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Long-Standing Suburbanization Trend is Likely to Continue – An East Coast Update 

Admir Kolaj, Economist | 416-944-6318

Date Published: October 28, 2021

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Highlights

  • The pandemic provided an added fillip to the long-standing suburbanization trend last year, as Americans (many of whom transitioned to working remotely) set their sights on the suburbs in search of more living space. Large metro areas along the East Coast mirrored this trend, with suburban population growth further widening its outperformance gap vis-à-vis urban cores across most metros. 
  • Last year's population estimates pertain to July 1st 2020, capturing only the first leg of the pandemic. A lot has happened since then. Signals from housing and labor market data suggest that, more recently, the underperformance of urban cores has abated to some degree, alongside improving public health conditions and the ongoing economic recovery. This trend has more room to run as the pandemic moves further into the rearview mirror. But instead of an urban revival, the theme here is likely to be one of gaining back some of the lost luster vis-à-vis suburbs.  
  • Despite expectations for bruised urban cores, such as those of Boston and New York, to claw back some lost ground, it appears that the suburban population growth advantage is likely to continue over the medium term as several factors continue to weigh in favor of suburbs. These include demographic tailwinds (i.e., the fact that millennials are increasingly entering the family-forming stage and their homebuying years with preferences tilted toward single-family homes and the suburbs) and the lingering popularity of remote work post-pandemic. The fact that homebuilders have generally been placing a greater focus on suburbs should be yet an added supportive element. 
Chart 1 shows population growth for primary cities and suburbs across the United States. The chart shows that between 2010 and 2015 primary cities were growing at a slightly faster clip than suburbs, at a little over 1% on average. Since then, population growth has slowed in both, but suburban population growth has outpaced that of primary cities. The gap in growth widened further in 2020 as primary city population growth decelerated faster than suburban population growth.

The world economy may have come to a screeching halt as the pandemic took hold last year, but that didn’t stop Americans from moving – whether to a different part of the country or nearby. If anything, the health crisis and the accompanying economic hardships were added reasons for some to relocate. In this vein, a Pew Research survey notes that earlier into the pandemic, risks of contracting COVID-19 were cited as a dominant factor for those moving out of dense urban areas, where perceived risks of contracting the disease may have been higher. But, through the tail end of 2020, as the crisis dragged on, financial distress became a more likely reason for moving.1

Warmer sunbelt markets remained a popular destination for those relocating out of state. That said, the vast majority of people that moved stayed in the same metro area.2  The move to the suburbs in search of more living space and perhaps a home office, was quite popular. This gave the long-standing suburbanization trend another shot in the arm last year. 

Large East Coast metros areas were not immune to these trends. Suburban population growth continued to outpace urban population growth in all but one of the large thirteen East Coast metros examined in this report. More importantly, the outperformance gap between suburban and urban population growth widened last year across most metros. 

Yearly Census Bureau population estimates are for a specific point in time (i.e., rather than an average for year). Last year's estimate pertains to July 1st, 2020, capturing only the first stage of the pandemic. The key question now is what has happened since then and what is likely to happen from here on out. Several related indicators in the labor market and housing realm suggest that the urban exodus for some of the most impacted Northeast metros has since abated thanks to an improving public health backdrop. While this trend may have more room to run, as the dust settles on the pandemic disruption, suburbs across large East Coast metros are likely to continue maintaining an edge over urban cores in terms of population growth, helped along by demographic tailwinds and the lingering popularity of remote work.

East Coast metros continue to mirror national suburbanization trend

Chart 2 shows population growth for highly urbanized areas and suburbs across thirteen of the largest East Coast metro areas combined. The chart shows that after a brief hiatus during the Great Recession, the long-standing suburbanization trend made a comeback across the largest East Coast metros; that is suburban population growth has continued to outpace urban population growth over the last several years. Similar to the national narrative, the gap in growth widened further during 2020 as suburban population growth held mostly steady while urban population growth decelerated further and fell into negative territory.

