COVID-19 Speeding Up US Population Shift to the Suburbs
The coronavirus might be here to stay, but that doesn’t mean that people are committed to riding it out in their big-city residences.
A staggering one-third of Americans – some 109 million people – are at least considering a move to a place with a less dense population after the last 10 weeks of the COVID-19 outbreak in the United States.
Population Density a Telling Sign
New York (7th) and New Jersey (1st) both rank in the top 10 in population density among US states. As of May 25, those two also led the country in COVID-19 deaths with New York at 23,282 and New Jersey at 11,081.
Counterbalance that to a state like Texas, which has a total population (29 million) larger than New York and New Jersey combined (28.4 million), but has had only 1,506 fatalities from COVID-19. By comparison, Texas ranks 26th in population density.
In response to this trend, builders across the country are looking to rewrite the playbook on their approach to matching people to homes. American Homes 4 Rent is teaming up with JP Morgan Asset Management is looking to build some 2,500 single-family rental homes across high-growth markets in the American West and Southeast regions, investing $625 million of equity in the process. The first link in that chain is coming just outside Las Vegas.. Thirty-four new homes will spring up in Sovana and Spring Valley. Sovana is a Vegas neighborhood of about 6,000 people; Spring Valley is an unincorporated town of about 175,000 two miles west of Vegas.
The target audience for these homes are millennials seeking to escape apartment living in big cities, with the pandemic giving them the kick in the pants to get the process rolling. The Nevada homes are all trending on the larger side; 22 of them have four bedrooms, the other 12 will have three; the perfect size homes for those 22-to-38 year-olds who are getting married and starting families.
By making rental homes available, the company gives these younger home owners the chance to try a new locale without getting locked in to a long-term mortgage. It’s a chance to “escape” the coronavirus hot spots for a short time with the opportunity to extend it if they wish.
Grass, Space, and Convenience Top Want List
Real estate agents around the country say they are fielding more and more phone calls from perspective buyers and renters who are listing “grass, outdoor space, and convenience to essentials like groceries” as their new top priorities in what they’re looking for in a home.
East Coast residents who go after summer rentals in places like Greenwich, Connnecticut, are now looking at making those vacation properties into their full-time residences.
Not only are millennials wanting to move away from the cities because of the COVID-19 threat, but also because the global stay-at-home order has opened their eyes to their own ‘mobility ability.’
When the New York stockbroker is able to carry out his 9-to-5 duties from his home office just as efficiently as he does from the 75th floor of the Empire State Building, it calls into sharp contrast that living close enough to the office for a short daily commute is no longer mandatory.
The paradigm shift during the pandemic has allowed millions the flexibility to work from home. While certainly not every job will remain a remote option once the US opens back up to full capacity, there’s no denying it will remain an option for many, many employees across all industries. If you can handle the same workload from your home office in a town of 30,000 with little threat of the coronavirus, why would you continue living in the city of 3 million where the threat is high and the cost of living even higher?
The trends of the past years and decades are going out the window as life with COVID-19 becomes the new normal. Home builders and real estate agents no longer have a clear picture of what future trends are and must adapt to the rapidly-changing pace of catering to specific client needs to keep pace. It is our belief that while COVID-19 might have sped up the process, the ability to work remotely and a desire to leave the most densely populated areas will continue this accelerated growth in demand for single-family rentals among millennials.