The spring 2020 slowdown in sales has been followed by a surge in activity, as homebuyers returned to the market in force this summer. There has been widespread speculation that COVID-19 will lead homebuyers to look for homes outside of denser urban areas in more suburban and rural communities. Some families are concerned about the prevalence of COVID-19 and may want to move out of cities and urban suburbs to counties where the numbers of cases tend to be lower. Others have been working remotely during the pandemic and have decided that working from home will be a permanent situation. As a result, these families are eschewing homes with short commutes for places with more affordable housing options and reliable internet service.
So far, the evidence of a movement out of more urban areas has been largely anecdotal. Virginia REALTORS® has new data that suggests that the suburban/rural shift in the Commonwealth is real.
Back in June, we surveyed Virginia REALTORS® members and found that many REALTORS® thought COVID-19 was having an impact on the housing market. More than a third of survey respondents said that they thought COVID-19 was affecting the types of communities that home buyers were looking for. In particular, most respondents said they believe there would be growing interest in rural areas and suburban communities.
Housing market data through August provides the first compelling look at transactions that confirm that rural and suburban communities have been generating relatively more buyer interest than urban counties. Compared to last year, home sales this summer were up about 6.5% statewide, reflecting the shift of spring sales into the summer market. However, sales activity was significantly stronger in the state’s suburban and, especially, rural counties. The number of home sales was up 5.8% in urban counties, but sales jumped 11.9% in the state’s suburban counties and surged 15.2% in rural counties.
There was also greater price pressure in outlying communities, particularly in rural areas, where the median year-to-date sales price was up 12.7% compared to last year. Prices were up 7.2% in suburban counties and 7.0% in urban counties and cities.
It remains to be seen whether businesses and employees will embrace remote work over the long term. However, some workers clearly will be able to make their work-from-home situations permanent. As a result, demand for housing outside of major employment centers likely will continue well into 2021. The key factor for these working homebuyers will be access to reliable, high-speed internet. Neighborhoods with good internet access and good quality housing stock will be in high demand in the months to come.