Americans are taking to the city lifestyle more and more, and while the suburbs are gaining traction as millennials reach the peak age to start a family, urban living doesn’t seem to be slowing down.
Zillow released a report measuring home value trends in urban settings versus suburban settings, finding that city home values are outpacing those in the suburbs.
The analysis was based on a survey Zillow conducted to determine how people define the communities in which they live– rural, suburban or urban. By using characteristics of those places and defining ZIP codes, Zillow broke down the shifting of home values over one and five years.
“This trend, in part, reflects home buyers’ changing preferences, as they seek amenity-rich, dense and walkable areas that are often closer to their workplace,” said Zillow chief economist Dr. Svenja Gudell, in a statement.
“In the future, this lifestyle trend will change some suburbs as we know them, and they’ll start to feel more urban as buyers move further from city centers in search of affordable housing in communities that still feel urban.”
- The average home in the city is worth 2 percent more than the average suburban home. Compare this to 2015 when the average urban home was worth 1.2 percent less than the average suburban home.
- The trend is particularly prominent in big cities with young populations, like Boston, Seattle and Washington, D.C.
- The data show changing demographics within urban settings and shifting preferences for a different lifestyle as well as the higher cost of urban development.
In the nation, the 2015 urban Zillow Home Value Index was $269,036, which is an annual change of 7.5 percent and a 28.4 percent five-year uptick. This is compared to $263,987, the ZHVI of houses for sale in the suburbs, which marks a 5.9 percent annual increase and a 21.1 percent five-year increase.
- In Chicago, the urban Zillow Home Value Index in 2015 was $198,982.
- The urban one-year ZHVI change was 2 percent and the five-year increase was 2.3 percent.
- In Chicago suburbs, the 2015 Zillow Home Value Index was $231,008.
- The ZHVI increased 1.1 percent annually in the suburbs and 5.1 percent on a five-year basis.