WSJ article about increased housing speculation in the suburbs

[PDXTabs]

The WSJ has an interesting article about how Rental Home Construction Climbs as Purchase Prices Surge: Investors are betting Americans will keep flocking to spacious suburban living even if they can’t afford to buy. How soon folks forget.

[ketchup]

My house sale in the suburbs closed this week.  Up 73% from when we bought in 2015.  No way I couldn't cash that out.

Predictions are hard, especially about the future, but in certain areas it's feeling a lot like 2006.

[BlueMR2]

Value of our house is up 25% just in the last year.  Have received multiple calls from housing speculators wanting to buy my house.  It's crazy right now in the suburbs.  Downtown was already decaying, but since COVID hit it's become a ghost town as everyone is moving to the suburbs.

[Just Joe]

Neighbor's house went up for sale. $550K. Its happening here in this small town too. 2008 indeed. Spillover from a big city an hour away?

In my mind there are a very limited number of people here that can afford a house in that price bracket. Clearly I'm wrong.

The signs are there - make sure you have a healthy pile of acorns and walnuts piled up in case the economy dies for a couple of years again.

[stoaX]

To the extent people are moving due to covid, that's a big response to a temporary problem. 

[PDXTabs]

To the extent people are moving due to covid, that's a big response to a temporary problem.

That's definitely my take.

[WhiteTrashCash]

To the extent people are moving due to covid, that's a big response to a temporary problem.

A lot of people who had moved to cities for convenience have also changed their minds due to the civil unrest that’s been going on in a lot of places. It’s safer for your property living in the suburbs and now the trend is remote working, so people don’t need to commute to the city anymore.

[cool7hand]

To the extent people are moving due to covid, that's a big response to a temporary problem.

That's definitely my take.

+another

[NorCal]

To the extent people are moving due to covid, that's a big response to a temporary problem.

That's definitely my take.

+another

I don't have a subscription, so I can only read the first paragraph.

My hypothesis is a bit more nuanced.  Many moves are driven by "life stage" changes.  For example, 20-somethings move to small apartments in big cities.  They move to the suburbs as 30-somethings when they get married and plan to start a family.  They trade-up to bigger houses in the suburbs as 40-somethings.

I expect a lot of the people moving now are those who would have moved to the suburbs in the next year or two anyways.  It's not like they'll move back to the cities next year now that they've settled into their new suburban house.

While I think it's reasonable to expect urbanization trends to slowly revert back to their old norm, I think it will be a slow process over multiple years.

Also, I don't think increasing prices are indicative of another housing bubble at this point.  It's just indicative of shifting demand.  It will be a different story if homebuilders keep building and building and building even when demand slowly declines.

[Just Joe]

Are the sizes of the various demographics part of the equation here?

[Paper Chaser]

The two most common answers for wanting to live in a city are  "There's so much to do there", and "That's where the jobs are".
Covid has stripped both of those things away, and there's a lot of uncertainty about how either one might be in the future if they return at all.

Record economic growth in recent years (increased liquidity), coupled with record low interest rates (increased buying power) has provided enough lubrication to make a lot of people take the plunge.

[bacchi]

The two most common answers for wanting to live in a city are  "There's so much to do there", and "That's where the jobs are".
Covid has stripped both of those things away, and there's a lot of uncertainty about how either one might be in the future if they return at all.

Record economic growth in recent years (increased liquidity), coupled with record low interest rates (increased buying power) has provided enough lubrication to make a lot of people take the plunge.

Didn't Zillow dispel this as a myth? Except in SF (and NYC?), central city housing hasn't decreased that much.

Anecdotally, the newly built houses in my urban neighborhood are selling rapidly.

[YttriumNitrate]

To the extent people are moving due to covid, that's a big response to a temporary problem.

While covid may be temporary, the shift to work from home may not be. The big question is if jobs are no longer tied to a specific city, what percentage of city dwellers will move elsewhere? Following up on NorCal's post, the percentages will probably vary significantly based on demographics.

[Paper Chaser]

The two most common answers for wanting to live in a city are  "There's so much to do there", and "That's where the jobs are".
Covid has stripped both of those things away, and there's a lot of uncertainty about how either one might be in the future if they return at all.

Record economic growth in recent years (increased liquidity), coupled with record low interest rates (increased buying power) has provided enough lubrication to make a lot of people take the plunge.

Didn't Zillow dispel this as a myth? Except in SF (and NYC?), central city housing hasn't decreased that much.

Anecdotally, the newly built houses in my urban neighborhood are selling rapidly.

I don't know, most of the stuff that I've seen indicates the biggest cities are seeing more outbound moves than inbound (although this trend likely existed before Covid):

https://www.businessinsider.com/state-migration-net-gains-coronavirus-pandemic-2020-8

https://www.northamerican.com/migration-map

"  -People are fleeing California for Texas and Idaho
   - Illinois, New York, and New Jersey are the three states with the most outbound moves.
   - The top five inbound states in 2020 are Idaho, Arizona, Tennessee, South Carolina, and North Carolina, with Tennessee       overtaking South Carolina from the 2019 results.
   -Florida, Texas, and Colorado round out the top eight states for inbound moves.
   -Despite pandemic, people continued to move at rates comparable to 2019"

https://www.mymove.com/moving/covid-19/coronavirus-moving-trends/

[Norioch]

Yep, home prices are ridiculously, stupidly, crushingly expensive, and I hate it. I strongly hope that the trend reverses and home prices fall.

[Abe]

Several of those towns on that graph are suburbs of Houston, Dallas and Austin, so they’re basically moving from a dense metropolitan area to a less dense metropolitan area. Not really moving away from cities as much as following jobs from
one city to another.

[FINate]

U-Haul has stats on migration trends. These are DIY moves and are therefore likely more representative of the middle- and lower-class.

Ranked by state, most of the usual suspects are near the top for in migration (TX, FL, AZ, CO). Likewise, there are few surprises in the bottom 10, except maybe OR and LA. And a significant out migration was noted in both the SF Bay Area and NYC.

United Van Lines also released a study for 2020 migration trends. With their more upscale clientele it is likely more representative of the upper class:

Among the top inbound states were South Carolina (64%), Oregon (63%), South Dakota (62%) and Arizona (62%), while New York (67%), Illinois (67%), Connecticut (63%) and California (59%) were among the states experiencing the largest exoduses.

[Paper Chaser]

Several of those towns on that graph are suburbs of Houston, Dallas and Austin, so they’re basically moving from a dense metropolitan area to a less dense metropolitan area. Not really moving away from cities as much as following jobs from
one city to another.

And this fits with the WSJ article at the core of this thread right? People are moving from urban areas to suburban ones. Doesn't matter if they're moving across the country or just outside of their current city. They're ending up in suburbs or rural areas like mountain ski towns more than they're ending up in cities. We can all speculate about people's various motivations for moving (and some of the links I posted have some data about that), but the bottom line is that urban living is seeing more outflow than inflow, while suburbs are seeing growth.
Maybe it's COVID. Maybe it's remote work. Maybe it's a rise in homelessness, drug use and violence in cities. Maybe it's Millenials hitting "growing family" age and wanting more space and a yard for the kids. It's probably all of that.