The population shift from highly urbanized areas to less-denser suburban areas has been ongoing for many decades in the United States. After a brief hiatus during the Great Recession, the trend has made a comeback over the past several years. An examination of last year's data confirms that the shift to the suburbs accelerated during the first leg of the pandemic. Indeed, while population growth slowed in 2020, both for primary cities and suburbs, a Brookings Institution report shows that the slowdown was much more pronounced for primary cities, with the suburban growth advantage increasing as a result (Chart 1). 

In a similar analysis that we did in 2018, where we examined urban/suburban population patterns across the largest East Coast metro areas, revealed that the region exhibited similar trends to the nation.3 Refreshing the numbers with more recent data, reveals not only an extension of the suburbanization trend in the first leg of the pandemic, but also an intensification of it across most of the thirteen metros examined in this report. Combined population growth across the East Coast's largest urban cores dipped into shallow negative territory last year. Suburban population growth, meanwhile, remained largely unperturbed at around 1%, thereby increasing its edge over urban cores (Chart 2). 

Southeast metros continue to hold a clear edge over Northeast metros 

The urban/suburban population growth rates exhibited in Chart 2 are skewed downward by the weightier and slower-growing Northeast metros. Two metropolitan statistical areas stand out in particular: New York and Boston. Population growth in the New York metro's urban core – once the pandemic's epicenter in the U.S. – dipped further into negative territory last year (-0.6%). Meanwhile, Boston's highly urbanized core shrank for the first time in over a decade. An outflow of residents to nearby suburbs in search of more space and to warmer southern states, along with the lack of more typical immigration inflows, are all factors that likely contributed to these declines. By comparison, population growth in the southern metros, many of which continued to benefit from an inflow of residents from other parts of the country, generally held up much better.

 

