Housing prices – particularly the price of single-family homes – in the Washington metro area have risen rapidly since COVID-related restrictions were first implemented in March 2020. The Home Price Index ( data, methodology) compiled by the Federal Housing Finance Agency, shows that single-family home prices (including appraised values ââof homes bought and refinanced) in the Washington metro area rose 12% between March 2020 and March 2021. Likewise, the price of âbuy-onlyâ single-family homes (ie real arms (long-term sales, and excluding those valued for refinancing) has increased by 20%.
the the Wall Street newspaper reports that nationally, in recent times, homebuyers are placing less importance on commuting time when buying a home. The researchers, using data from Zillow, show that in high-cost markets like ours, “home values ââappreciate more quickly in areas where daily commutes to central business districts are longer.” This is a reversal from a year ago, when homes closer to central business districts appreciated faster. This is presented as evidence that homebuyers in high cost markets are “willing to trade longer commuters for lower prices”, perhaps in the hope that they can continue to work remotely and should commute fewer days, if any.
To see if this observation holds for the Washington metro area, we used Zillow data to map increases in home values ââacross counties in the metro area. We focused on single-family homes, excluding condominiums and co-ops, as multi-family homes, which are more concentrated in the District of Columbia, have been negatively impacted by COVID-19.
Zillow data shows that since March 2020, when COVID-related restrictions were first implemented, single-family home values ââhave appreciated faster in all counties in the region compared to the previous year. , but the rate of increase was particularly high in the outer counties. For example, during this period, the value of single-family homes appreciated 8% in DC, 7% in Alexandria and 6% in Arlington. In contrast, values âârose nearly 20% in Prince William and Fauquier counties, 19% in Loudoun and 18% in Montgomery and Prince George counties.
In comparison, during the one-year period from March 2019 to 2020, central locations such as Arlington, Alexandria and the District saw single-family homes appreciate at rates similar to or greater than the appreciation of the whole region. These two maps, side by side, indeed suggest that demand for housing in the region has shifted to areas with longer journeys and cheaper prices. It’s important to note that commuting isn’t the only consideration for homebuyers. There could be many factors behind this trend, such as people wanting to live in less dense areas after the pandemic or the desire for more space. But a longer-term shift to remove work or flexible work options would certainly reduce the importance of commute times.
Yesim Sayin Taylor is the Executive Director of the DC Policy Center.
Photo credit: Geoff Livingston (source)
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