While many Americans have been spending more time in their homes, others are busy relocating to new homes. In fact, the U.S. may be experiencing a new “urban flight” — an increase in the numbers of large-city dwellers escaping to the suburbs.
While moving away from the city may not amount to a major trend, the pandemic apparently has prompted many people — or solidified their earlier plans — to relocate that real estate databases and brokerages are noticing. The leaders of such companies are discussing an uptick in Americans leaving metro areas, and anecdotal polling of real estate agents supports the idea, said Tom White, the D.A. Davidson Institutional Analyst who covers online real estate companies.
“We’re seeing a growing body of evidence and data that suggests this urban flight dynamic is really happening,” White said.
While most of the United States remained under stay-at-home orders this spring, some Americans apparently were using their time for home shopping. Online home showings during May 2020 were significantly higher than for the same month the prior year, White said. The Harris Poll also spotted the trend in May, when it released the results of an April survey in which nearly one-third of Americans said they are considering a move to a less densely populated area because of the coronavirus outbreak1.
COVID-19 is believed to be the main reason behind many moves. Widespread stay-at-home orders, combined with social unrest in some metro areas, appear to be prompting some city dwellers to question the wisdom of living in close quarters with others. In addition, more employees have been working from home, and others have been reporting to physical offices only occasionally, since U.S. lockdowns began in March. Moving out of the city becomes significantly easier when you no longer face the prospect of a lengthy commute, or even when you know your commute will be only one or two days a week.
Potential buyers also have considered recent, exceptionally low mortgage rates to be an incentive to move. The 30-year fixed-rate average fell below 3 percent in mid-July, its lowest level since Freddie Mac began tracking mortgage rates in 19712. Although rates fluctuate daily, they have remained lower overall this summer than they were before the current recession.
D.A. Davidson Analyst White said that although the prospect of visiting houses or hiring movers might seem tricky during the pandemic, multiple online options are available to help potential buyers conduct their business from the comfort of their current homes. Companies such as online real estate broker Redfin, and Zillow, an online real estate database company, make it easier than ever to gain helpful insights such as neighborhood cost trends while also seeing online photos and using various preferences to sort through available properties. And more than ever, real estate agents are offering ways to “see” homes from afar: using tools such as virtual tours, drone video footage and online chats.
In addition, the details of finalizing a home purchase have become much easier in recent years. Online mortgage financings, notarizing key documents and even remote closings have become commonplace, according to White. While you will probably want to visit your future home in person before actually buying, almost every other part of the process can be completed remotely. “The pandemic is accelerating the digitization of the real estate industry,” White said.
1 Coronavirus May Prompt Migration Out of American Cities. The Harris Poll. 2020.
2 Mortgage Rates. Freddie Mac. 2020.
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