Home sales in the suburbs are red hot right now

A new Realtor.com report finds that buyers are increasingly leaning towards living outside of urban areas, and prices in subdivisions and planned communities are moving higher as a result.

“From inventory to time on market, recent data shows suburban buyer activity has accelerated at a faster pace than in urban areas,” said Realtor.com Chief Economist Danielle Hale in a statement. “Notably, the price premium is shrinking between notoriously expensive urban housing and suburban for-sale homes, typically known for more bargains. Buyers can still get more bang for their buck in the suburbs, but affordability is increasingly a consideration in many markets.”

Suburban homes are still cheaper than those in the heart of cities, but the price gap is shrinking. It currently stands at 7% nationally, compared to 10% in 2019.

That’s, in part, because the number of suburban home shoppers has surged 42.1% since the onset of COVID-19, at least on Realtor.com. In September, visitors to the site looked at suburban listings 24% more than they did listings in urban areas.

The inventory of available homes in the suburbs was also down sharply, with nearly 55% fewer listings in September 2021 vs. September 2019. Homes sold faster, with listings spending 22 fewer days on the market.

Urban homes still cost more per square foot, but the explosive growth in housing in general, combined with the rapid growth in interest in the suburbs, is changing that.

“Since 2020, the intense competition in the suburbs has led to suburban homes appreciating faster than urban homes. In 2020, the suburbs outpaced their urban counterparts’ price growth for the first time since 2017. In September 2021, the median listing price per square foot reached $212 in the suburbs, 18% higher than last year and 28.4% higher than the 2019 level. Meanwhile, the median listing price per square foot of urban homes was $226, 14.9%, and 25.4% more expensive than 2020 and 2019.”