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Photo courtesy of United Van Lines
A pair of studies out this week from researchers at discount brokerage Redfin and their peers at listings portal Zillow suggest some buyers are continuing to trade distance from work for cheaper housing.
Zillow’s researchers analyzed traffic data in Greater Boston and other major coastal metro areas, concluding that ZIP codes further away from downtowns across the country have generally seen large growth in their median sale prices since 2019, while areas within 10 minutes’ drive of downtowns have generally seen much cooler markets. In Greater Boston, Pittsburgh, Washington, D.C., Seattle, the San Francisco Bay Area, Los Angeles, Chicago, Minneapolis, Denver, Miami, Houston and Dallas, the areas within a 10-minute commute of the downtown core saw the least growth in prices since 2019 compared to all other parts of the metro. These areas hottest submarkets were generally 61 to 90 minutes away from downtowns and saw much stronger price appreciation.
“Home buyers are placing less of a premium on a short commute thanks to the rise of remote work,” Zillow economic data analyst Nicole Bachaud said in a statement. “Americans are searching for a combination of affordability and more space, whether that’s outdoor space or an extra bedroom to turn into a home office. In expensive, dense markets, that usually means a home farther out from the downtown core, which is more palatable when you don’t need to commute every day, if at all. In more sprawling metros, buyers are flocking to less expensive downtown cores, bringing a renewed interest to these city centers.”
The result will likely include worse traffic, said data scientist Kyle Jackson, with the traffic data company HERE Technologies, which supplied Zillow with the traffic data for its analysis.
“Remote work flexibility has contributed to morning rush hours being less congested and, in some markets, morning rush hour moved 60 minutes later. While highway traffic congestion plummeted in the early stages of the pandemic and is now rising rapidly across the country, local streets have been much less affected,” Jackson said in a statement provided by Zillow. “Traffic levels have stayed stable at around 80 percent of pre-COVID levels since fall 2020. These traffic trends will be critical to examine as communities continue the Great Reshuffling.”
In their study, Redfin’s economists analyzed search data from the company’s own listings portal to conclude that 1 in 3 site users considered a move to a different metro in the second quarter, up from 1 in 4 users during 2019. All of the top destination metros identified in Redfin’s survey were in the Sun Belt, with the exception of Sacramento, California, which has emerged as an alternative to Oakland, California, for Bay Area buyers in recent years. Many buyers searching in those areas were from New York City, Los Angeles, San Francisco or Chicago.
“Some pandemic trends are here to stay, and moving to a more affordable part of the country is part of the new normal,” Redfin Chief Economist Daryl Fairweather said in a statement. “In fact, the Biden administration plans to make it easier for Americans to move to a new state by encouraging the FTC to ban certain occupational licensing restrictions. That would make it easier for a teacher, barber or electrician to move across state lines.”
The findings echo the communities Banker & Tradesman identified as this spring’s hottest single-family housing markets in Massachusetts, with Cape Cod and the South Shore dominating the list. Real estate agents there say older buyers who are still working but eager to take advantage of more liberal work-from-home policies have emerged as a new force in their local markets. Traditionally more affordable communities like Sandwich and Mashpee have attracted substantial attention from buyers.
