Life as we know it has changed in virtually every way since the start of the pandemic. Whether it is working remotely from home, wearing a facial covering on an airplane, or even downloading a restaurant menu via a QR code on our cell phone, many aspects of life have changed. As with many aspects of life changing, so has the real estate market. An example of this would be real estate values near metropolitan areas and business districts as compared to values for properties further away in suburban areas.
The Great Reshuffling
As remote working conditions have become more commonplace since the start of the pandemic, many Americans have decided to move. In many cases, these Americans are even opting to move to a different state altogether. This has been termed The Great Reshuffling. Interestingly, it is resulting in a new trend for home values as well.
Historically, the closer a home was located to a major city where many businesses were, the higher the home value and even rate of appreciation. In fact, it is quite logical to think that the shorter the commute to work, the higher the home value. With this said, the pandemic has flipped this conventional thinking. In fact, a recent analysis showed that median home prices in areas with few public transportation options rose 32.8% between January 2020 and May 2021. Meanwhile, home prices in transit-accessible neighborhoods rose 15.6% in the same period. In other words, the pandemic has created such a high demand for more space in the suburbs that we are actually seeing this reflected in the price appreciation for these homes located further away from big cities.
In some extreme cases such as New York, a 10-minute commute to the city is now $73,673 cheaper than it was in 2019. Of course, there are also other factors such as increased crime rates and overall mismanagement of the city that are contributing to these statistics. Nonetheless, many Americans have embraced the remote working environment and are opting to move. In the event that some of these employers are requiring a return to the brick and mortar office, many employees are even deciding to find employment elsewhere that will accommodate working from home.
Traditionally, home prices in metro areas have accelerated faster in neighborhoods closer to job centers. However, now the pandemic has completely flipped this trend. Interestingly, we have noticed a trend from Americans wanting to move to the suburbs beginning in 2017 or so. Of course, the pandemic has only accelerated this trend to the point that we now see higher home price appreciation in these markets.
South Florida continues to benefit from The Great Reshuffling with many Americans relocating here from other states. With many employers opting to permanently adopt a work from home model, this should only keep the demand for South Florida real estate at a high level.
Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. At Live South Florida Realty, Inc., we have been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our recently launched “Florida Home Search” app is now available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!