One major impact of the coronavirus pandemic is on where people are deciding to live, work, and play. Housing affordability, the desire to live in less dense areas, and in larger homes with the opportunity to work from home, and the demand from millennials as they start to form households and raise families are important factors that play into the decision of where to live and buy a home.
As of August 2021, housing market indicators show outlying counties of metropolitan or micropolitan areas are experiencing more robust housing demand compared to central counties, an indication that housing demand is dispersing outwards from the central counties of metropolitan or micropolitan areas to outlying counties.
Market statistics in outlying and central counties of metropolitan areas
As of August 2021, home listings data on realtor.com® in 883 central counties and 114 outlying counties indicate stronger demand for housing in outlying counties than in the central counties of metropolitan areas. However, both outlying and central counties are performing remarkably well compared to pre-pandemic conditions (February 2020).
Faster price appreciation in outlying counties
In August, the median listing price in outlying counties rose 10% from one year ago, while the median listing price in central counties rose at a slower pace of 6.7%. In fact, the median listing price in the outlying counties was slightly higher at $311,225 compared to the median listing price of $299,450 in central counties. The median listing price per square foot is also higher in the outlying counties, at $154/sf compared to $148/sf in the central counties.
Faster days on market in outlying counties
Properties are selling faster in outlying counties, at 35 days, compared to 37 days in central counties. Days on market have decreased in both central and outlying counties; properties sold in 53 days in central counties and 52 days in outlying counties one year ago.
Higher ratio of pending listings to active in outlying counties
The ratio of pending listings to active listings is another indicator of demand relative to supply. In outlying counties, there were 1.4 pending listings per active listing compared to 1.2 pending listings per active listing in central counties.
Active listings are down in both central and outlying counties
Supply is running below year-ago levels in both outlying and central counties, with a stronger decline of 23% year-over-year in central counties compared to a 20% year-over-year decline in outlying counties.
Bigger square footage in outlying counties
One reason for the preference of a home in outlying counties is the availability of bigger homes and more yard space. In terms of home square footage, the median square footage of homes listed in outlying counties was 1,877 square feet, which is 40 square feet larger than the median square footage of 1,837 square feet in central counties. That 40 square feet gives extra storage space or can serve as a work area.
Median listing prices in selected metro areas
Affordability is clearly a driver of the demand for homes in outlying areas. Homes in outlying counties have been generally less expensive than in central counties. In August, the median list price in outlying counties has increased at a faster pace than in central counties, except in the metro area of Chicago.
This article has been written and published by the National Association of REALTORS®.
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