While April was punctuated by a sharp dip in homebuyer activity in the wake of COVID-19, May data now shows some hints of market recovery, especially in suburban and rural areas. With that recovery, homebuyers are exploring their options beyond the most populated urban centers.
Housing market interest has returned to the suburbs with property views stronger than pre-COVID levels. While this rising demand has yet to materialize into home sales or a faster pace of sales, this potentially signals that more buyers are ready to re-enter the market.
Realtor.com’s Market Hotness rankings take into account two aspects of the housing market: 1) market demand, as measured by page views per property on realtor.com, and 2) the pace of the market as measured by the number of days a listing remains active on realtor.com.
Major housing markets saw listing views per property improve in May compared to a steep dip in April, but not all neighborhoods recovered in the same way. In the 100 largest metros, rural and suburban zip codes saw the largest gains in views per property in May, up an average of 16 and 13 percent, respectively. Views per property in urban areas were up 7 percent on average.
Rural and suburban areas showing a higher views per property trend than urban areas is not necessarily a new pattern. For the past several years, it’s been common to see suburban areas outpace urban areas in views per property growth. However, May marks the largest gap in this discrepancy since we started tracking the metric in 2016, aside from one month in September 2018.
The pace of the market, as measured by days on market, has slowed nationally across all levels of urbanicity. However, May data shows that rural and suburban zip codes have been more resilient to this slowdown compared to urban areas. Time on market in rural and suburban areas has slowed, increasing by 25 and 30 percent, respectively, while urban zip codes have slowed even more, increasing time on market by 35 percent. Based on the available data going back to 2016, this month represents the widest gap in days on market trends among urbanicity categories.
Suburban and Rural Markets Spike in Rankings
With suburban and rural markets seeing relatively stronger trends in both views per property and days on market, Hotness rankings of these areas spiked in May, outpacing urban markets dramatically. Out of nearly 20,000 zip codes tracked for realtor.com’s Hottest Market rankings, rural zip codes saw a median jump of 846 spots in May, while suburban zip codes saw a median improvement of 404 spots, both historic highs since we started tracking Hotness in 2016. Urban zip codes saw a median improvement of 87 spots.
The Columbia, SC metro area leads the pack, having the fastest-rising suburbs with a median gain of 3,459 spots for its suburban zip codes in May. Half of Columbia’s suburban zip codes saw at least 42 percent growth in views per property compared to last year. Moreover, Columbia’s suburbs were also among the few markets that saw its pace of sales continue quickening while the rest of the country’s pace slowed.
Seven out of these ten fastest rising suburban markets are in the south. Since this region of the United States hasn’t been particularly noteworthy in terms of popularity, these rising rankings could reflect a lower prevalence of COVID-19 activity in southern states in May. This trend may also indicate a willingness of buyers in these markets to continue being active even during the pandemic.