The pandemic has had a variety of ripple effects in our world including where people are living. A 2020 study by freelancing platform, Upwork, found that up to 23 million U.S. workers planned to move as a result of the shift to remote work. That’s about four times the normal rate. Further, one in five of those people were planning to move from major U.S. cities. In fact, San Francisco alone saw 89,000 households leave last year. So what impact will this shift have on big cities and is it a good time to move into them? Are home prices dropping due to an increase in supply? You may be surprised! Here’s a look at the stats.
Median Home Prices in the 10 Biggest U.S. Cities in 2021
Let’s take a look at the 10 biggest U.S. cities by population and the median prices for homes in both 2019 and 2021.
1. New York, New York
The typical value of homes in New York, New York was $640,000 in 2019 and is $657,545 in 2021.
Total increase: 2.74%
2. Los Angeles, California
The typical value of homes in Los Angeles, California was $720,000 in 2019 and is $863,957 in 2021.
Total increase: 19.9%
3. Chicago, Illinois
The typical value of homes in Chicago, Illinois was $265,000 in 2019 and is $293,626 in 2021.
Total increase: 10.8%
4. Houston, Texas
The typical value of homes in Houston, Texas was about $185,000 in 2019 and is $217,545 in 2021.
Total increase: 17.6%
5. Phoenix, Arizona
The typical value of homes in Phoenix, Arizona was about $243,000 in 2019 and is $340,341 in 2021.
Total increase: 40%
6. Philadelphia, Pennsylvania
The typical value of homes in Philadelphia, Pennsylvania was $180,000 in 2019 and is $217,485 in 2021.
Total increase: 20.8%
7. San Antonio, Texas
The typical value of homes in San Antonio, Texas was about $187,000 in 2019 and is $216,218 in 2021.
Total increase: 15.6%
8. San Diego, California
The typical value of homes in San Diego, California was about $650,000 in 2019 and is $808,648 in 2021.
Total increase: 24.4%
9. Dallas, Texas
The typical value of homes in Dallas, Texas was about $226,000 in 2019 and is $259,621 in 2021.
Total increase: 14.8%
10. San Jose, California
The typical value of homes in San Jose, California was about $1,004,000 in 2019 and is $1,211,844 in 2021.
Total increase: 20.7%
The Bottom Line
Overall, home values in big cities have gone up across the board over the past two years, despite the pandemic and migration trends. However, increases are always to be expected due to inflation. According to the U.S. Bureau of Labor Statistics, the average inflation rate between 1967 and 2021 was 4.15% per year. That means an increase of 8.30% in median home prices over a two-year period would be normal. In looking at the increase rates above, you can see that many big cities had above-average increases in home values while New York, New York saw pricing fall below the average with just a 2.74% increase.
Home Value Trends and Prediction in 2021
According to Reuters Polls, housing prices have raced up and the housing market is expected to accelerate over the next year with a sustained rise in prices and risks skewed more to the upside. So while prices are up in most big cities, they are expected to continue to rise which could lead to an opportunity for faster than usual equity gain. Reuters attributes this to low-interest rates, a strong pandemic recovery, massive fiscal support, and a demand for larger living spaces as more people spend more time at home.
Are You Ready For Big City Life?
Although some have always dreamed of living outside of the big city, others can’t wait to move in. While prices are mostly at or above the average growth rate in big cities, they don’t look to be stabilizing or dropping in the next year. They are still on an upward trend. Now could be the time to make your big city dream come true, especially if your dream destination happens to be New York where prices are lower than usual. And if you are looking to rent before buying, you’ll likely be in luck as rental prices are still below pre-pandemic rates in most places. As a result, you can get more for your money!
If you’d like help making your next move, OVM Financial’s team is standing by to help you get the financing you need. Get started!
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