Covid induced flight to the burbs and heartland: Long term??

[the urban politician]

A Prairie Home Contagion

In the booming world of homebuilding, major players are stampeding into parts of the country long overlooked. All signs point to an escape from NewYork — Kansas City, here I come.

By Ashley Gurbal Kritzer
Senior Reporter, Tampa Bay Business Journal

America’s heartland is positioned for a post-pandemic housing boom if current trends continue.

In greater Kansas City, approvals to build single-family homes were up 26% year to date through September. So, too, were the Rust Belt cities of Columbus, Ohio, and Fort Wayne, Indiana. Near Fort Collins, Colorado, they rose 47%, and the rural area around Clarksville, Tennessee — just north of Nashville and south of the Kentucky border — reported a 63% increase, tops in the country among major metros The Business Journals analyzed.


Robert Dietz, chief economist for the National Association of Home Builders in Washington, D.C., said it’s no surprise the country’s biggest homebuyers are thundering into more rural, less populous, areas of the country. He said the coronavirus and its effects on remote-work policies have turbocharged buyer demand for bigger homes and a flight from congested urban areas, a trend that’s already triggered a surge in building activity in places long dismissed as too far-flung from hot job markets and top-ranked research clusters.

Meanwhile, the reverse is playing out for many of the priciest and traditionally most sought after housing markets.

Among the 354 metropolitan areas The Business Journals analyzed, 236 reported year-to-date increases in single-family building permits through September, with areas in the Midwest and South recording the largest increases. Conversely, pricier and more congested metros — most notably California’s Bay Area as well as Denver and New York City — saw the largest one-year declines.

“Columbus and Indianapolis — those kinds of cities are going to emerge as winners over the next few years,” Dietz said.

Indeed, Covid-19 has relegated people to their homes for activities once reserved for commercial real estate. Home schooling, home workouts, home offices — all are driving buyers toward larger residences. And because they’re spending less time commuting, those same buyers are proving increasingly willing to move farther from city centers to larger spaces at affordable prices.

The phrase “drive ‘till you qualify” was a mainstay in the housing runup of the early aughts. In those days, spurred by lax mortgage requirements, buyers flocked to the affordability of distant exurbs. The pendulum has swung back in the exurbs’ favor, as the novel coronavirus has consumers rethinking their homes — and driving ‘till they qualify — now that remote work appears here to stay.

“It’s a function of the fact that telecommuting increases the ability of renters and homebuyers to expand their tolerable commute times,” Dietz said.

None of which has escaped the nation’s homebuilding giants. In recent earnings calls, Miami-based Lennar Corp. said that most categories of its home sales rose significantly year over year and that it was “ramping up” land purchases to keep pace with homebuilding. Likewise, PulteGroup Inc. CEO Ryan Marshall recently said signs of an emigration to the ’burbs already are afoot.


Pulte’s share price through Oct. 26 was up 10% for the year, and Lennar’s climbed 34%.

“While we can debate the magnitude, ZIP code-level analysis on buying patterns points to a movement of renters and homeowners from urban centers into the surrounding suburbs,” Marshall said during the company’s second-quarter earnings call.

Meanwhile, all signs point to a continued expansion of homes’ average size.

In a September housing report, Moody’s Investor Services said “the new realities of virtual living” have given new value to amenities such as space, flexible layouts, backyards and customized technologies.


“These factors contributed to favorable demand trends amid the pandemic, which we believe will continue for years to come, including after the vaccine is found and risk of Covid-19 infection subsides,” it said.

Housing experts said the shift could push the average U.S. home to roughly 3,000 square feet, or 37% larger than it was 20 years ago. According to the U.S. Census Bureau, 46% of new single-family homes topped 2,400 square feet in 2019, versus 34% in 1999.

https://www.bizjournals.com/chicago/...om-cities.html

[craigs]

Covid induced flight to the burbs and heartland: Do we have evidence to prove this is even a real thing?

[the urban politician]

Originally Posted by craigs

Covid induced flight to the burbs and heartland: Do we have evidence to prove this is even a real thing?

Well, you could read the article that, ya know, accompanied the thread opening post

Just a suggestion.....

[Crawford]

Originally Posted by craigs

Covid induced flight to the burbs and heartland: Do we have evidence to prove this is even a real thing?

Nope.

