Real estate transactions slowing as first-time homebuyers get priced out of market: Expert
Brown Harris Stevens CEO Bess Freedman weighs in on home prices soaring as supply shrinks and demand peaks.
Living farther from work is a housing trend that has grown during the coronavirus pandemic.
Extensive data analysis published by Zillow shows Americans are opting for larger or more affordable homes that require additional travel time to and from big cities.
Zillow is calling this new housing phenomenon the "Great Reshuffling."
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"Home buyers are placing less of a premium on a short commute thanks to the rise of remote work. Americans are searching for a combination of affordability and more space, whether that's outdoor space or an extra bedroom to turn into a home office," said Zillow’s economic data analyst Nicole Bachaud. "In expensive, dense markets, that usually means a home farther out from the downtown core, which is more palatable when you don't need to commute every day, if at all. In more sprawling metros, buyers are flocking to less expensive downtown cores, bringing a renewed interest to these city centers."
According to the real estate marketplace’s Commute Times to Downtown Core and Housing Costs map, 11 out of 18 of the "most expensive" U.S. metros are seeing falling home values while the seven other metros are showing some of the slowest growth.
For example, homes that are within a 10-minute commute in New York, San Francisco, Boston, Chicago and Dallas are seeing home value declines and/or slow growth while homes that have a longer commute in Phoenix, Charlotte and Austin are seeing home value increases and quick growth.
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New York homes with a 10-minute commute are $73,673 cheaper than what was previously seen in 2019, according to Zillow, whereas Austin homes with the same commute time are $229,553 more expensive than it was two years ago – which has contributed to home value surges within 40 minutes of the Texas city.
"This research suggests home buyers who no longer have to be in the office five days a week are prioritizing affordability and space over commute time when shopping for a home. As a result, many of the fastest growing housing markets are farther from city centers," Zillow’s home trends expert Amanda Pendleton, told FOX Business. "That shift may open up new housing opportunities for people who have always wanted to live in an urban core. Home values within a 10-minute commute of downtown Boston, New York and San Francisco have slightly fallen over the past year, meaning a shopper looking to buy in the core of those metro areas could have a little bit more buying power, more options and less competition today than two years ago. The opposite is true in much of the Midwest, where home values closer to downtown are surging the fastest."
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