The urban real estate market has been running hot in the United States since last summer. But the suburbs have been even hotter, according to an analysis from Zillow.
From January 2013 through June 2021, urban homes have generally been gaining dollar value more quickly. But a switch happened after July 2021 as the economy recovered from the pandemic: Home values in suburban ZIP codes rose faster on an annual basis, fueled by the widespread shift to remote work that spurred millions of Americans to look for greener locales and bigger homes.
Zillow economist Nicole Bachaud compared the recent trend to one world-class sprinter edging out another.
“While urban home value gains have continued to accelerate, the suburbs are even hotter, showing just how strong demand is for limited suburban inventory,” Bachaud said in a news release.
As with most things in real estate, location matters. Some urban areas remain exceptionally attractive to buyers — more so than their suburbs. Among them are San Jose, California, Silicon Valley’s biggest city, and Austin, Texas, a place that has seen among the biggest gains in home prices during the pandemic.
In other parts of the country, including the Philadelphia metro area that includes Wilmington, Delaware, the pace of home value has plunged in recent months, while they spiked in local suburban and rural ZIP codes.