HOUSTON – (Realty News Report) – Major cities are losing residents to the suburbs, boosting real estate demand in outlying communities.
The pandemic has put remote work to an extended test. Some companies have already announced plans to let most of their staff work from home permanently, while many others expect employees to work remotely at least one or two days per week.
The consequence: remote work is increasing the appeal of suburban living.
“Corporate workplace trends, such as working from home, have energized suburban housing markets. Even employees who will work from home only one or two days a week are more open to suburban and exurban living,” says Mark Sikes, principal with Deal Sikes, a Houston-based real estate valuation firm. “As this trend unfolds, attitudes about long commutes will change and homebuyers will respond by moving farther out.”
Community developers and homebuilders are showing greater interest in lots and developable land in counties surrounding Houston, Sikes adds.
“We’ve been expecting growing interest in suburban and rural areas since the start of the pandemic,” said Redfin economist Taylor Marr. “Now we’re seeing concrete evidence that rural and suburban neighborhoods are more attractive to homebuyers than city neighborhoods.”
Redfin data for July show rising prices outside urban cores: the median home price in rural areas climbed 11.3 percent compared with the same summer period in 2019, while suburban median home prices rose 9.2 percent.
New housing in more distant suburbs is also gaining traction as home prices rise and inventory remains tight. Houston realtors recorded a record month in July, selling more than 11,000 homes.
Mortgage rates have hovered around 3 percent, Sikes notes, and multiple indicators point to significant homebuilding and future growth in Houston-area suburbs.
Home building has been accelerating nationwide during the summer of 2020, supporting the suburban trend.
Key supporting statistics include: (1) housing starts rose 22.6 percent in June, according to the U.S. Census Bureau; (2) lumber prices roughly doubled since April; (3) shares of homebuilding companies climbed in the stock market; and (4) homebuilder confidence reached its highest level in 35 years, per the National Association of Home Builders.
Houston analyst Lawrence Dean of Metrostudy projected area housing starts could reach about 31,500 in 2020, one of the highest totals on record—assuming no further major disruptions, including another significant downturn in the oil and gas sector.
For sellers of land, lumber, or homes in outlying suburbs, 2020 may turn out better than expected.
Aug 31, 2020 Realty News Report Copyright 2020
File: Pandemic prompts realty surge in suburbs
Photo credit: Ralph Bivins, Realty News Report
