Is it Easier to Sell a Home in the City or Suburbs
The Housing Dilemma: Is it Easier to Sell a Home in the City or Suburbs
Deciding whether to buy or sell a home in the city or the suburbs is an age-old question. Many home buyers consider how easily a home will re-sell as a key factor in their home shopping. As the red-hot seller’s market is predicted to begin cooling off in 2019, home sellers will need to think even more strategically about selling in the city and the suburbs.
There are a few ways to interpret “easy to sell” depending on what type of home seller you are. Whether you are selling your own home or are a real estate investor or agent, you may value and view various selling determinants differently.
For example, if you are selling your own home, you may place greater priority on how quickly you can sell. If you are a real estate investor, you might be most concerned about the appreciation of home values. If you are a real estate agent, you might more fully consider how many homes you can sell. This is affected by how easily you can persuade buyers to make a purchase.
Think of how easily a home will sell as an equation of sorts, with sale profits, sale time, and a buyer’s willingness to purchase being the three key factors that influence the ease of selling a home. However, the weight and importance given to each of these factors is up to your discretion. Depending on how you consider each of these factors determines how “easy” it is to sell a home in the city or the suburbs.
In order to determine whether it will be easier for you to sell your home, consider the following key elements that influence sale profits, sale time, and a buyer’s willingness to purchase.
Sale Profits
One of the most difficult things to do in real estate is predict where (and when) home prices will appreciate. Many real estate investors succeed almost exclusively by identifying housing markets that are on the rise. Selling homes in the suburbs or the city can have an impact on the profits you can make when selling a home. Consider the following factors that influence sale profits in suburban versus urban areas.
Appreciation of Home Values in Urban Areas
When identifying homes based on the chances that it will appreciate, homes in urban areas tend to appreciate more quickly than suburban areas. For example, according to Realtor.com, the price change of homes in Atlanta, Georgia, from January 2015 to January 2016 was 24.5 percent for urban homes and 13.6 percent for suburban homes.
Additionally, populated cities tend to have less-volatile housing markets, as growth tends to be steadier in urban economies that rely on multiple businesses—whereas many suburban areas rely on only a few businesses for economic stability and growth.
Demand for Homes in Suburban Areas (Especially among Millennials)
Millennials haven’t historically been big homebuyers, but decreasing home prices and a better awareness of millennial needs in the marketplace in 2019 could turn that around. More and more millennials are becoming motivated home buyers as they reach the “sweet spot” for home buying in their mid-20s to late-30s, as many of them are beginning to settle down and have families.
With that trend, millennials want more house for less money, leading many to look to the suburbs for more than just starter homes. They want larger, technologically advanced homes that they can only afford in suburban areas. This could mean an increase in demand for homes in suburban areas in the coming years—making it easier to sell homes in the suburbs.
Sale Time
For many home sellers, selling a home quickly can be imperative. Real estate investors and home “flippers” who invest their own cash in fixer-upper homes they sell have a big incentive to offload the homes quickly, reducing the amount of time they have money tied up in a certain home. The more quickly investors and home flippers sell homes, the more homes they can sell. And the more homes they sell, the more money they can potentially make.
The time of year, upgrades and renovations, and many other factors influence how quickly a home will sell. In particular, the location of the home (suburban area or major city) can have a huge effect on sale time. For example, a home in the country will typically take longer to sell than a home located near a city center. However, homes may sell faster in suburban areas depending on the following factors.
Market Saturation
Homes in areas where inventories are high will sell less quickly than areas where inventory levels are low. If an urban area has a lot of rental properties and relatively few buyable homes, those homes may sell faster than homes in a suburban area with a lot of new development.
Likewise, if there are a lot of similar homes in the same area on the market, your home is not likely to sell as fast unless you list your home at a competitive price.
Desirable Surrounding Area
While this may seem obvious, some people become so accustomed to where they live that they don’t stop to think about how well the area will appeal to buyers. Suburbs have a slight edge here, as cities are often perceived as having higher crime rates. And a home in a dangerous area simply won’t sell as quickly as a home in a small, safe community with parks and other local amenities.
Type of Home
Whether you’re selling a home in the city or the suburbs, recent research has found that high-end homes do not sell as fast as other home types. While many people want to find a nice home, the population looking for all the bells and whistles makes up a much smaller group of buyers.
So if you’re doing renovations prior to selling a home, be aware that certain home upgrades may not be as appealing to buyers as you might think. If you need to upgrade, go for tried-and-true build-outs that have proven returns over more frivolous aesthetic changes—unless you’re certain that’s what your target buyers will want.
