Revenge of the Suburbs or Return to the City?
The last two years have made it clear that this old rivalry—Suburbs vs. Cities—is still very much a thing, especially when it comes to housing.
Classic rivalries have always existed: Hatfields vs. McCoys, Army vs. Navy, Beatles vs. Stones. Some of it’s playful, some of it’s stone cold serious. The last two years have made it clear that another old rivalry—Suburbs vs. Cities—is still very much a thing, especially when it comes to housing.
Beginning in March 2020, headlines from coast-to-coast were announcing a new reality: Due to pandemic-related lockdowns and social distancing—and enabled by innovative technology platforms—many Americans were now exclusively working from remote locations. It didn’t take long for new dreams to hatch and new realities to inform the housing market. Quicker than you can say “four-lane highway,” many Americans began relocating to the suburbs and purchasing homes that were more spacious, more private and came with long-sought-after amenities. That trend continues today.
For this population, COVID was both a wake-up call and a reminder: If your physical commute can be traded in for a digital commute, then you may be interested in new homebuying possibilities. If you’re open to change—or if your growing family demands it—why not take advantage of a reimagined map of the possible to extricate yourself from the city and seek those suburban dreams? With the rise of video walkthroughs and secure and seamless digital closings, finding, selecting and closing on a new home could be done even at the height of the pandemic.
But amidst the new migration, we have to ask: Is the departure to the suburbs the only salient plot line? As viral as that narrative has gone, does it tell the full story of where we are in 2021?
The answer is yes and no. While events have certainly conspired over the past 18 months to provide homebuyers with an impressive argument to relocate beyond the urban grid, some homeowners—those looking to avoid the most extreme bidding wars and patient enough to wait for neighborhood shops, attractions and businesses to reopen—have found it rewarding to purchase homes in both top metro areas as was well as small and midsize cities. In fact, some are finding surprisingly good deals.
Given the competing interests and incentives, it can all sound a little confusing to the casual observer. Where is the best place to buy now? Are these homeownership trends a short-term reaction to COVID and the possibilities of remote work, or are they here to stay? We may not have a definitive answer for you, but we’ll walk you through the lay of the land so you can have a better understanding of why buying a home in the city is the best choice for some folks and why buying in the suburbs is right for others.
Your home and you
Ask yourself, are you a city person or do you feel more comfortable in the growing suburbs of America?
The location of your home, much like its overall aesthetics, can certainly reveal aspects of who you are and what you like—but more than anything, it’s a function of priority. Individuals purchasing homes have always had choices, and those choices have often been heavily influenced by timeless factors such as job commute vs. family space, excitement vs. security, good schools vs. better restaurants. You weigh and you choose.
We prioritize different things at different times in our lives—that’s just the story of personal evolution. The factors that may have loomed large when you bought your first home in your late 20’s—walkability with regard to job, gym and social events—may seem insignificant a dozen years later when you have a growing family, a more subdued social life and a need to spread out and feel secure.
Today, most people can expect to own three different homes during their lifetime, which means three opportunities to weigh emerging criteria and decide where they want to live. As is so often the case, as life changes, housing needs change, too. And this has never been more apparent than during the period affected by the COVID-19 pandemic.
On both a national and regional level, buyers have been moving away from cities as part of a “third wave” into suburbia. According to Lawrence Yun of the National Association of Realtors (NAR), the first two waves occurred in the 20th century propelled by widespread adoption of the automobile (1950s) and the fear of urban crime and decay that plagued many cities in the 1970s. This time the drivers for change are remote work and more space.
The great migration
With cities in lockdown, social distancing in effect and many appealing urban mainstays like bars, restaurants, theaters, galleries and live music venues either closed or offering radically reduced services, the once mythic draw of the metropolitan areas dimmed considerably in 2020.
