Is the return of Urban demand back?

[Jonathan Dempsey]

Since the beginning of the pandemic we have seen a massive shift to the suburban/rural markets from major cities.

What kinds of shifts are you seeing / anticipating in your urban market?

Here in Philadelphia, things are returning to normal socially. Housing demand is becoming healthy again. Supply is low and will remain low with the high costs of lumber and other resources associated with construction.

I anticipate a surge in city prices over the next 6-12 months based on these factors.

What is the sentiment in other urban markets?

[Jaron Walling]

@Jonathan Dempsey I think the major shift with remote-work and flexible work schedules really fueled the fire, but I the urban markets have been burning for months. They bounced back so fast it was hard to even notice the dip. Most C/B/A class neighborhoods are hot with sky high prices. Inventory is extremely low and buyers don't care about over paying. I thought my neighborhood was cheap (why I invested here) but that's not the case right now. Starter homes don't exist anymore at these prices unless you make 2x my salary. 

Everyone keeps saying it's not a bubble. We're all hiking the mountain so where is the summit?

[Lien Vuong]

I operate in the Greater Boston market and it has certainly experienced a resurgence of the urban community. Unit that were once more stagnant, not being able to sell or rent, are now getting some of the activity it did pre covid. I still believe that it will be end of year before condo and urban units return to it's original glory but I am happy to say that I see real signs of revitalization in our Boston market. 

[Michael Mendez]

Here in Lubbock TX, we've continued to see an increase in population. However, we are a small city (230K - 250K) and within a couple of minutes you can come across rural property. I've been seeing a mixture of people wanting to buy a house and have 1-2 acres, within city limits. 

[Ryan D.]

Looking at the data over the past 16 months leads me to believe urban demand never really slowed down. Especially in Philadelphia. This narrative seems to be more of a news headline than an actual trend supported by statistics showing decreased demand. Also, September lumber futures closed limit-down at $852 today, down almost 50% from the $1,686 peak on May 7th so I'm not sure how long the high costs of lumber will keep supply down.

[David Haynes]

I completely agree with @Ryan D.

The only possible dip in prices in Philadelphia was between February and April of 2020. And I wouldn't say a lack of demand caused it. It was caused more by the restrictions placed on the real estate industry. 

Demand in the city has consistently outpaced supply. I don't see demand going down any time soon.

[Michael Mendez]

@Ryan D. How far is it from Urban setting to a rural setting? 

[Irfan Raza]

Retail market may have seen a decrease in demand.  But in the investor market we saw a shortage of supply which increased pricing.  Right now supply is coming back in and there is a little bit of a pricing adjustment down.  We really need sheriff sales to open back up to even out the supply in Philly and therefore the pricing. 

[Rich O'Neill]

@Irfan Raza sheriff sales opening back up will be a good thing for supply, but won't it take a while for the cases to actually make it through the court system and get to the sale? My understanding is that the courts have also been closed meaning the foreclosure cases cannot advance forward toward the sale. Am I mistaken there? 

It's going to be a crazy end of 2021 and beginning of 2022 regardless as the last of the restrictions go away and things find a new balance. 

[Irfan Raza]

@Rich O'Neill thats a good point.  Lets see what happens.