Urban Real Estate: Why Now is the Best Time to Buy a House in the City
by Becca Stewart - May 13th, 2022
If you’ve ever dreamed of moving to the city, with easy access to restaurants, nightlife, and all the hustle and bustle that urban living offers, now might be your best chance. During the pandemic, the so-called “urban flight” reduced demand for urban properties. As a result, prices are cooling in city centers, allowing military home buyers to make their city living dreams a reality.
This year might be your best chance to buy urban real estate. Read on to learn more about what caused the exodus out of the city and how you can benefit.
Suburban vs. urban living: the post-pandemic urban flight
The pandemic drastically changed the way we work, live, and play. As a result, people started moving away from the cities and toward the suburbs. Several factors contributed to this so-called “urban flight:”
People began working from home. Those who lived near the office could now move farther away without worrying about a long commute. Workers also needed more space to work, leading them to the suburbs where they could purchase houses with a home office.
The pandemic shut down many entertainment options, including shopping, dining, theaters, and other activities. More Americans stayed at home, trying to find ways to keep themselves entertained. Suddenly, small urban housing felt confining, especially with kids home from school and adults working from home. Suburban housing gave families room to spread out.
Health concerns in multifamily settings. As the virus spread, urban, multifamily housing presented several health concerns. Many apartment and condo complexes lacked proper HVAC systems to prevent the virus from spreading. Common areas like lobbies and elevators made it impossible to remain socially distant. And the sheer population in these settings made community transmission more likely than in suburban areas with single-family homes.
Of course, the urban exodus started before the pandemic. Rents have been increasing in major cities across the country for years. Residents simply couldn’t afford to stay, causing them to pack up and move to the suburbs.
What urban real estate looks like in 2022
Urban real estate is more affordable than it has been in years, thanks to the simple concept of supply and demand. As families moved out of the cities and into the suburbs, the demand for urban real estate waned. As a result, housing within urban areas has become more affordable for the average home buyer.
To be clear, urban real estate is not immune from the inventory shortages and rising prices prevalent throughout the U.S. It’s just that housing shortages are worse in suburban areas. Urban real estate supply is about 8% lower than it needs to be to meet demand. But suburban supply is 14.4% lower than it should be.
Urban buyers still face challenges, but it’s slightly easier to buy urban real estate than suburban real estate in the current market.
Why now is a good time to buy real estate in the city
Urban flight has slowed significantly, with fewer city-dwellers leaving for suburban and rural areas. And while some people are returning to the cities, urban populations remain lower, and urban real estate remains less competitive.
Online home search data shows that buyers search in suburban areas about twice as often as they search for properties in the city. This desire for suburban homes, combined with an already low inventory, makes for an ultra-competitive suburban buying market. Suburban homes are under contract within hours of being listed, often with multiple offers over asking price.
On the other hand, inventory shortages are slightly better in urban areas. This gives buyers a better chance of getting an offer accepted on a property in the city than in suburban areas. And with less demand for urban real estate, prices are more reasonable – and rising at a slower pace – than in suburban areas.
As an added bonus, many military service members saw an increase in their BAH, or basic allowance for housing. That means there is more money in your pocket every month, giving you more opportunity to afford urban real estate.
Want to know your 2022 BAH rate at your next duty station? Click here to access the 2022 BAH calculator.
Military families moving to the city
Military families are having a tough time buying real estate right now. The competitive real estate market in suburban areas across the U.S. makes the already-stressful PCS process even more aggravating.
Moving to the city might be the answer.
City living offers many benefits:
Low-maintenance living in multifamily properties, like condos and townhomes
Easy access to entertainment, nightlife, shopping, and culture
Public transportation, keeping car ownership and maintenance costs low
More job opportunities for military spouses
More social interactions and chances to make great friends
If you’re ready to buy, urban real estate could be a viable option.
How to buy urban real estate
If you’ve always dreamed of living in the center of the action, now might be your best chance. Whether you’re PCSing to a new city or just want to buy real estate in your current location, the first step is to find an experienced real estate agent.
PCSgrades has partnered with real estate agents all across the country, helping military families connect with top-notch professionals who can make your home buying experience a breeze. Click here to find real estate agents (and as a bonus, going through PCSgrades can get you $350 to $7,500 cash back!).
PCSgrades and Realogy Military Rewards
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