Urban Single-Family Homes See the Fastest Price Growth

Urban single-family prices have jumped nearly 20% year-over-year to $286,000, which is faster than any other type of home and the biggest increase of record for those homes, according to a new report from Redfin.

In another sign that people are returning to the city, condos sales are up 30% year over year, which is more than any other home type.

Still, regardless of neighborhood, single-family homes are selling faster than condos. For instance, suburban single-family homes spent 25 days on the market before going under contract during the 12 weeks ending April 4. Urban single-family homes are spending a median of 29 days on the market before going under contract.

While the popularity of urban single-family homes indicates that people still prize space and self-contained homes without shared walls, urban condos sales were up nearly 30% year over year during the 12 weeks ending April 4. That represents a bigger increase than any other home category and provides notice that the condo market is clearly in recovery after plummeting last summer. Coming in second were suburban condos, which saw sales rise 22.8% year over year.

“Many homebuyers are still prioritizing features that were desirable at the beginning of the pandemic, like space for a home office or a big backyard, partly because many people plan to continue working from home,” said Redfin economist Taylor Marr in a prepared statement. “But as people venture out of their homes more often, they’re rediscovering the advantages of living in a city.”

Before people buy, they’re searching for homes. Online listings of homes in large cities experienced a 62% year-over-year increase in page views, which was bigger than the 30% gain for small towns and the 18% increase for rural areas. Redfin does note that the large year-over-year jump in pageviews for large metros is likely exaggerated because March marks one year since the pandemic hit the US.

“The fact that homebuyer interest in large metros is accelerating while it’s decelerating in rural areas and small towns suggests the pandemic-driven bump in demand for rural properties has peaked and buyers are returning to the city,” according to Redfin.

While the home sales market is so hot that some people are comparing the frenzy to the mid-2000s, more inventory could be on the way to ease some of the pressure.

A recent study from realtor.com and HarrisX found that help is on the way for both trade-up and first-time buyers. Ten percent of homeowners in the US plan to sell within the next 12 months, which is 25% more than the share of homes that come to market in a typical year, according to realtor.com. In addition, 16% of homeowners are likely to list their homes in the next two to three years.