Thinking of moving to the suburbs in 2021? Things to remember
American suburbs have been demographically reshaped in the past decade – according to Census data, between 2010 and 2019, the number of suburban renters grew by 22%, which drove 103 suburbs in the nation’s largest metros to flip to an apartment renter-majority population.
Here are some local data points:
- 3 Boston suburbs became renter majority over the decade. Of all, Malden holds the highest share of renters –55%, with renter population here building up from 48% (2010). Malden is followed by Lowell (54%) and Lynn (51%).
- Renter population growth indicates that Revere might change from owner to renter majority in the following years.
- Other Boston suburbs have seen impressive growth in renter population, despite still being owner-dominated. Haverhill is no 1 on this list, with a strong 25% increase in renter share (from 31% to 39
Thinking of moving to the suburbs in 2021? Things to remember
flocked to the suburbs. As work shifted to a remote basis, possibilities opened for families to live far beyond crowded urban hubs. Over the past year, outer suburbs, or exurbs, have experienced a particularly intense boom. It’s those distant areas that saw the sharpest increase in interested buyers, according to Realtor.com.
Farther from big cities, the land is cheaper. Homes there — with ample space to quarantine comfortably — are more affordable to potential homeowners. And builders have also taken notice, constructing new houses in those sparser regions. And though the waning pandemic might have signaled a potential bust, the Delta variant further complicates the future of exurbs.
We’ve drastically altered our patterns for how we live and work. But how long will it continue? Will people return to working in person, and to what extent? These are the questions that real estate experts are now asking.
Realtor.com Chief Economist Danielle Hale acknowledges that the jury is still out on the fate of exurbs. In a recent report for the site, Hale explained, “It’s possible that some areas that saw prices rise because they were particularly attractive during the pandemic might not be able to sustain those high prices… The factors that drew people to those areas, like having a lot of space and being far away from everything else, may change.” The factors that drew shoppers to exurbs were highly volatile.
Still, Hale points out, “The desire for affordability, which is only going to become more important as interest rates go up, is going to keep interested in the suburbs and outer suburbs high. They have always been the escape valve for high city prices.” During the pandemic, interest rates fell below 3% for an average 30-year fixed rate. Naturally, this has attracted buyers to more expensive homes. In the exurbs, price growth has outpaced both cities and the nearer suburbs. But how long prices will continue to rise? Ali Wolf, the chief economist of building consultancy for Zonda, worries that if mortgage payments becomes too high, “There are locals who will just get crushed.”
For now though, the lack of affordable options in cities as well as those closer suburbs is keeping exurb demand high. “It’s not a new phenomenon that, when people can’t afford the city, they look further out,” Hale points out. Additionally, the possibility to work from home appears to be sticking around. “Everyone’s not going back to the office five days a week anytime soon,” says Kelly Mangold, a real estate economic specialist for RCLCO. “I don’t think prices will drop off dramatically.”
And aside from residential remote workers, there are investors seeking to flip or rent out exurb properties. Commenting on that phenomenon, Devyn Bachman, the vice president of research at John Burns Real Estate Consulting, predicts healthy price appreciation. Although “you may see some small corrections in these markets,” he says. Experts are not expecting the exurb market to fully crash. Unlike in the mid-2000s real estate bubble, demand is still outpacing supply.
Then again, maintaining such large properties is expensive. It’s key to note some potentially risky factors of exurb homeownership: sprawling square footage and big yards result in extra care and higher heating bills. Overbuilding in those areas does not seem likely — even while the open spaces of exurbs entice building prospects. In the second quarter of 2021, about 9.2% of single-family home construction took place in the exurbs of big cities, according to the National Association of Home Builders, and 8.9% of construction occurred in the exurbs of medium-sized cities.
Increasing the number of exurb homes and residents, in turn, attracts commerce: stores, restaurants and more. So as amenities and available homes both continue increasing, it’s entirely possible the exurb housing market will remain strong — so long as supply does not start outweighing demand.
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Many of my friends are thinking about moving to the Boston suburbs as they no longer need to work in a downtown Boston office building, at least not in the near future.
Owning a single-family home can cost more in maintenance than one may realize. One way to get a grip on potential future repairs is by having a general home and structural pest inspections. You can then set up a schedule and ballpark costs for larger-ticket items so you can make sure you’ll be able to properly maintain your home over whatever time horizon will apply to you.
Building components that need attention on a consistent basis are:
Roof. A single-family home is fine until you notice the water or stains on the ceiling. If it’s been more than, say, 15 years since you’ve done any maintenance or repairs, you may want to have a roofing company do a check. Periodic maintenance extends the life of the roof and can postpone a replacement.
Water heater. Most people replace their water heaters as part of an emergency situation after they discover a flood from a rotted-out, aging water heater. Be proactive and budget for a replacement if your water heater is 10+ years old.
Siding. If you notice dry rot, that means you have siding that needs attention. And it is easily $20,000+ to rip off siding, replace and repaint it. Get a handle on the condition of your wood throughout the building, and make sure you address that kind of maintenance in a timely manner. The worse it is, the more expensive it is to fix.
Front stairs. You can’t get around replacing front steps if they’re shot. $35,000 is the going rate for a flight of stairs to the average house in San Francisco. Make sure you seal any gaps in stairs that are exposed to the elements. And get a pest inspector’s opinion on the condition of the wood underneath terrazzo or concrete.
Foundation. Buildings can go years with below-grade foundations, or major foundation issues. But you have to deal with it at some point, especially if the foundation is brick and in poor condition.
Sewer line. If you have the original clay piping, it is a sound idea to have a reputable plumbing company do what’s called a sewer lateral inspection to determine whether there are any holes in the line. Because things like tree root intrusion can cause a sewer line breakdown—and a backup in your home.
Decking. Your structural pest inspector will examine your deck to flag dry rotted areas. Major deck repairs (or replacements) are expensive, so it’s good to keep up with what’s needed.
And of course, consult your financial advisor to make sure you’re setting aside sufficient funds to maintain your home. You’ll also be maximizing your property value, as buyers will typically be more willing to pay more for a well-maintained home.