Buyer’s Willingness to Buy
A buyer’s willingness to purchase a home largely depends on their personal needs and preferences—and to what degree a home will fit those needs and preferences. As a seller, you need to consider how well your home matches the market.
To do that effectively, consider the following influential factors, and how those may differ between buyers in suburban areas versus cities.
Commute Time
Research shows that commute time is linked with well-being, and people with the longest commute times tend to have the lowest overall satisfaction with life. As a result, commute time is a major consideration for most people when purchasing a home.
People tend to think about whether their commute is quick and easy or jammed in bumper-to-bumper traffic. Additionally, some people don’t mind a longer commute if it provides time to catch up on podcasts or think about the day ahead. Access to public transit can also make a longer commute more palatable.
Overall, where a person works greatly influences where they purchase a home. If someone’s work is located in the city—and city centers are usually the epicenter of most businesses—they are more likely to purchase a home close to the city to avoid a long and painful commute.
However, in places where startups and smaller companies are common, there is more incentive for those businesses to set up shop in suburban areas where office space is cheaper. In areas like these, it may actually be easier to sell homes in a suburban area with multiple small businesses than in a congested city.
Home Size and Quality
Homes in the city tend to be smaller and more expensive than suburban properties. Because land generally costs less in suburbs than major cities, home buyers can almost always count on buying larger homes for less money in the suburbs.
In addition, many buyers prefer new construction homes in the suburbs because the efficiency, design, and overall quality of new-build homes tends to be much better than older city-center homes—and can be bought without the cost and stress of renovations.
Conveniences and Necessities
People often think of ease and convenience when purchasing a home. Homes located near easily accessible grocery stores, hospitals, or restaurants are often much more attractive to buyers.
Urban areas tend to offer easier access to everything that a buyer could want, and that includes more than just stores and restaurants. For example, most urban areas offer easier access to a wide selection of local internet and TV providers. The absence of any of these conveniences and necessities could make buyers less likely to buy homes in suburban areas. If you have a suburban home that is internet- or TV-ready, note that in the listing—it could provide a big boost in interest.
Entertainment and Hobbies
A buyer’s personal entertainment preferences and interests often influence where they will purchase a home. City scenes abundant with food, cultural events, professional sports, and a robust nightlife tend to be among the most attractive entertainment options for young or single buyers.
However, a recent movement toward camping and other outdoor activities embraced by “outdoorsy” millennials, particularly millennials with families, could change that. According to Kampgrounds of America (KOA), there has been an increase of six million new camper households in the United States. If the trend continues, we could see more buyers looking for homes closer to the outdoors and camping sites, causing them to move out of big cities and into suburban areas.
Family
Buyers with families evaluate school districts in the area, and the results often show schools influence where they live. Parents are typically keen to purchase a home where their children will be safe and have room to grow, so as a general rule, households with kids tend to favor suburban areas that can accommodate a large or growing family.
Availability of affordable private schools, good charter schools, or highly-rated public schools will affect where buyers with families will decide to purchase a home. A home with a large yard where children and pets can play may be more desirable for some families than city dwelling. On the other hand, some families may find the city more appealing, where public transportation makes getting around easier than carpooling long distances for after-school activities.
The Takeaway
So are homes easier to sell in the city or the suburbs? Like the answer to most complicated questions, it depends. As you consider the factors discussed above that determine how easily a home will sell, consider which is most important to you as a seller.
Overall, cities have historically been the easier place to sell homes. However, it is becoming easier to sell homes in suburban areas. As the population grows and suburban areas become more developed, and as millennials become a larger purchasing power, we may see more and more homes selling quickly in the suburbs.
You may be able to sell homes at a higher price in the city, but may sell a home faster overall in the suburb. The demand for homes tends to dictate the market.
Don’t be discouraged if a home is not selling as quickly as you’d like. Evaluate the market and price competitively. Also, note that simple factors like the quality of photos posted and the description of the home can impact how many people choose to take a tour of your property.
Whether you are selling in the city or the suburbs, consider other factors such as listing price, the appeal of the home, and the neighborhood. To be competitive in the housing market, so many factors have to be taken into consideration.
In general, how “easy” it is to sell a home in the city or suburbs is determined by how much work you are willing to put in as the seller. Research the market, make the home eye-catching and attractive, and spread the word about open houses. In time, you’ll be able to sell competitively in both the city and suburbs!
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