It doesn't even make any sense. Can someone explain why a family who preferred urban living pre-Covid would prefer suburban or rural living post-Covid?

Tons of wealthy urbanites, especially in the NY area, have weekend homes. During the height of Covid, everyone went to their weekend homes, since you obviously wanted to be outdoors instead of stuck in an apartment. But since Labor Day, almost everyone has returned.

The whole "rural boom" has dissipated. In fact prices for weekend properties have dropped since September. People aren't gonna take their kids out of Ivy League factories to some random rural school, and say good bye to all their friends, colleagues and favorite haunts for some backwoods cabin. And, at least in the Northeast, the weekend homes are on well water/septic, usually have rougher climate, with frequently snowed-in roads. These aren't for full-time residency.

Even the Hamptons have very limited winter amenities, and really only one small private school of note. Only a handful of wealthy will live year-round in the Hamptons.

[Centropolis]

Originally Posted by Crawford

Nope.

It doesn't even make any sense. Can someone explain why a family who preferred urban living pre-Covid would prefer suburban or rural living post-Covid?

Tons of wealthy urbanites, especially in the NY area, have weekend homes. During the height of Covid, everyone went to their weekend homes, since you obviously wanted to be outdoors instead of stuck in an apartment. But since Labor Day, almost everyone has returned.

The whole "rural boom" has dissipated. In fact prices for weekend properties have dropped since September. People aren't gonna take their kids out of Ivy League factories to some random rural school, and say good bye to all their friends and colleagues for some backwoods cabin.

theres a difference between “does it make sense for rich people” and “is it happening?”

its a thing in big california cities for well educated but financially lower middle class people who are almost 40 and have been renting their entire lives to stay in west LA or commutable to central los angeles or the bay area and now are free from the commute but want to stay (and finally buy) in california.

again, you’re speaking for wealthy people or people with access to family resources that insulate them from a lower middle class or even working class material reality.

[chris08876]

Some of these folks are moving to the suburbs because they can't afford the city.

For example, in NYC, those folks fleeing are due to prices. They were leaving prior to that, as they have been for years and years. Folks aren't leaving because of Corona.

Corona just pushed them to make the move given lower interest rates, and a prime time to make a purchase, but it was bound to happen for those that can't afford or are beyond their comfort zone for cost-of-living. Similar in California.

You'll see younger kin buying homes as well. AGAIN, PRIME TIME for home purchasing. Lower interest rates, housing price drops, and occupants dying off, so prime time for buying a home. Assuming one has a job or stable income of course.

In some cities, due to lower rents or price drops on condos and so on, a good opportunity at the moment.

So Corona might result in opportunity for younger kins.

[Crawford]

Originally Posted by Centropolis

again, you’re speaking for wealthy people or people with access to family resources that insulate them from a lower middle class or even working class material reality.

Yes, but I'm responding to most of the media-driven hype of wealthy urbanites moving to the woods. The endless articles about Manhattanites moving to deep woods cabins outside Woodstock and Saugerties.

There was a spring-summer boom in such real estate, but, again, it isn't for year-round living. These are weekend places for the 1%, not permanent homes.

Working class households aren't gonna move on a whim, because they don't have the resources to do so.

And I don't think anyone is moving because of an assumption that their jobs are permanent WFH, given A. There's no evidence that people are forced to live in a geography because of a job (do people in the Bay Area really hate living in the Bay Area? Is this really a thing and they would mostly rather be in Nebraska?) and B. There's no evidence of what happens to WFH post-pandemic (who would move now when you'll likely have greater clarity regarding WFH in 2021?)

[chris08876]

Also costs money to sell a home, real estate commissions and other closing costs. So some folks can't afford to sell. But the ones leaving, they were planning in most cases to leave prior to the pandemic. The circumstances just made it a prime time to leave. Folks like to paint a picture of NYC for example, like there is a mass exodus, but New Yorkers aren't leaving like its the apocalypse. Its all sensational bs.

The city is not dying, not crumbling beneath the seams. Granted there's issues, but its not the warzone and hellish landscape folks like to paint it as. If one is glued to Fox, possibly but real folks in the tri-state know that everything is ok. Some issues but not the apocalypse.