Table 1: Population Growth in Largest East Coast Metropolitan Areas*

Source: *Miami is excluded. Source: BEA, TD Economics.
Metro Area 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Boston-Cambridge-Newton, MA-NH Urban -0.4 -0.3 0.1 0.5 0.9 1.1 1.0 1.1 1.2 1.1 1.0 0.7 0.7 0.7 0.3 0.2 -0.1
Suburban 0.3 0.5 0.5 0.4 0.4 0.3 0.4 0.5 0.4 0.5 0.8 0.5 0.7 0.8 0.5 0.5 0.5
Difference -0.7 -0.8 -0.4 0.1 0.5 0.8 0.6 0.6 0.7 0.6 0.2 0.2 0.0 -0.1 -0.1 -0.3 -0.5
Providence-Warwick, RI-MA Urban 0.4 -0.6 -0.6 -0.4 -0.2 -0.3 0.2 0.2 0.3 0.1 0.1 0.2 0.1 -0.1 0.4 -0.1 -0.1
Suburban 0.0 -0.4 -0.2 -0.3 0.0 0.2 0.1 -0.1 0.1 0.2 0.3 0.1 0.1 0.3 0.4 0.0 0.1
Difference 0.4 -0.2 -0.4 -0.1 -0.3 -0.5 0.1 0.3 0.2 -0.1 -0.1 0.1 0.0 -0.4 0.0 0.0 -0.2
New York-Newark-Jersey City, NY-NJ-PA Urban 0.0 -0.2 -0.2 0.2 0.6 0.7 0.7 0.7 0.6 0.4 0.3 0.2 0.1 -0.1 -0.2 -0.3 -0.6
Suburban 0.2 0.1 -0.1 0.2 0.4 0.5 0.4 0.3 0.1 0.1 0.1 0.1 0.0 0.2 0.0 -0.1 -0.2
Difference -0.3 -0.4 -0.1 0.0 0.2 0.2 0.3 0.4 0.5 0.3 0.2 0.2 0.1 -0.4 -0.2 -0.2 -0.4
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD Urban 0.2 0.2 0.2 0.3 0.4 0.7 0.5 0.5 0.5 0.3 0.3 0.2 0.2 0.2 0.3 0.1 0.0
Suburban 1.2 0.9 1.0 0.6 0.5 0.4 0.4 0.3 0.1 0.0 0.3 0.0 0.0 0.1 0.2 0.2 0.2
Difference -1.0 -0.7 -0.9 -0.3 -0.1 0.2 0.1 0.2 0.4 0.3 0.0 0.2 0.2 0.1 0.1 -0.1 -0.2
Pittsburgh, PA Urban -0.9 -1.0 -0.7 -0.3 -0.1 0.1 0.1 0.4 0.2 0.2 0.0 -0.3 -0.2 -0.5 -0.2 -0.1 -0.4
Suburban -0.1 -0.2 -0.1 -0.1 -0.1 -0.2 0.0 -0.1 -0.2 -0.3 -0.3 -0.4 -0.4 -0.4 -0.3 -0.4 -0.4
Difference -0.8 -0.9 -0.6 -0.1 -0.1 0.3 0.2 0.4 0.4 0.5 0.2 0.0 0.2 -0.1 0.1 0.2 0.0
Baltimore-Columbia-Towson, MD Urban -0.8 -0.4 -0.1 -0.1 0.0 0.1 0.1 -0.1 0.4 -0.1 0.2 -0.2 -1.0 -0.9 -1.2 -1.4 -1.4
Suburban 1.1 0.8 0.7 0.5 0.6 0.8 0.9 0.9 0.9 0.7 0.5 0.5 0.5 0.5 0.5 0.4 0.2
Difference -1.8 -1.2 -0.8 -0.6 -0.6 -0.7 -0.9 -1.0 -0.5 -0.7 -0.3 -0.7 -1.5 -1.4 -1.7 -1.9 -1.6
Washington-Arlington-Alexandria, DC-VA-MD-WV Urban 0.8 0.8 0.4 0.7 1.2 2.0 2.1 1.9 1.7 1.4 1.0 1.0 0.7 0.8 0.3 0.3 0.2
Suburban 3.8 3.5 2.6 2.1 1.8 1.5 2.0 1.8 1.5 1.7 1.8 1.3 1.6 1.8 1.6 1.7 1.3
