, a mass migration to the suburbs isnâ€™t happening.
Over the weekend, the New York Times published a story about how there are bidding wars for homes in tristate area suburbs, and how urban apartment dwellers (especially those with kids) are worried about the uncertainties of living in crowded cities come winter. Itâ€™s the latest piece to explore the impacts of COVID-19 on national housing markets, and seems to support the theory that cities are being abandoned en masse in favor of suburbs. This theory has frequently been posited by the New York Cityâ€“based news media, where TV producers and newspaper editors know many professionals with the means to relocate. But it seems to be something of a distorted narrative; The past six months of housing data clearly indicate that the trend is really only visible in two places (both of which were, until recently, among the most overheated housing markets on the planet): Manhattan and San Francisco, which were seeing outbound migration prior to the pandemic because of extremely expensive housing.
Thereâ€™s no shortage of examples of the COVID-19 urban flight story. CNBC.com doubled down on it with a June headline of â€śThe flight to the suburbs is real and growing.â€ť On its cable network, CNBC recycles this narrative regularly, and opened a segment on the housing market this week by saying, â€śThe housing market is staying hot as people continue to flee the big cities for the suburbs.â€ť
If you live in a city, you probably know people who have left for the suburbs since the pandemic hit. Thereâ€™s no denying the reality that many people have done this since March; many people also did this prior to the pandemic, and many more will do so in the years to come.
â€śPeople move out of New York all the time,â€ť says Nancy Wu, an economist with StreetEasy. â€śThe people who are moving to the suburbs to start a family there or to have a bigger place are looking now and buying their houses now, rather than renting in Manhattan for a few more years.â€ť
But a nationwide, pandemic- or protest-induced urban-to-suburban migration taking place on a scale that impacts both urban and suburban housing markets in a measurable way? There is zero empirical evidence to support such a trend. None. Nothing. Zero.
Earlier this month, real-estate-listings giant Zillow published an exhaustive study examining every conceivable housing-market data point related to cities and suburbia to see if there are major divergences that suggest an urban-to-suburban migration trend.
Are pending home sales between urban and suburban areas different now than they were before the pandemic? They arenâ€™t!
Are suburban homes selling more quickly than homes in urban areas? Nope!
Are suburban homes selling above their list price at a higher rate than urban homes? Not at all!
Are urban homes seeing price cuts at a higher rate than suburban homes? If anything, the opposite!
Are home valuations accelerating faster in suburban areas than in urban areas? Urban zip codes have a slight edge!
Are suburban home listings getting a larger share of search traffic relative to urban areas now than they were last year? The suburban share is actually down 0.2 percentage points!
This list is only a small sample of the myriad ways in which housing-market data do not support the theory of an urban exodus. (See also: People are not searching for larger homes in 2020 compared to 2019.) So why do news outlets keep repeating this thoroughly debunked narrative? Well, there are half-truths to the narrative that â€” if you string them together â€” form what sounds like a logical idea.
Yes, suburban housing markets are booming, but thatâ€™s not because of outbound migration from cities. When cities went into lockdown in the early days of the pandemic, housing markets completely stalled during what is usually the busiest time of year for home sales. In the late spring and summer, as people came came out of lockdown, markets across the country â€” suburban and otherwise â€” began seeing spikes of pent-up demand. At the same time, the number of homes for sale has plummeted and remained down around 30 percent of what it has been in recent years â€” leaving the market with nearly twice the demand and two-thirds of the supply. Couple that with record-low interest rates, and prices are rising dramatically all over the country.
The two exceptions to this are San Francisco and Manhatt