[the urban politician]

Originally Posted by Centropolis

theres a difference between “does it make sense for rich people” and “is it happening?”

its a thing in big california cities for well educated but financially lower middle class people who are almost 40 and have been renting their entire lives to stay in west LA or commutable to central los angeles or the bay area and now are free from the commute but want to stay (and finally buy) in california.

again, you’re speaking for wealthy people or people with access to family resources that insulate them from a lower middle class or even working class material reality.

Exactly. Like all things from Crawford, chalk it up to his usual snobbery and anecdotal observation based on what he’s “heard” from wealthy people. Meanwhile I provided an article with real numbers while he didn’t.

[Crawford]

Originally Posted by the urban politician

EMeanwhile I provided an article with real numbers while he didn’t.

So you want an article with "real numbers" and then I've "proved" something that cannot be proven either way at this point?

Well, home sales are surging in Brooklyn, during the pandemic. I guess this "proves" that people are fleeing sprawl for urbanity, because I found an article.

Home Sales Surge in Brooklyn
https://www.nytimes.com/2020/09/24/r...ate-sales.html

You realize there are no "numbers" that "prove" anything, right? There's no national database of real estate valuations. And if there were, there would be no way to ascertain what happened until post-pandemic, so we're all making our best guesses. And even then, there would be correlation-causation issues (did something happen because Covid, or economic crash, or tax changes, or lack of immigration, or whatever).

[jtown,man]

Originally Posted by Crawford

Nope.

It doesn't even make any sense. Can someone explain why a family who preferred urban living pre-Covid would prefer suburban or rural living post-Covid?

Tons of wealthy urbanites, especially in the NY area, have weekend homes. During the height of Covid, everyone went to their weekend homes, since you obviously wanted to be outdoors instead of stuck in an apartment. But since Labor Day, almost everyone has returned.

The whole "rural boom" has dissipated. In fact prices for weekend properties have dropped since September. People aren't gonna take their kids out of Ivy League factories to some random rural school, and say good bye to all their friends, colleagues and favorite haunts for some backwoods cabin. And, at least in the Northeast, the weekend homes are on well water/septic, usually have rougher climate, with frequently snowed-in roads. These aren't for full-time residency.

Even the Hamptons have very limited winter amenities, and really only one small private school of note. Only a handful of wealthy will live year-round in the Hamptons.

Crawford, most people don't have weekend homes.

Anyways, what I know FOR SURE when it comes to Covid is that it will have a real impact on cities.

If just 10% of officers go fully WFH model, you'll see massive impacts. How many people live in central Chicago, for example, not only for the city life but also to be a ten minute train ride from work? Or a 10 minute walk? Now their job is 100% online, they could move back to some small town in Kentucky and buy a nice house with their Chicago income. This is going to be a very attractive option to many.

If my school were to announce they would remain online for the next year, me and my girlfriend would have 100% moved. With the money we have here, we could be extremely comfortable in most places not on the East or West coasts. It's going to be an extremely tempting option for many. The being able to walk to a lot of places isn't gonna keep everyone in place.

And thats the point. Articles like these usually paint things in black and white. CITIES ARE EMPTYING!!!! But it doesn't have to be a majority of people, if only a small percentage of people make the move from cities, it will have ripple impacts that will have huge effects on cities for years to come.

[Crawford]

Originally Posted by jtown,man

Crawford, most people don't have weekend homes.

At least in the NY area, a very high % of upper income urbanites have weekend homes. I'd say most of our friends have weekend homes (or at least access to weekend homes via parents or relatives), and they aren't all HNWI.

Even pre-Covid, if you visited a wealthy Manhattan neighborhood on a summer weekend, it would be a virtual ghost town, except for tourists/visitors. This is because upper class families generally have homes elsewhere.

Originally Posted by jtown,man

If just 10% of officers go fully WFH model, you'll see massive impacts. How many people live in central Chicago, for example, not only for the city life but also to be a ten minute train ride from work? Or a 10 minute walk? Now their job is 100% online, they could move back to some small town in Kentucky and buy a nice house with their Chicago income. This is going to be a very attractive option to many.

No. People live in core Chicago because they like urban living. No one is living in downtown Chicago and secretly pining for rural KY. It's an absurd premise.

Even pre-Covid, there was huge reverse commuting into Chicagoland suburbs, because many younger people really prefer cities, enduring horrible commutes. There were many people working remotely from city centers (I have a friend working 100% remote for American Express since the early 2000's and living in Lower Manhattan; he could technically live anywhere).

