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With remote work becoming almost mandatory for many workers across the U.S. during the COVID-19 pandemic, many looked to move into more rural areas. However, new statistics from Redfin report that there has been a resurgence in interest for homes in urban areas. This could continue to fuel home sales and mortgage activity, which has been predicted to hold strong through 2021.
According to the report, October 2020 saw the first sign of renewed interest in urban areas. Redfin reported that pageviews of homes in large metro areas which includes cities and their surrounding suburbs, increased 200% year-over-year. Pageviews for these large metro areas are now closing in on those of homes in rural areas, which increased 235% year-over-year in October.
"Rural areas and small towns remain desirable—especially for families who need space to accommodate remote work as the pandemic persists—but record-low mortgage rates are motivating people to search in cities, too," said Redfin chief economist Daryl Fairweather. "Many buyers are crossing their fingers that restaurants, bars and shops may be bustling again in the next year or so, and they're looking to invest in the eventual resurgence of cities."
According to Redfin, the median home sale prices increased more than 18% year-over-year for rural areas and nearly 16% in urban areas.
"While life in the city has changed during the pandemic, with empty sidewalks and boarded-up storefronts becoming the norm, some buyers are looking long-term and realizing it's possible to buy a condo for a 2017 price without competition," said Jessie Culbert Boucher, a Redfin real estate agent in Seattle. "If they hold onto it for five years, they'll likely ride out the current downturn, make money and enjoy the return of vibrant city life."
Additionally, the report revealed that total home sales were up 11.4% year-over-year in rural areas during the four weeks ending Nov. 8, and they were up 15.4% and 9.3% in suburban and urban neighborhoods. It's also important to note that the inventory shortage is more severe in rural and suburban areas compared to urban areas.
Click here to view the full report.