Covid-19 isn’t causing people to leave big cities — at least not yet

A commentary by Zillow chief economist Svenja Gudell originally published on CNN Business Perspectives

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professional portrait of Svenja Gudell, Zillow senior economist

“Already, millions of millennials are into their early 30s, marrying, starting families and — like the generations before them — moving to the suburbs. And there are millions more behind them. This urban-to-suburban pull was not caused by the pandemic, and it won’t be stopped because of it.” -Svenja Gudell, Zillow Chief Economist

Those living in America’s biggest cities, where apartment-living and dense urban environments have made weathering the coronavirus pandemic more daunting, may be questioning whether they should hunker down or flee to bigger, more open spaces. But so far, while anecdotal stories abound of people leaving the nation’s biggest cities, there’s no data yet that shows it’s a widespread phenomenon.

People are still searching for homes, but traffic on Zillow does not show more urbanites suddenly looking to move into suburban or rural areas. Nor are waves of home shoppers seeking to flee large cities for smaller ones. What’s more, while current and prospective buyers in urban areas are most likely to say the coronavirus pandemic has affected where they want to live, 70% of the nearly 10,700 US adults we surveyed in April say they want to live in an area that is equally or even more urban than the neighborhood where they currently live.

Of course, it’s still early. Longer term, shifts are more likely, however, and a lot will depend on how businesses ultimately respond. In a recent Zillow survey, three-quarters of Americans suddenly working from home due to COVID-19 said they would prefer to remain at home a majority of the time if given the option, even after their workplaces reopen. And two-thirds of those said they would ultimately consider moving if they had the flexibility to work from home as often as they want. Coronavirus is making some people rethink where they want to live

But it’s not their location they might want to change — it’s their actual home. Many would want designated office space and more room inside and out. Home buyers on a budget almost always make tradeoffs, like living farther from transit or family to be within a preferred school district. It makes sense then that many who gave up square footage or a fenced yard for a shorter commute might reconsider if work-from-home policies shift in the future.

Larger homes and lots are typically found — and are less expensive —outside of central cities, so many people looking to trade up will look in the suburbs and beyond if they don’t have a commute to consider. Already, millions of millennials are into their early 30s, marrying, starting families and — like the generations before them — moving to the suburbs. And there are millions more behind them. This urban-to-suburban pull was not caused by the pandemic, and it won’t be stopped because of it.

Originally published on CNN Business Perspectives