Difference -3.0 -2.7 -2.2 -1.5 -0.5 0.5 0.1 0.1 0.2 -0.4 -0.9 -0.3 -0.8 -1.0 -1.3 -1.3 -1.2
Virginia Beach-Norfolk-Newport News, VA-NC Urban 1.1 -0.4 0.6 -0.7 -0.5 0.1 0.4 0.3 0.6 0.3 0.2 0.0 -0.2 -0.3 -0.2 0.0 0.0
Suburban 2.7 2.2 1.9 1.1 0.9 0.9 1.2 0.5 0.7 0.7 1.2 0.9 0.9 1.0 0.9 1.0 0.9
Difference -1.6 -2.6 -1.4 -1.8 -1.4 -0.8 -0.7 -0.2 -0.1 -0.4 -1.0 -0.9 -1.1 -1.3 -1.0 -1.0 -0.9
Charlotte-Concord-Gastonia, NC-SC Urban 2.5 3.3 4.1 3.7 3.0 2.3 1.6 2.2 2.5 2.5 2.0 2.3 2.3 2.0 1.5 1.6 1.4
Suburban 1.8 2.5 3.6 3.8 3.2 1.8 1.0 0.8 1.1 1.2 1.6 1.8 2.0 2.0 1.8 1.8 1.9
Difference 0.7 0.8 0.5 -0.2 -0.2 0.5 0.6 1.4 1.4 1.2 0.3 0.5 0.3 0.0 -0.3 -0.2 -0.5
Atlanta-Sandy Springs-Roswell, GA Urban 0.9 1.4 2.6 2.0 1.6 1.2 1.1 1.5 1.9 1.2 1.4 1.6 1.7 1.2 0.9 0.9 0.6
Suburban 3.9 4.3 4.8 4.1 2.9 1.6 1.2 0.7 0.7 1.3 1.7 1.7 2.0 2.0 1.9 1.9 1.8
Difference -3.0 -2.9 -2.2 -2.1 -1.3 -0.4 -0.1 0.9 1.3 -0.2 -0.3 -0.1 -0.2 -0.8 -1.0 -1.0 -1.2
Jacksonville, FL Urban 1.3 1.1 1.6 1.1 0.5 0.5 0.7 0.8 0.9 0.7 1.2 1.6 1.7 1.3 1.2 1.0 0.7
Suburban 5.1 4.3 4.8 3.5 2.5 1.7 1.7 1.3 1.6 2.0 2.4 2.8 3.0 3.1 2.9 3.0 3.2
Difference -3.8 -3.2 -3.2 -2.5 -2.0 -1.2 -1.0 -0.5 -0.7 -1.3 -1.2 -1.2 -1.3 -1.8 -1.7 -2.0 -2.5
Orlando-Kissimmee-Sanford, FL Urban 2.9 3.8 2.5 1.2 1.2 1.2 1.3 1.6 2.3 1.8 2.1 2.5 2.5 2.1 1.7 0.8 0.6
Suburban 6.1 5.2 5.6 3.9 2.2 1.0 1.2 2.1 2.3 2.5 3.2 3.6 3.7 3.8 3.6 2.3 2.7
Difference -3.2 -1.4 -3.1 -2.7 -1.0 0.3 0.1 -0.4 -0.1 -0.6 -1.0 -1.1 -1.2 -1.8 -1.9 -1.5 -2.0
Tampa-St. Petersburg-Clearwater, FL Urban 1.6 1.8 1.1 0.3 0.5 0.8 1.0 1.1 1.3 1.4 1.6 1.9 2.0 1.7 1.3 1.0 0.9
Suburban 4.8 5.0 4.3 3.2 1.6 0.1 0.6 0.1 0.5 0.9 1.7 2.1 2.9 2.8 2.5 2.5 2.8
Difference -3.2 -3.3 -3.2 -2.9 -1.2 0.6 0.3 1.0 0.8 0.5 0.0 -0.3 -0.9 -1.1 -1.2 -1.6 -1.9
Total (13 metros) Urban 0.4 0.4 0.5 0.5 0.7 0.9 0.9 1.0 1.0 0.8 0.7 0.7 0.6 0.5 0.3 0.2 -0.1
Suburban 1.6 1.5 1.6 1.4 1.1 0.8 0.8 0.6 0.6 0.7 0.9 0.8 0.9 1.0 1.0 0.9 0.8
Difference -1.3 -1.2 -1.1 -0.9 -0.4 0.2 0.2 0.4 0.4 0.1 -0.2 -0.1 -0.3 -0.6 -0.7 -0.7 -0.9

