Buyers More Flexible on Commute Than Home Size
Most consumers are willing to extend their commutes in order to find a single-family home with a yard, according to a new Redfin survey of 1,400 consumers. Eighty-nine percent of survey respondents say they would
Most consumers are willing to extend their commutes in order to find a single-family home with a yard, according to a new Redfin survey of 1,400 consumers. Eighty-nine percent of survey respondents say they would choose a single-family home with a backyard over a unit in a triplex, even if the latter was closer to their job. For millennials, that figure is 93%, the study shows.
Though buyers overall show a preference for single-family homes, the properties needn’t be large. The median home size in the U.S. has been dropping, perhaps due in part to higher home prices, researchers note. Median home size peaked at 2,467 square feet in 2015 but lowered to 2,386 square feet in 2018.
The price gap between single-family homes and condos is falling in some of the nation’s priciest locations. But as demand rises, the gap is increasing in inland areas typically known for greater affordability. For example, in coastal San Jose, Calif., single-family homes sell for 25% more than comparable condos, which is down from 31% in 2013. Likewise, in Los Angeles, there is a 19% premium on single-family homes, down from 27% six years ago. “The decline in those places could mean single-family homes are becoming less valuable to buyers,” the study notes.
However, in areas known for greater affordability, prices for single-family homes over condos have risen, such as Birmingham, Ala. (now a 29% premium, up from 15%). The premium for single-family homes has also risen over the last six years in other areas like Houston (a premium of 19%, up from 9%) and Tulsa, Okla. (a premium of 27%, up from 12%).
More than a quarter of buyers—28%— say that plenty of living space is the most important factor in their home choice, according to the survey. “This is another way America is dividing between coastal cities and the more affordable heartland,” says Glenn Kelman, Redfin’s CEO. “All else being equal, almost everyone would prefer a house over a condo, and that preference is only getting stronger in most parts of America. But in the big city, that preference is actually getting weaker. As more folks move from San Francisco or New York in search of that house with a white picket fence, the ones left behind will be those most comfortable with living in a condo or townhouse.
“The question now becomes whether cities in the middle of a transition from affordable to affluent—like Minneapolis, Seattle, Portland (Ore.), Austin (Texas), Nashville (Tennessee), and Charlotte (N.C.)—can use local zoning laws to shift their citizens’ preference for single-family homes so that it becomes less strong over time, or if people will shift away from them.”
Homebuyers appear more willing to settle for a condo or another unit with shared walls if the home itself isn’t the defining reason why they’re moving, adds Daryl Fairweather, Redfin’s chief economist. “In a sprawling place with an emphasis on private homes like Houston or Las Vegas, people may actually be moving there because there are plenty of affordable, large single-family homes where they can raise a family.”
Researchers note that if single-family homes continue to command more of a premium in affordable inland areas but less in expensive coastal areas, it could further exacerbate the divide that’s already happening between the way people live on the coasts and the middle of the country.