Report: Cities making a comeback for buyers
Searches on Redfin for homes in rural areas were up 235 percent in October compared with October 2019, but that represents a deceleration compared with the peak of a 273 percent uptick in rural home searches in August. Similarly, searches for homes in small towns rose 218 percent in October compared with October 2019, down from a 233 percent increase in September.
While rural areas and small towns continue to attract buyers in search of more space, Redfin chief economist Daryl Fairweather said in a statement that record-low mortgage rates are encouraging buyers to look in cities, too. Some buyers want to invest in city real estate now in anticipation of urban amenities reopening in the next year or two, she said.
In May, home prices declined by 3.5 percent compared with May 2019 in urban areas, the only neighborhood type where prices fell. In that same month, when the real estate sales data was reflecting stagnant sales in March and April, prices rose 1.6 percent year over year in the suburbs and increased 3.2 percent in rural neighborhoods.
By November, there were double-digit price increases for all three location types. For the four weeks ending Nov. 8, Redfin found that the median sales price in rural areas rose 18.3 percent compared with those same weeks the previous year, while the median sales price rose 14.3 percent in suburban areas and 15.6 percent in urban areas.
Pending sales, which represent homes that are under contract but have not yet gone to settlement, jumped during the four weeks ending Nov. 8 by 26.1 percent in urban areas compared with those same weeks in 2019; pending sales were up 36 percent in suburban areas and 37.4 percent in rural areas.
The supply of homes for sale declined by 40.9 percent in rural areas and 31.9 percent in suburban areas during the four weeks ending Nov. 8 compared with the previous year. While the limited inventory of homes for sale in those areas reflects buyer interest in locations outside cities, the supply of homes in urban areas also dropped by 14.5 percent in that same period.