Grouping the Northeast metros from Boston to as far south as Pittsburgh and those further down the coast (Baltimore to Tampa) within the South Atlantic group, helps crystalize a clearer narrative. When it comes to highly urbanized areas, population growth slowed down in both, but while it dipped into negative territory in the typically slower-growing northern group, it held up much better in the southern group (Chart 3). On the other hand, suburban population growth saw little change in both last year, with the northern group recording no growth and the southern group continuing to grow at a healthy 1.6% (Chart 4). For a more detailed urban/suburban breakdown by specific metro area, see Table 1. 

Chart 3 shows urban population growth for two groups of metros along the East Coast: The Northeast group (Boston to Pittsburgh) and the South Atlantic group (Baltimore to Tampa). The chart shows that urban population growth in the Northeast group fell further into negative territory last year. Urban population growth in the South Atlantic group also slowed but remained well in positive territory. Chart 4 shows suburban population growth for two groups of metros along the East Coast: The Northeast group (Boston to Pittsburgh) and the South Atlantic group (Baltimore to Tampa). The chart shows that suburban population growth held mostly steady in both, but there was a large gap between the two groups. Suburban population growth for the Northeast group held mostly steady around 0%, while the South Atlantic group held mostly steady around the 1.6% mark.

 

Urban decline in most Impacted Northeast metros has likely abated 

As mentioned earlier, 2020 population data pertain to July of last year, capturing only the first leg of the pandemic. A lot has happened in the fifteen months since then. Suburban population growth has likely continued to outpace urban population growth over the past year, helped along by the protracted health crisis and the increased comfort of workers and firms with remote work. That said, a look at data that tend to be aligned with population trends, such as housing and labor market data, suggests that the underperformance of urban cores has more recently abated to some degree, alongside the ongoing economic recovery. For instance, the strong absorption of apartment units across the region in recent quarters is a very positive signal. With apartments being snapped up at a fast clip, after a period of significant weakness in 2020, multifamily vacancy rates have declined and are now below their pre-pandemic level across all thirteen metros (Table 2). Tighter market conditions, meanwhile, have led to an acceleration in rent growth, which is running at a particularly fast (double-digit) clip across most South Atlantic metros. While these positive trends extend to the broader metro, multifamily units tend to be found in greater concentration in urban cores rather than the suburbs, pointing to a solid pickup in urban core population flows. The return of strong home price growth in counties that were inside the eye of the storm, such as Suffolk County in the Boston metro and Manhattan in New York, which recorded among the sharpest declines in population in their respective metros last year at, is an added positive signal (Chart 5). 4

Table 2: Absorption of Multifamily Units Heats Up

Source: *12 month rolling sum. *"Metro division. Source: CoStar, TD Economics.
Apt. Unit Absorption by Metro              Index* (Q4-2019 = 100) Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21
Northeast Boston - MA 100 97 59 44 60 84 167 198
Providence - RI 100 81 89 117 168 199 173 169
New York - NY *" 100 71 17 0 9 50 129 187
Philadelphia - PA 100 100 87 101 124 148 195 221
Pittsburgh - PA 100 81 38 16 21 42 110 174
South Atlantic Baltimore - MD 100 99 101 147 177 197 214 180
Washington - DC 100 93 59 30 27 53 122 181
Norfolk - VA 100 89 131 201 245 269 238 171
Charlotte - NC 100 98 86 98 105 120 154 175
Atlanta - GA 100 100 102 152 188 234 281 252
Jacksonville - FL 100 106 119 162 174 216 246 204
Orlando - FL 100 94 63 77 95 155 269 310
Tampa - FL 100 94 90 103 130 163 209 223
East Coast (13-metro total) 100 91 66 71 87 120 180 205
United States 100 94 82 98 115 149 204 222
 

Labor market data also offer some support to this narrative. While employment in urban cores was hit harder at the onset of the pandemic – generally the opposite of what was observed during the Great Recession – these markets have been making up growth relative to their suburban counterparts in recent months. To be clear, suburban unemployment rates are still lower relative to those in urban regions across most metros, but that gap has been shrinking on a fairly consistent basis across the East, including in larger metros of Boston and New York (Chart 6).5  Signals from unemployment rate differentials may be more convoluted than those of the housing market, given the many ingredients that make up the unemployment rate  (i.e. the willingness of workers to head back to the labor force, the availability of jobs etc.). In some cases, however, such as in New York, this narrative is also supported by a stronger relative showing of the urban core's labor force (Chart 7). Speaking of the Big Apple, alternative data tracking population shifts more directly also support the narrative that its urban exodus has abated (see Chart A in the appendix).  

A continuation of the economic recovery and the return to normalcy alongside rising vaccination rates, should continue to lend a hand to badly bruised urban cores. But instead of an urban revival, the theme here is likely to be one of gaining back some of the lost luster vis-à-vis suburbs. A resumption of large-scale return-to-office plans, which were put on hold during the Delta-driven infection wave, should provide an added bump in the weeks and months ahead. At the same time, some of those that are required to work from the office at an increased capacity (i.e., more days per week than during the pandemic) will likely gravitate back toward urban cores to avoid long commutes. 