On top of that, there was the issue of physical space—or more specifically, the lack of it for many urban homeowners. It wasn’t just being cooped up inside all day with a deadly virus surging beyond the windows; it was being cooped up while transforming your breakfast nook into your workspace; it was being cooped up while your spouse worked out of the bedroom and your kids alternated between “Zoom school” and cameo appearances in your own video calls.
These new realities provided the basis for rethinking homes, for trading condos for houses and leaving much-loved urban neighborhoods for the promise of something less cluttered and more family-centric. The suburbs.
And like that, “the great migration of 2020” was underway.
Top reasons to buy in suburbia
Naturally, homebuyers and homeowners across the country are curious if this is just a trend due to a couple transitory factors or if this marks a measurable shift in the modern housing market. Let’s take a deeper look at the suburban allure, and why purchasing a home there makes sense now and in the future.
Location, location, location (space, space, space)
In the best of times, city life percolates with immense activity, streets are alive, shopping is just down the block and your employer might be as close as a couple stops on the train or a simple bike ride away. But one thing city living has never been known for—unless you’re very wealthy—is generous living space.
Depending on what city we’re talking about you might live in a house, but more likely an apartment, a condo or a townhome. All are perfectly nice options, but there’s just more space in the suburbs. And as the COVID-19 lockdown revealed to real estate agents and mortgage providers across the nation, today’s homebuyer enjoys space—lots of it.
Additional space that a typical suburban home offers can make a crucial difference in your day-to-day life. It’s not just the luxury of having a large enough house in which to stretch out while entertaining friends and family, it’s the versatility and peace-of-mind that accompanies it.
Guest room, gym and game room
A home in the suburbs potentially provides you with more room—and the potential to renovate and further add on if need be. Are the in-laws coming to stay for a few days? You’ve got it covered with a comfortable guest room down the hall. In a spacious 4-bedroom house, the arrangements are already taken care of. Those sleeping bags you own? Keep them for camping—not house guests.
Home gym? You can finally check this box, too. Many people these days are opting for “carless garages” and turning space formerly reserved for automobiles into dedicated, in-house gyms. But who knows, maybe you have room in the cellar for that? Speaking of cellars—the modern variety that is—remember that game room you’ve always wanted? Kind of impossible in your space-challenged city apartment. But out here, not so much. Now that you have a finished basement, you have the ideal environment to put your pool table, ping-pong table and perhaps the tiki bar you’ve always wanted to install.
Home office
As we’ve mentioned, due to laptops and secure wifi connections available almost everywhere, remote work for the typical 21st office worker is now possible, even likely. While the verdict is still out on whether or not the work from home model will persist in the future (productivity always seems to have the last word), the fact that millions of Americans can and are working from home in the COVID era, has made extra space for the purposes of a home office particularly appealing.
While an office (of sorts) can no doubt be crammed into an urban abode, suburban houses just tend to be...larger with more rooms and more possibilities to create a serene space of your own. This is not lost on today’s remote office worker looking to buy a home. A legitimate home office just makes working easier. That’s not to say your cat still won’t ever walk across your keyboard in your new suburban digs, but at least it will happen in a space arranged to optimize workflow—and not an area more commonly used to make ham and cheese sandwiches.
Outdoor space
“The great outdoors” could mean local neighborhood parks where you and your family go to play tennis, fly kites and throw the ball around. Or it could simply mean your own backyard. This is clearly a category where the typical suburban home outshines its urban counterpart. Not only can the grounds of your home be a place where picnics and recreational activities occur, but if you have small children an outdoor space can bubble with life and exploration: trees, creeks, friendly animals (mostly) and the comforting smell of a freshly cut lawn. Simply stated, nature is more abundant in suburban regions. If that's important to you, buying a home in the ‘burbs might be the right choice.
