What Silicon Valley Exodus Means For Housing Demand
Q: My brother who has been working in Silicon Valley moved to Idaho where rents are cheaper and is working from home. Will this trend lower housing prices in cities across the US? David, New Brunswick, NJ
A: There was definitely an exodus of people from Manhattan in the early days of the pandemic particularly when infection rates were very high in March and April of this year as people migrate looking for more space–a similar phenomenon occurred in San Francisco. In both Manhattan and San Francisco, which are the two most expensive real estate markets in the US, housing inventory is nearly double what it was last year, as homes are staying on the market twice as long as last year.
Outside Manhattan and San Francisco, however, urban housing markets across the US at least for now are keeping pace with the suburbs.
However, home price growth has dropped more in urban areas than in suburban areas across the country. In urban areas, median home price growth is down over 9% from before the pandemic to the end of June, but down just over 3% in the suburbs. More than the increase in telecommuting, the main issue that affects housing in markets across the country as was the case before the pandemic is housing inventory shortages.
Thanks for your question, David.
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