Are Zoom towns where a large majority of Zoomers (Gen Z) live? Nope. Are they community digital chat spaces where people spend time together on Zoom? You’re getting closer but not quite. Zoom towns are actual growing towns where people have moved, often from more crowded urban areas, as remote working becomes more popular. According to Bloomberg, “Zoom towns” are urban city dwellers “have fled to escape the perceived dangers of crowded cities filled with people who might be carrying the coronavirus.”
Are Zoom towns for real?
Zoom towns seem to be real alright, and the data shows that. The pandemic has caused 13% of homebuyers to search for homes in a different area than originally planned, according to a survey of more than 1,000 people who plan to buy a home within the next 12 months conducted by Redfin from July 19-21. It asked those 140 buyers two questions: 1) What best describes where you were searching for a home before the onset of the pandemic, and 2) What best describes where you’re now searching for a home? Results indicate that interest in rural areas and suburbs is up and interest in urban areas is down.
Data from Better Mortgage supports this exodus from major cities to life in the suburbs. In New York City for example, 35% of Better applicants bought homes in counties outside the five boroughs in July, while 27% of applicants from the San Francisco Bay Area bought homes outside the area.
June 2020 data from Compass describes similar trends. Bay Area sales of high-end listings priced over $2 million saw the highest growth over 2019, nearly tripling from around 13 to 40. Sonoma County’s proximity to San Francisco could indicate a draw for SF people looking for a little more space for social distancing.
Urban versus rural
Prices are going up in rural and suburban areas, but not so much the quantity of listings. Redfin says that new listings in rural areas fell 14.2% year over year, and they dropped 3.6% in suburban neighborhoods. In urban areas, new listings were flat from last year, further evidence that demand is outpacing supply in the suburbs more than the city and an indication that current homeowners in rural areas are more content with their living situations than current homeowners in urban areas.
For homes in rural areas nationwide, the median sale price increased 11.3% year over year in the four weeks ending August 2, and it rose 9.2% in suburban areas. Urban areas saw a smaller 6.7% home-price increase. Homes in rural areas have had higher price growth than suburban and urban areas since April.
Therefore, home prices are increasing in large part because there’s not a lot of new construction and because existing homeowners don’t want to sell. Zillow has seen about 29% fewer homes that are actively listed compared to this time last year.
And the most price competition is currently on the outskirts of that area and the least in the city center. Spacious, single-family homes are particularly in demand. But cities are not dying – in fact, most cities are seeing a boom in home prices too. But with remote work freeing many people from daily commutes, people are increasingly deciding that it’s fine to live further away from the office.
Will Zoom towns last?
Post-pandemic, buyers may realize that while their new towns or neighborhoods make for a nice weekend getaway, the long commute may become unsustainable should things go back to normal. And they’ll miss city amenities like high-quality restaurants, shopping centers and walkability.
Lenders might possibly have concerns that rural markets are so affected by situational price increases. Rural home values are going up now because of the pandemic, but if people lose their jobs or decide they’d rather live closer to the city again, these buyers may be sitting in homes for which they’ve overpaid a time when they might need or want to re-sell.
What should you do?
Regardless of what’s going on with Zoom towns, urban, suburban and rural areas, and what you want to do about it, you’ll need an expert real estate agent to help you navigate the complexities of all of this, whether you’re planning to buy a new house or sell your old place.
Trelora’s agents have more experience than 99% of all other agents in the business. We also can help you save some serious money, and in this time of pandemic and economic uncertainty, few things are more important. When you sell your house with us, we’ll do it for a low flat fee and no hidden additional costs. When you buy a house with us, we’ll split our commission with you, up to $6,000 cash back!