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When it comes to the 10 largest real-estate markets in the country, the Washington region is part of a slight majority where home values in any given region’s more suburban areas outpaced those in its urban cores in 2020.
New data from Zillow suggest that, in the Washington region, closer-in areas saw an annual appreciation rate of 6.7 percent in the topsy-turvy year gone by, while the further-out suburbs in the metro area appreciated at a rate of 7.9 percent.
That was the case in six of the 10 largest metro areas in the U.S., although it was not the case nationwide. According to Zillow’s take, urban-core home values appreciated by 8.8 percent nationally, slightly ahead of the 8.7-percent rate recorded in the suburbs.
But in higher-priced urban areas, the balance is tipped slightly toward suburban price growth outpacing urban growth.
Among the 10 largest housing metro areas in the country, that’s true in Atlanta, Boston, Houston, Washington, Miami and, more than any other, New York City. In the Big Apple, 2020 housing appreciation was up 3.3 percent urban parts but up 8.8 percent in suburban parts.
“More often than not, buyers are flocking to homes in affordable areas, said Zillow economist Alexandra Lee (although “affordable” is a term that varies by individual).
However, in four of the top 10 housing markets – Los Angeles, Chicago, Dallas and Philadelphia – price growth in urban areas outpaced growth in suburban areas. The differential was largely inconsequential in Los Angeles (9.5 percent vs. 9.4 percent) but more pronounced in the three other metro areas.
At the national level, buying in the suburbs became more competitive in the fall, trending slightly hotter than urban areas in some measures, including shorter time on market and a higher share of homes selling above list price.
But as with all things real estate, local conditions are paramount.
Take, for example, the Midwest, where the typical home value is less than other regions in the U.S., has seen urban home-value growth accelerate ahead of the suburbs in recent months.
In metros such as St. Louis, Cincinnati, Cleveland, Kansas City, Columbus and Indianapolis, urban home values have been growing faster than those in the suburbs for at least the past several months.