Serenity/Security
If space is the final frontier then serenity is your North Star, a state-of-mind that might be more approachable within a suburban context. While an idyllic rural or pastoral location is probably an even likelier destination to find such peace, many recent homebuyers are happy enough with a simple respite from city life that suburbia affords. Sure, there’s probably more driving involved in your daily routines, but you’re also going to be a bit more removed from the stress of the city. People aren’t right on top of you—you have privacy. You can breathe easy in the suburbs.
Another reason you can breathe easy is security. If you’re patient and prudent in your homebuying search, you can probably find a nice house that meets all your needs in a low crime area that also boasts good schools. While crime rates have plummeted dramatically in most urban areas over the preceding decades, some stats are starting to tick up at an alarming pace. Whether you’re a single adult or married with a couple children, safety is always a priority. While each locality is different, everyone wants to be safe. A suburban home—while presenting no guarantees—is often the safer choice.
Costs
There’s been a lot of attention paid to skyrocketing home prices over the past couple years, and rightly so. And to be sure, many of those high prices have been found on homes sold in suburban areas.
However, while prices will undoubtedly vary from one neighborhood to the next in both cities and suburbs, the latter has one thing going for it: more bang for your buck. By this we mean that suburban areas tend to boast an average price per square foot that is less than its neighboring city. There are exceptions, of course, but overall the choice is clear: If space is a top priority, your dollar stretches farther in suburbia. It’s simply another measure of affordability.
Other costs in cities such as childcare can be very expensive, putting further strain on households. Some studies have shown that these costs are cheaper in suburban areas.
Taxes and school systems
Additionally, while nobody likes paying taxes, the silver lining in buying a home in certain suburban areas is often the school district itself—a system that is primarily funded through your property taxes. Excellent public schools, of course, have real-world impact on your children’s future. As a side benefit, localities with good schools tend to retain their property values better than those with less stellar school systems. Considering your home is also your biggest investment, this is great news for suburbanites everywhere.
COVID, cities and homebuying
If you’ve been reading the article up to this point, you might think it’s game over for cities in the current societal moment. We beg to differ. Cities might have a few factors stacked against them, but they still have plenty to offer the discerning homebuyer.
While it’s true that a combination of low inventory and skyrocketing demand pushed suburban median home prices higher than cities during the initial phases of the pandemic, it only took a few months for some equilibrium to return to the marketplace. Yes, suburban zones remain hot but cities remain an equally important destination for homebuyers looking for single-family houses.
When everyone was supposedly fleeing the cities, median home sales in urban areas were actually increasing by 15.9% in the U.S. between Feb. 2020 and Feb 2021. Meanwhile, suburban homes rose by 15.5%—hardly an insignificant rise, but below urban areas. City living, specifically buying a home in the city, is still obviously attractive to many people. Let’s find out why and see if it’s sustainable.
Top reasons to buy in urban areas
While simple economics and spatial considerations drive much of the conversation, there are other factors to consider when choosing between a home in the suburbs and one in a metropolitan region:
The allure of the city
You can take the homeowner out of the city but can you really take the city out of the homeowner? While many individuals “age out of city living” at a certain point in time (notably when it comes to schooling their children), others double down on the glory of urban oases and all they have to offer. It often comes down to energy and diversity and convenience. They go hand in hand with city life.
Energy
You often hear people speak glowingly about the “energy of the streets” and basically what they're saying is that they feel more alive when they’re at the vibrant epicenter of the action—be it a sporting or cultural event or simply socializing in their favorite neighborhood bar. They can pop out their door, walk a few blocks and tap into an energy that is both galvanizing and familiar.
Diversity
For many city dwellers, a robust community depends on a wide cross-section of people from all walks of life. It’s when they’re interacting and learning from people all over the country and all over the world that they really experience the full richness of life and self growth. Different music on the street, different languages overheard, different lifestyle preferences in many households. It’s the tapestry of modern life and it’s a hallmark of cities, not suburbs.
