Is Location Still Important?
Since the dawn of real estate, it has been debated whether the house or its location is the most important factor in determining value and desirability. Many believe it is the ‘location, location, location’ that has the greatest impact on future resale value and appreciation, rather than the home or building.
Lots of realtors advise prioritizing a home’s location over the characteristics of the house itself. Proximity to amenities, transportation considerations, and accessibility to good schools are some reasons why location is more important, they say.
But how have changes in home-buying preferences during the COVID-19 pandemic affected this narrative? Is it better to be close to a bustling city or out in the suburbs? Well, it all depends.
How Did COVID-19 Change The Real Estate Market?
The term ‘America’s Great COVID Migration’ refers to the unusually large flow of urban residents that moved out of historically desired cities, like San Francisco and New York, to more suburban and rural areas during the height of the pandemic.
Explanations of the shift out of the cities can be extensive, and sometimes far-reaching. But some commonly accepted reasons are urban residents not wanting to pay premium home and rent prices for proximity to amenities not available during the pandemic, like restaurants, museums, and theaters. Coronavirus-induced quarantines also resulted in the rise of remote workers, who have enjoyed the flexibility of working from anywhere, allowing them the ability to move out of business hubs like downtown metropolitan areas.
The great COVID migration has resulted in changing buyer preferences, too. Based on a survey from realtor.com, more home shoppers are looking for more space, quieter neighborhoods, home offices, newer kitchens, and access to the great outdoors since the onset of the pandemic.
Home buyers have also been looking for more affordability since the start of the pandemic. For example, home values surged in the Kansas City and Cleveland metro areas, where urban prices were relatively affordable.
Home buyers are even reaching for their dream home spots more than ever before, as there is a 66% growth in pending home sales in vacation towns.
Are Pandemic Real Estate Trends Here to Stay?
The question is, will buyers return to cities, making the metropolitan locations sought after like they were pre-pandemic? Well, there is a resurgence in living and buying in cities as places have reopened more with fewer COVID outbreaks, but it appears that the amount of homeowners who want to live in a city location has decreased permanently.
According to a Pew Research study, about one-in-five U.S. adults now express a preference for living in a city, down from about a quarter in 2018. On top of this data, those who would like to live in a suburb has increased from about 42% to 46%.
With these new trends, suburban areas have become a hotbed for buying activity. Home values in suburbs outside cities have jumped 30% since February 2020.
All of this is largely attributed to the new working environment, as more than a third of jobs can be performed from home. People are enjoying the benefits of more family time and even productivity, as they work remote or hybrid and don’t have to live as close to the office.
Because of the new remote and hybrid work climate, it appears growth in suburban areas will continue at levels greater than it would have pre-pandemic.
What Makes A Good Location?
With suburban and rural areas on the rise, it begs the question as to what else makes a good, desirable location. Four factors to consider when choosing a properties location are as follows.
- Centrality– where your home is located within a town or city will certainly affect its price. For example, if you are closer to the main shopping and dining areas, it is likely the price will be more than if you were located further away.
- Neighborhood Appeal– the quality of a neighborhood, such as its accessibility to major transit routes and amount of amenities, will certainly dictate the value.
- Development– are there new development possibilities, such as building new schools or other infrastructure nearby? If so, this will make the location more valuable in the future.
- Lot Location– properties off a busy road or right next to a commercial property with lots of traffic tend to be harder to sell.
Final Thoughts on Property Location
Location does in fact matter. And it always will.
As demonstrated from an analysis of shifting buyer preferences with the COVID pandemic, where a property is located (urban, suburban, or rural), and its proximity to an area’s center and amenities, has great influence over its current and future price.
With the rise of remote and hybrid work, millions of Americans can live much further from the office or wherever they so choose. Because of this, the value of suburban areas is on the rise.
Always consider location in your home hunt and decision-making. What you value and want from a property ultimately determines what location is most important to you.
Call Build or Buy Guy to Find the Home and Location Right For You!
Jason Williams – Build or Buy Guy – is the expert in real estate. His passion for the profession will ensure he finds you the property of your dreams.
If you want to learn more or to schedule a consultation or home assessment, Contact me here or call me at (208) 401-4066 to get started.
References
Bureau, U. S. C. (2022, April 13). Remote working, commuting time, life events all affect home buyers’ decisions. Census.gov. Retrieved July 13, 2022, from https://www.census.gov/library/stories/2021/10/zillow-and-census-bureau-data-show-pandemics-impact-on-housing-market.html
Parker, K., Horowitz, J. M., & Minkin, R. (2022, February 1). Americans are less likely than before covid-19 to want to live in cities, more likely to prefer suburbs. Pew Research Center’s Social & Demographic Trends Project. Retrieved July 13, 2022, from https://www.pewresearch.org/social-trends/2021/12/16/americans-are-less-likely-than-before-covid-19-to-want-to-live-in-cities-more-likely-to-prefer-suburbs/
Semuels, A. (2022, March 11). Return to the office? not in this housing market. Time. Retrieved July 13, 2022, from https://time.com/6156751/remote-work-office-housing-market/
Struyk, T. (2022, June 29). The factors of a “good” location. Investopedia. Retrieved July 13, 2022, from https://www.investopedia.com/financial-edge/0410/the-5-factors-of-a-good-location.aspx
Taylor, P. L. (2021, December 10). Covid-19 has changed the housing market forever. here’s where Americans are moving (and why). Forbes. Retrieved July 13, 2022, from https://www.forbes.com/sites/petertaylor/2020/10/11/covid-19-has-changed-the-housing-market-forever-heres-where-americans-are-moving-and-why/?sh=2ff1c5e61fe1
