The old city-versus-suburb debate is getting a new twist.
Urban vs. Urban living became popular again in places with revitalized downtowns and new apartment buildings.
The COVID-19 pandemic in 2020 brought a sudden turn.
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Health concerns and lockdowns made crowded cities less appealing for a time, and remote work became common.
In 2020 alone, about 4.9 million people moved out of major cities to suburbs or rural areas.
As a result, suburban housing markets heated up quickly.
This was a historic flip: usually city rents rose faster, but now suburban rents outpaced them.
Home purchase prices showed a similar pattern.
In 20212022, suburban home values appreciated more quickly than urban home values, reversing the usual trend.
Urban Rebound
However, these trends are not static.
By 2023 and 2024, the housing market began to adjust.
As pandemic fears eased, cities started to regain some residents.
For example, New York Citys population loss slowed significantly in 20222023 compared to 20202021.
Los Angeles also saw a smaller outflow of residents in 2023 than the year before.
Before 2020, only a small fraction of Americans worked from home regularly.
In 2019, just 67% of U.S. workers primarily worked from home.
Commuting to an office was a normal part of life for most people.
But the pandemic forced a massive experiment in working from home, and it largely succeeded.
Surveys show that most people with remote-capable jobs want to keep working remotely at least part of the week.
This is a huge shift in workplace culture, and it has real effects on housing choices.
Data confirms that people took advantage of this freedom.
The median distance that recent home buyers moved shot up during the pandemic.
(From 2018 to 2021, the median move distance had been steady at about 15 miles.)
Some even moved clear across the country.
For the first time, living 100 miles from your companys office was perfectly feasible for many.
One big reason is that commuting every day is no longer the norm for millions.
The importance of being close to the workplace has dropped.
Rise of the Exurbs
Government population data underscores how remote work enabled growth in far-flung areas.
Before the pandemic, most fast-growing spots were closer to city centers or in nearer suburbs.
In short, work-from-home flexibility expanded the geographic choices for homeowners.
Thousands of people have done exactly that.
These return-to-office policies have slightly cooled the remote work boom.
Even so, the overall consensus is that remote and hybrid work will remain far more common than before.
Transportation infrastructure roads, public transit, trains determines how easily people can commute and get around.
Remote Work Changes Commuting Patterns
However, the landscape is changing here as well.
As noted, remote work reduces the need for daily commuting, lessening the impact of transportation limits.
Many workers are now commuting only a few days per week or not at all.
On the flip side, heavy traffic or poor transit can push people toward moving away.
Were also seeing transportation considerations play into which suburbs are hottest.
Transportation is the link here people are balancing thebenefitof remote work with therealityof commuting when required.
We can expect that infrastructure quality (roads, trains, buses) will continue to influence housing demand.
Climate Risk and Homebuyer Choices
Climate and the environment are becoming increasingly important in real estate decisions.
Housing demand has been strong in states like Florida despite the well-known hurricane danger each year.
This suggests that some buyers are becoming more cautious about climate dangers.
Indeed, the cost of homeowners insurance in disaster-prone areas has been skyrocketing, which directly affects housing affordability.
These rising costs are effectively increasing the price of living in high-risk locations, which can dampen demand.
But climate considerations are expected to grow in importance.
The pandemic jump-started a suburban surge that has not fully reversed.
Urban Recovery
Urban areas have bounced back to an extent.
Exurban Growth
Exurbs and outer suburbs are some of the fastest-growing places.
Many of the fastest-growing incorporated places in 20222023 were these distant suburbs.
This trend reflects both remote workandongoing high housing costs in established suburbs closer to the city.
Regional Migration Shifts
Regional migration continues to favor the South and West, but with a twist.
Recently though, the pace of people moving to those hot states has slowed down.
Tampa, FLs net influx fell from 35,000 people in 2023 to about 10,000 in 2024.
Dallas saw a similar drop (from 35,000 to 13,000 net gain).
Meanwhile, fewer people are leaving the big coastal cities than before.
Housing Affordability Challenges
Housing supply and affordability issues persist everywhere.
A major factor affecting demand (urban or suburban) is simply the availability of homes people can afford.
Home sales volumes dropped in 2023 to some of the lowest in a decade.
In suburbs, this meant fewer listings and continued competition for whatever starter homes existed.
In cities, it meant some renters delayed buying condos and kept renting.
Companies have seen that productivity can remain high with remote teams, and employees strongly desire flexibility.
Forecasts indicate that the share of work done from home may even rise further as technology improves.
This means that suburban and rural living will continue to appeal to a large segment of workers.
Urban Adaptation
Cities will reinvent themselves.
Many large cities are actively planning for a future with more hybrid workers and lingering vacancies in office buildings.
A big trend to watch is the conversion of office space to residential units in downtown cores.
Cities like Boston and Minneapolis have started offering incentives to convert empty offices into apartments or condos.
The goal for cities is to remain vibrant places to live, not just to work.
This blending could equalize demand.
Climate Considerations Will Grow
Climate considerations will intensify.
Unfortunately, as climate change progresses, certain areas will face more challenges.
This could lead to shifts in where people want to live.
Both types of areas will evolve and attract people for different reasons.
They will benefit from remote work trends and the desires of families for space and good schools.
Cities are not going anywhere, though Americas great cities have faced crises before and adapted.
Should that happen, demand for urban housing could surge again.
For the individual homebuyer or renter, the key takeaway is that you have more choices now.
The pandemic broke the mold that youmustlive close to work or in a certain big city for your career.
