As more businesses reopened and some pandemic measures eased, home buyers began returning to the cities, bringing home prices soaring with them.
For the four weeks ending February 21, the median sales price for urban homes rose 15.9% annually, compared with 15.5% in the suburbs and 14.3% in rural areas, according to a report by Redfin. It is the first time since March 2020 that cities led home price growth by market type when the country entered a pandemic lockdown and buyers fled in search of more space and more land.
"With all talk of an urban exodus, the housing market in cities is hotter than ever, especially for single-family homes," Redfin chief economist Daryl Fairweather said in the report. “There are many deep pocket buyers who are ahead financially during the pandemic. They want a house with plenty of space while still working from home, but they also want a walkable area close to city amenities live as shops and restaurants reopen. "
Relatively affordable metropolitan areas saw the greatest annual growth in median sales prices. Baltimore was up 37.8% year-over-year, just below the 37.7% of Detroit and 33.4% of Cleveland. San Francisco had the lowest urban growth rate of -1.4%, followed by New York with 2.2% and Washington with 5.5%.
Overall, urban home sales rose 4.7% annually, while suburban and rural sales rose 3.6% each. Supply continues to be an issue across all market types as urban real estate for sale declined 21% year-over-year, suburbs decreased 42.9% and rural areas decreased 46.6%.
Due to low inventory levels, the listings are selling closer to their asking prices than ever before, according to a separate Redfin report. Average value for money reached an all-time high of 99.6% monthly in the four weeks ending February 28, up 98% year over year. Broken down to the last week of February after all the extreme winter weather, the rate was 99.9%.