Over the past few months, urbanites have been faced with a much different reality than those living in more rural and smaller communities. Higher sickness levels, difficulties accessing basic necessities, and limited space have pushed many city residents to explore real estate purchases outside urban settings.
A report from Redfin (NASDAQ: RDFN) highlights this trend, showing that by late March, the seven-day average change in page views of homes in rural and small towns was up 115% and 88%, respectively. Further, the decline in pending sales was less dramatic in small towns than in urban ones.
According to Redfin Lead Economist Taylor Marr, the ongoing pandemic "has shined a bright light on one of the historic downsides of density -- the possibility for spread of disease. It will remain to be seen if this shift in demand away from urban metros lasts or is temporary."
In Redfin's 2020 first-quarter earnings call, Redfin CEO Glenn Kelman said, "We're also preparing for a seismic demographic shift toward smaller cities. Prior to this pandemic, the housing affordability crisis was already driving people from large cities to small. Now more permissive policies around remote work and a rising wariness about close quarters will likely accelerate that trend."
Kelman continued, "Since March 15, searches for homes and towns with population under 50,000 people increased 71%." He added that "more people will leave San Francisco, New York, and even Seattle, some for nearby towns like Sacramento and Tacoma that are close enough to support a weekly office visit, others for a completely remote life in Charleston, Boise, Bozeman, or Madison."
A recent Harris Poll found that more than 3 in 10 people in America say the pandemic makes them want to live in a rural area. And, 1 in 4 now want to live in a suburb exterior to a major city. In a separate Harris Poll, it was found that nearly 40% of city dwellers are considering leaving the city due to the pandemic.
Tim Ellis, senior data journalist at Redfin, is quoted as saying, "Based on what we're seeing in the data so far, it looks like the housing market in rural areas and small towns will weather the storm through coronavirus shutdowns better than the big cities. We may also see an increase in home sales in these less densely populated areas in the long term as well, as homebuyers look to get away from the cities or just purchase a second home that they can retreat to when times in the city get rough."
As companies continue to loosen their work-from-home policies, including Twitter (NYSE: TWTR), which just announced that all employees can work from home indefinitely, expect interest in rural and small-town real estate to increase.