My sister was a dentist living in downtown Chicago for many years. She commuted to Bourbonnais, which is a rural town south of Chicago. It was an absolute hell commute, especially in the winter, but she did it because she wanted city life. She could have made more money outside of major metro areas, due to a shortage of dentists. She could have had no commute if she moved to rural Illinois. But those were never considerations, because she valued urban living.

I don't know a single person who lives in an expensive urban core because of a job. It doesn't make any sense, because all the urban cores have cheaper suburban areas nearby, so if you dislike urban living, there are already much better nearby options. No one has to live in a city center. You can already commute to Chicago's West Loop faster from Oak Park or Evanston or than from many core neighborhoods (due to Metra).

[jtown,man]

Originally Posted by Crawford

At least in the NY area, a very high % of upper income urbanites have weekend homes. I'd say most of our friends have weekend homes (or at least access to weekend homes via parents or relatives), and they aren't all HNWI.

Even pre-Covid, if you visited a wealthy Manhattan neighborhood on a summer weekend, it would be a virtual ghost town, except for tourists/visitors. This is because upper class families generally have homes elsewhere.


No. People live in core Chicago because they like urban living. No one is living in downtown Chicago and secretly pining for rural KY. It's an absurd premise.

Even pre-Covid, there was huge reverse commuting into Chicagoland suburbs, because many younger people really prefer cities, enduring horrible commutes. There were many people working remotely from city centers (I have a friend working 100% remote for American Express since the early 2000's and living in Lower Manhattan; he could technically live anywhere).

My sister was a dentist living in downtown Chicago for many years. She commuted to Bourbonnais, which is a rural town south of Chicago. It was an absolute hell commute, especially in the winter, but she did it because she wanted city life. She could have made more money outside of major metro areas, due to a shortage of dentists. She could have had no commute if she moved to rural Illinois. But those were never considerations, because she valued urban living.

I don't know a single person who lives in an expensive urban core because of a job. It doesn't make any sense, because all the urban cores have cheaper suburban areas nearby, so if you dislike urban living, there are already much better nearby options. No one has to live in a city center. You can already commute to Chicago's West Loop faster from Oak Park or Evanston or than from many core neighborhoods (due to Metra).

So everyone living in downtown Chicago are there because they love city life? Funny, a girl just posted in a local apartment facebook group that she needs an apartment downtown, but it must be within walking distance of her job at a hotel. Anyways.

My point wasn't that the majority of people would move. It's that a big enough percentage will. It's not like someone who lives in downtown Chicago will move to some random Kentucky town. It's that with having the mobility to live anywhere, they might move back to their kentucky town so they will have free babysitters etc.

Again, I am not saying this will be the case for the MAJORITY of people, but it will impact enough to have a ripple effect throughout the entire urban landscape. Also, when 20-40% of service locations close down downtown, there will be less reasoning to live in a dense location.

[the urban politician]

The reason I think the trends are long term:

1. Many people will permanently work from home
2. People will try to get the most out of their money (ie space for cheap)
3. Once one owns a home, locked into a low interest rate mortgage, they are much more likely to stay put than if they were renting

[Centropolis]

funnily as a midwesterner i’ve only really heard of this happening en masse in metro LA where our friends are heading to the san bernardino mountains and work contacts in boston with new hampshire, etc.

it’s a big country and the midwest/heartland isn’t the only escape.

[dave8721]

Isn't the heartland the hardest hit part of the US for covid right now?

[LA21st]

Yes lol. Covid is much worse there right now.

[Steely Dan]

Originally Posted by LA21st

Yes lol. Covid is much worse there right now.

Yeah, that's seems like a situation that a normal and well-adjusted person would lol about.

"OMG! your rona is so much worse than ours, hahaha!!!"

[LA21st]

Good grief.
I wasn't laughing because it's worse there. I have good friends in Chicago. I had a strain of covid in may.
It was kind of humorous that the article is saying the midwest is going to benefit the most but at the time, its not the best place to be.
Its more about the timing of it.

But ya know, keep judging as you.do. It seems to be often.

[The North One]

Originally Posted by Steely Dan

Yeah, that's seems like a situation that a normal and well-adjusted person would lol about.

"OMG! your rona is so much worse than ours, hahaha!!!"

Considering who it's coming from, are you surprised?