Pricey Suburbs Take Lead in Most Popular Markets
It’s not exactly a race, but so far in 2022, home values in the suburbs sped ahead of urban growth values, continuing a trend began last summer, said Zillow, Seattle.
The Zillow analysis of page-view traffic, home value growth and for-sale inventory for more than 1,000 cities found the most popular market in early 2022 is Woodinville, Wash. Burke, Va., and Highlands Ranch, Colo., round out the top three, followed by Westchase, Fla., near Tampa; and Edmonds, Wash., in the Seattle metro
Notably, every city on Zillow’s 10-most-popular-markets list is a suburban area roughly 30 minutes from the nearest city center. In each suburban area, home values are growing faster than in the metro’s largest city.
Zillow economist Nicole Bachaud said remote work is a key reason suburban home values are now growing faster than those in urban areas, as home buyers are prioritizing space and affordability over a short commute.
“The most popular markets so far this year paint a picture of how remote work has changed the U.S. housing landscape,” Bachaud said. “Demand for suburban homes found an extra gear last summer, perhaps as buyers gained more clarity in their employers’ return-to-office policies. Research suggests the rise of remote work is responsible for roughly half of home price growth during the pandemic. How many employers continue to allow this flexibility for employees to live where they choose will go a long way toward determining which markets are most in demand in the future.”
The analysis also noted especially strong home buyer interest has caused suburban home values to grow faster than home values in urban areas, a reversal of previous norms and from the first 15 months of the pandemic. Remote work is a driving force behind this shift, prompting home buyers to prioritize affordability and space over a short commute. More than half of the gain in U.S. home prices since late 2019 can be attributed to remote work, according to research from the National Bureau of Economic Research.
The suburbs that beat out all others to top Zillow’s latest list of the most popular markets are seeing home values grow faster on a quarterly basis than the principal city in their metro area, indicating stronger demand. Eight of the top 10 have a typical home value higher than their nearby principal city, and seven of those have a typical home value that’s more than $150,000 higher.
Regionally, Havertown, Pa., outside of Philadelphia, is Zillow’s most popular market in the Northeast, edging out four Boston suburbs: Billerica, Framingham, Waltham and Arlington. In the central region, Ballwin, Mo., near St. Louis, is joined in the top five by Grand Rapids, Mich., and three pricey Dallas suburbs: Coppell, Plano and Prosper. Denver suburbs dominated the mountain region, taking the top eight spots in Zillow’s rankings.
Rounding out the overall top 10: Yorba Linda, Calif. (Los Angeles); Johns Creek, Ga. (Atlanta); Tustin, Calif. (Los Angeles); Ballwin, Mo. (St. Louis); and Golden, Colo. (Denver).