Home buyers pivot back to urban cities, rural areas still hot
Searches for homes in rural areas increased 235% year-over-year in October, a deceleration from a 273% peak in August.
A new report released Tuesday by real estate brokeredge Redfin found a 200% year-over-year increase in page views for homes in large metro areas, including cities and their surrounding suburbs, during the month of October.
Photo courtesy of Redfin
The new finding demonstrates renewed homebuyer interest in urban areas after searches stagnated in March and April when the coronavirus pandemic hit. However, remote work and homeschooling has also led to a surge in interest in less densely populated areas, with rural and suburban areas still outpacing demand for urban areas.
Searches for homes in rural areas increased 235% year-over-year, a deceleration from a 273% peak in August. Meanwhile, small towns saw searches rise 218% year-over-year in October, a major increase but lower than the 233% peak a month ago.
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For the four-week period ending Nov. 8, median home prices for rural areas increased 18.3% year-over-year growth to $300,000, the biggest increase and highest median sale price since Redfin started tracking this data in the beginning of 2017. Meanwhile, median home prices for suburban areas saw growth of 14.3% growth $331.5K and median sale prices in urban areas rose 15.6% to $289,000.
Photo courtesy of Redfin
Home-price growth stalled in rural, suburban and urban areas in May and June as a result of initial uncertainty stemming from the pandemic. Price growth declined 3.5% year over year in May in urban areas, the only neighborhood type where prices dropped.
As for suburbs and rural neighbordhoods, prices increased 1.6% year over year and 3.2% year-over-year in May, respectively. Total home sales were up 11.4% year over year in rural areas during the four weeks ending Nov. 8, and suburban and urban neighborhoods were up 15.4% and 9.3%, respectively.
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In addition, pending sales, a more current housing market indicator, jumped significantly across all three neighborhood types in October, up 37.4% year-over-year in rural areas, 36% in suburban areas, and 26.1% in urban areas.
Photo courtesy of Redfin
Housing supply shortages were more severe in rural and suburban areas than urban, with the number of homes for sale down 40.9% and 31.9% year over year in the four weeks ending Nov. 8, respectively, reflecting homebuyer interest outside of city centers. In urban areas, supply dropped 14.5% year over year.