A recent market report from Zillow has found that urban and suburban housing markets in the US haven't actually diverged all that much as a result of this pandemic. Despite what you might be reading in the news, Zillow's national listing data does not seem to suggest that an urban exodus might be underway. Suburban and rural home listings are seeing about the same attention (views) as they were last year. And the rates of appreciation seem to be holding. As of June, annual home value growth was 4.3% for urban areas and 4.1% for suburban areas.

There are, however, some exceptions and local nuances. Rents in urban zip codes have fallen more compared to their suburban counterparts. This seems to make intuitive sense given that I would have expected demand to be less from young professionals, students, and immigrants. Many cities probably also saw a bunch of their short-term rental inventory flip over to the long-term rental market (how much, I don't know). But my view is that this will prove to be a short-term phenomenon.

There are also some markets that have performed quite differently. San Francisco is one of those cases. The city proper has seen home prices fall 4.9% and inventory (listings) increase by 96% year-over-year. This is a massive outlier. If I were to speculate as to why this is the case, it would be that (1) this was brewing even before COVID-19 and (2) the tech community is perhaps more convinced of this whole working from home thing. Why remain in expensive San Francisco? It'll be interesting to see how this plays out. For a full copy of Zillow's urban-suburban market report, click here.

Image: Zillow

Over the past 5 years or so, real estate headlines in the Greater Toronto Area have often focused on the rapid appreciation of low-rise housing. High-rise housing simply wasn’t appreciating at the same rate – at least in aggregate terms.

But 2017 has brought a different story. 

If you look at BILD’s “New Homes Monthly Market Report” (data provided by Altus Group as of July 2017), you can see that high-rise pricing is now on a similar trajectory to low-rise pricing.

Here is that graph:

This sharp uptick in pricing is also apparent when you look at the average price per square foot of new high-rise inventory. As of July, it was $764 psf across the GTA. See below.

At the same time, average unit sizes have also jumped up to 871 square feet. So not only are new high-rise homes becoming more expensive on a normalized basis, they are also getting bigger, which further increases prices.

I recognize that we’re only seeing data up to the end of July, but, from the looks of it, 2017 is shaping up to be an extraordinary year for the condo.

Of course, part of the reason this is happening is because remaining inventory for both low-rise and high-rise product is hitting 10-year lows. We’re back to the topic of supply.

If you’re curious how some of these numbers have changed from the month prior (June 2017), check out this post.

Earlier this month, the Royal Bank of Canada and the Pembina Institute co-published a report on Toronto’s housing market called "Priced Out". The overarching argument is that homebuyers in the Greater Toronto Area (GTA) are being “priced out” of the areas in which they really want to live, which happen to be walkable and transit-oriented neighborhoods.

In fact, according to their research, 80% of residents in the GTA would be willing to sacrifice space (size of house and yard) if it meant they could live in a more walkable and urban neighborhood. But at the same time, more than 70% of GTA residents say that they live where they do because of affordability reasons, not because of actual preference. This, of course, isn’t new. It’s the whole “drive to affordability” notion—just keep driving until you can afford the housing. 

Overall though, the report does reinforce a macro tend that I’ve discussed many times here at Architect This City. People are returning to cities in droves (or would at least like to, if they can afford it).

If you’re interested, the report also has some good data on Toronto and Canada’s housing markets. 

Here’s how average home prices in Canada trended between 1980 and 2012. Vancouver became a total outlier starting in the early 90s (thanks Hong Kong).

And here’s a look at housing completions (so new construction) by product type in the Greater Toronto Area. Note how apartments/condos surpassed single-detached houses in and around 2008.