Chart 5 shows month-to-month annualized home price growth for the New York City metro and New York City County (i.e., Manhattan), from July 2019 to August 2021. The data is smoothed through a 3-month moving average. The chart shows that home price growth in Manhattan dipped into negative territory during the summer and fall of 2020, reaching a low point of negative 15% around October 2020. Home price growth for the overall metro, meanwhile, held up much better, remaining well in positive territory. More recently, however, Manhattan home price growth has surged into double digit territory and is slightly outpacing home price growth in the broader metro by running at close to 14% annualized.
Chart 6 shows the difference in the urban vs. suburban unemployment rate for the thirteen largest East Coast metro areas combined. A positive number means that the combined suburban unemployment rate is higher than the combined urban unemployment rate. A negative number shows that the opposite is true. Data stretches back to 2007 until September 2021. The chart shows that during the Great Recession, the combined suburban unemployment rate was generally higher than the urban rate – a period that generally lines up with the inflow of population into highly urbanized areas from the suburbs. During the pandemic, however, the opposite is true. The difference between the two fell sharply into negative territory at the onset of the pandemic, which means that the urban unemployment rate was much higher than the suburban counterpart. In recent months, the story has started to shift. While the urban unemployment rate is still higher than its suburban counterpart, urban areas have been gaining some ground vis-à-vis the suburbs from an unemployment rate perspective, thereby narrowing the unemployment rate difference.
Chart 7 shows the level of labor force for the urban core and the suburban areas of the New York City metro. The two series are indexed at the pre-pandemic period (February 2020) for a value of 100. The chart shows that the urban core labor force fell sharply during the onset of the pandemic but has gained some ground over the past year and is outperforming the suburban labor force index.

Suburbs are likely to continue dominating over the medium term

Despite expectations for urban cores, such as those of New York or Boston, to claw back some lost ground, it appears likely that the suburban population growth advantage is likely to continue over the medium term, thanks in part to the lingering popularity of remote work and demographic tailwinds. The latter is related to millennials – an age group of particular importance given that it has been one of the biggest sources of population growth for suburbs along the East Coast over the last few years (Chart 8). Millennials should continue to offer additional support to suburban population growth in the years ahead, given that they are increasingly entering the family-forming stage and their homebuying years, with preferences tilted toward single-family homes and the suburbs. This age group continues to make up the largest share of homebuyers at around 37% nationwide, according to NAR.6  In addition, of the homes purchased by millennials recently, more than four in five are single-family homes.7

Chart 8 shows the year-to-year difference in the share of metro area population between urban areas and suburban areas by age cohort. The data pertains to the thirteen largest East Coast metro areas combined. A positive number means that suburbs are increasing their size of overall metro population, while the urban share of the overall pie is shrinking. A negative number means that the opposite is true. The chart shows that urban areas increased their share of the metro population pie between 2009 and 2013. But since then, the suburban population share has been growing, while the urban share has been shrinking – a trend that's in line with the ongoing suburbanization trend. Looking at the details by age cohort, we can see that the 25-39 age group, which largely pertains to millennials (defined as those aged 25-40 in 2021), has been a big major factor behind the population swing to the suburbs in recent years.

Research from the National Association of Home Builders (NAHB) confirms that the preference for detached homes, a staple of suburbia, applies not only to millennials but also the average buyer, with more than two thirds of those surveyed earlier this year preferring single-family homes.8  What's important is that the health crisis appears to have had an impact on housing preferences too, leading to an increase in the share of buyers that want larger homes (21%) as a result of the pandemic.9  Complementing this, location preferences have also shifted as a result of the pandemic, with survey data showing a notable increase in the share of buyers favoring properties in outlying suburbs.

The other piece to the puzzle is tied to the future of work. According to the same NAHB survey above, households where at least one family member works or studies remotely where even more likely to want a larger home as a result of the pandemic, at 35%. Both firms and employees are still in the process of figuring out what the future of work will look like over the long-term. Depending where the pendulum lands, this will have important implications for the urban/suburban divide. So far, survey data and company-specific decisions point to a fragmented picture. On the one hand, some firms are summoning their employees back to work, while others like LinkedIn, Twitter and Amazon will give many of their workers the option to work remotely on a full-time basis. Then there's the hybrid approach, with companies allowing workers to split time between in-person and remote work. This latter strategy, which may allow for greater flexibility, appears to be relatively popular, garnering the support of 50-75% of employees (depending on the survey). Whatever the individual path, one thing is for sure: remote work will take on a permanently higher share than it did pre-pandemic, even as the traditional office recaptures some activity. This trend is expected to continue working in favor of suburbs. 

