(Home value appreciation is now climbing faster in cities than suburbs. This is a change from past years when people fled the city for the burbs in the pursuit of the American Dream.)
The suburbs used to be where people went to find the American dream, and housing prices reflected this. Not anymore, according to new data from Zillow.
Now in many parts of the United States, urban home values are outpacing the value of suburban houses. The result is suburbs will change to become more like cities to attract residents. This already is happening in Seattle suburbs, such as Burien, Bothell and Redmond, whose downtowns are adding residential units and urban amenities.
In the Seattle metro region in 2015, the mean value of urban houses was $437,813. That was 11.4 percent higher than the previous year. The suburban mean value increased 9.4 percent to $410,991. Nationally, suburban home values grew 5.9 percent in 2015, while urban homes gained 7.5 percent in value.
Zillow (Nasdaq: Z, ZG) said the trend has “vast implications” for low-income people who traditionally have lived in cities to be near services and jobs. Zillow has found that in San Francisco and Seattle, high-income people now have shorter commute to downtown, while low-income folks are traveling much farther to get to downtown jobs.