The suburban shift resulting from the pandemic continues, but for the first time since early 2020, interest in urban areas is notably up. Homebuyers today look to outlying metros for more space and affordability because many no longer need to worry about proximity to the office. Rents in the largest U.S. cities have increased 11.4% just this year whereas typical rent growth averages at 3.3%, says Realtor.com. With companies returning to the office, there’s been an uptick in buyers looking for real estate in cities.
But as more people are required to work in person, Zakinova has seen a shift again in people looking for real estate in cities. The S&P CoreLogic Case-Shiller Home Price Index rose to 254.92 in May — the largest growth since the index was started.
“I feel that unless you are really in a position where you are more than a six figures earner, you definitely have no opportunity in New York. You definitely need to double income, triple income in order to qualify for the mortgage,” Zakinova said.
Miranda Penning graduated from college in May and just got a job in New York City that is hybrid, with the option to work from the office or remotely. She has been actively looking for an apartment in New York City using StreetEasy to search for apartments
“Just a rule of thumb that a lot of people told me for, a budget is just that you want to spend max like 30% of your annual salary on housing,” Penning said, “So I’ve taken that into consideration when setting my max budget.”
In the U.S. the median price of newly built homes increased by 6% from June 2020 to June 2021 while new home sales fell to a pandemic low, according to data released by the U.S. Census Bureau on July 26.
The low interest rates, shortage of supply of homes and government support have contributed to this rise in home prices.
Buyers that are getting bid out or can’t afford a home in this market, are turning to rentals or staying on the sidelines, Bruno Aropovia, a realtor in Phoenix said.