Convenience
Proximity matters. City inhabitants don’t have to merge onto superhighways or take commuter trains to find the stimulation they crave—the things they want and need are right there, intensely wound into the fabric of the city and its various neighborhoods. And it’s not just convenience for convenience sake—it’s about community, impromptu interactions and supporting small businesses and shops down the street. If you’re someone who prioritizes the conveniences that proximity affords, buying a home in a city can be a stimulating option.
Work and opportunities
While many people can now work from home as seamlessly as they once did from a corporate office, there may be reasons to stay in the city if you want your career to keep ascending.
As we all know, a large number of businesses are still based in cities, large and small ones alike. If you want to make an impression, mentor a young colleague or attend a gathering of co-workers, it’s nice to have physical proximity. Face-to-face interaction, especially as we begin to finally turn the corner on COVID, is essential in building long-term relationships. As we move into a new phase of employment, many professionals still want to be there to make an in-person connection.
Furthermore, as restrictions lift and socializing returns to normal, there will be chances to attend industry conferences, meetups and happy hours that may lead to serendipitous networking opportunities with other employers—opportunities you may not have had were you to remain a strictly online presence. None of this is impossible if you live in the suburbs; living in a city just makes it easier.
Good deals
Deals can be had in major metropolitan areas—but this will largely depend on what city, what type of housing and at what price point you are looking to buy. One thing is for certain, in 2020 with many prospective homeowners setting their sights on suburban locales, demand for city properties softened. Landlords were forced to issue steep discounts to renters and many of the condos and houses for sale in top metro areas like New York City were selling at or below asking price.
Of course, as vaccines have emerged and cities have opened up, much of the old competition has returned. While suburban homes remain hotter for those who prioritize living space, homebuyers who prefer city living can always find a good deal in their city of choice if they are flexible and patient.
Taxes and other cost considerations
Living in a city provides other potential financial benefits beyond the home itself. Property taxes, while annoyingly high in certain metro areas, tend to be less than what you would pay in an affluent suburb. This is because high population density affords local governments the opportunity to spread out the cost of operating a city among many more residents than a suburban locale, reducing tax burdens for individual homeowners.
Also, there is typically an abundance of public transportation options in a well-run city. While you might hail the convenience factor here, you should also keep in mind the thousands of dollars you could potentially save by eliminating the yearly expenses associated with owning a car. With trains, buses, taxis and ride share options at your fingertips, many people don’t miss the hassle of having a car, especially in a telecommuting world.
Investment value
The word from some real estate experts is that home values in certain suburban areas have all but plateaued—not so in cities. While the mass exodus from cities to suburbs has made great headlines, if you dig into the numbers a bit deeper, it's apparent that many people are still buying homes in urban areas and that these homes are retaining their value. And that’s key. Homeownership as investment is equally (if not more) important as having a place to live.
Homes in cities will likely continue to appreciate as COVID restrictions are retired and more people return to the urban areas. Supply and demand will doubtlessly factor into future valuation as well as the difficult-to-predict effects of climate change.
While these massive upticks in price (value) are not sustainable long-term, it’s hard to imagine that appreciation will not continue.
Cities vs. Suburbs
Ultimately, you’ll decide to buy your home when and where based on a host of factors that are meaningful to you—including the state of current mortgage rates. That said, there’s little doubt that the ongoing pandemic and its contribution to redefining “home” has provided a fresh perspective for all of us to consider going forward.
Given the enormity of buying a house, you’ll want to weigh all the elements above as well as things like proximity to family and healthcare. You 'll also want to calculate in advance your potential mortgage payments and understand your full purchasing power. Whether you’re buying in the city or the suburbs, homebuying success starts with a clear vision of what you want aided by trusted professionals in the real estate and mortgage industries.
*According to https://www.forbes.com/advisor/mortgages/most-affordable-cities-to-buy-a-home/
**According to: https://azbigmedia.com/real-estate/residential-real-estate/phoenix-leads-nation-with-29-3-year-over-year-home-price-increase/