Builders have taken the cues from changing preferences on housing and work and are acting accordingly. A look at building permits issued across metros reveals that the suburbs have been grabbing a bigger share of the pie compared to the pre-pandemic period (Chart 9). Again, while there are some detractors here too, such as Philadelphia and Pittsburgh, the narrative holds for the vast majority of large East Coast metros examined in this report. An improved availability of housing inventory in the suburbs will help provide some offset against diminished affordability – a trend that has been more pronounced for single-family homes during the pandemic (Chart 10). Ultimately, a continuation of the homebuilding trend seen in chart 9 will mean that housing inventories should be yet an added element working in favor of suburbs from a population growth perspective. 

Chart 9 shows the suburban share of overall housing permits across the thirteen largest East Coast metro areas combined. The chart shows that since the beginning of the pandemic, the suburban share of housing permits in all thirteen metros combined has been increasing (even though not on a steady basis), rising from about 35% to around 45% recently. Chart 10 shows the percent difference between the median single-family home price and the median condo/co-op price. Two lines are present; one is the monthly difference between the two measures and the other is a 6-month moving average of the same to help smooth out the volatility. The chart shows that median single-family homes were around 10% more expensive than the median-priced condo/co-op before the onset of the pandemic, but this difference has increased to around 20% today. This given a faster increase in single-family prices vis-à-vis condo/co-ops during the pandemic.

 

Bottom line

The pandemic provided an added fillip last year to the long-standing suburbanization trend, as Americans set their sights on the suburbs in search of less denser living arrangements and more space for their home offices. Large metro areas along the East Coast mirrored this trend, with suburban population growth further widening its outperformance gap vis-à-vis urban cores across most metros. 

More recently, positive signals from housing and labor market data suggest that the underperformance of urban cores has likely abated to some degree, alongside improving public health conditions the ongoing economic recovery. Badly bruised urban cores, such as those of Boston and New York, are expected to regain some of their lost luster as the pandemic wanes further. Despite this, the suburban population growth advantage is likely to continue over the medium term. This as  demographic tailwinds and the lingering popularity of remote work continue to favor the shift to the suburbs.

Appendix

Chart A in the appendix shows the estimated net households moving in and out of New York City, with the data pertaining specifically to the 'city' (i.e., as opposed to the suburban parts of the metro area). A negative number means that there is an outflow of households. The data, which stretches back to 2017, is all negative, meaning that there has generally been an outflow of households. The chart shows that during the onset of the pandemic, this outflow intensified, with the data falling deeper into negative territory. But by mid-2021, the net outflow has returned near its 2017-2019 average. This would suggest that NYC's urban exodus experienced during the first leg of the pandemic has likely abated.

End Notes

  1. Pew Research Center, "As the pandemic persisted, financial pressures became a bigger factor in why Americans decided to move", Feb 2021, see here
  2. Bloomberg CityLab, "More Americans Are Leaving Cities, But Don't Call It an Urban Exodus", April 2021, see here. Analysis reveals that most movers, about 84%, remained within the same metro area. 
  3. Categorized counties as either urban or suburban based on Census Bureau measure on the share of the population living in urban areas (i.e., counties where more than 95% of the population lives in urban areas are classified as urban). For more detail see original report: "Back to the ‘Burbs – An East Coast Analysis", September 2018, here
  4. The population of Suffolk County, MA fell 0.5% last year and the population of New York County, NY (Manhattan) fell 1.2%. 
  5. There are some detractors to this broader trend; they include Pittsburgh, Orlando and Tampa. The suburban unemployment rate in these metros is actually higher than that of their respective urban cores, much as it was before the pandemic.
  6. NAR, "2021 Home Buyers and Sellers Generational Trends", see here and here.
  7. Ibid. According to NAR, detached single-family homes made up 81% of homes purchased by younger millennials (22-30) and 88% of older millennials (31-40). 
  8. NAHB, "What Home Buyers Really Want", Mar 2021, see here
  9. Ibid. 

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