To all the agents in the house,
Sure, the pandemic affected where people move, but has its impact been overrated?
I thought of this during Zillow's earnings call this month when Rich Barton presented the shift as nothing less than a major, modern social phenomenon.
"The pandemic has joltingly and dramatically unbundled work from location for many, creating a new flexibility by enabling people to optimize for work and location separately and simultaneously," Barton said on the call. "Moving to the big city is no longer a requirement for many job seekers and the shift will inevitably disperse talent and economic opportunities. This untethering of location from work feels deeply important to me for the future of work and life and by implication, what we've been calling the great reshuffling."
On that note, there have been several stories of people leaving coastal California and New York City, packing up to an idyllic rural enclave or mid-sized city. HousingWire itself examined the Knoxville, Tennessee market back in June, where home values soared 22% year-over-year to $261,000, per Zillow's own economic numbers.
Knoxville is but one example. Home values are up 45% in Boise over the past year, 27% in Colorado Springs, even 16% in windy Wichita, Kansas (all Zillow numbers).
But that begs the question of where home values are dropping, or at least not increasing so much. They aren't in Los Angeles. Despite the country's second biggest city being overwhelmed many times over by the pandemic, the city's homes have experienced a 19% jump in value, again per Zillow. Nor have they in San Diego: the eighth-most populous city in the country has seen home values climb 23% to $849,200 despite its own repeated struggles to manage COVID-19.
Perhaps San Diego, despite being America's eighth-most populous city, is not your idea of "the big city." Then, what cities count as being reshuffled out?
As best I can tell, the answers are New York City and San Francisco.
According to Zillow numbers, New York City home values only climbed 4.1% in the past year, though the figure lumps together Manhattan, Staten Island, and all the other boroughs. But the city added 629,000 people since 2010, per U.S. Census Bureau figures, after prior years of decline.
San Francisco, meanwhile, saw home values increase only 5% but it was to $1.5 million. Agents I speak with in San Francisco tell me the same story as agents I speak with anywhere else in the country. High-demand, low-inventory. "People that can afford to live in San Francisco still want to," said Heidi Mueller of Engel & Volkers.
I don't know if home values are the fairest way to measure what Barton is talking about (agents, let me know if there's a metric you think I should examine). But they do provide a baseline of a property's demand and desirability.
There's evidence that overall U.S. home ownership demand remains high. Home sales dipped the last few months, but prices continue to climb. But I haven't seen any compelling data that supports the "great reshuffling" theory.
Agents, am I wrong? Will the numbers soon catch up to maybe what you're seeing on the ground? What do you think of this idea of a demographic shift?
Please reply anonymously (meaning I won't quote you without permission) to mblake@housingwire.com.
Sincerely,
Matthew Blake
Senior Real Estate Reporter
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