If you have been on the internet lately you may have seen opinion pieces proclaiming the demise of the city. One even suggested that New York City is dead for good this time. Two related factors are driving these claims: Coronavirus and the corresponding rise of teleworking.
The arguments are sound. People do not want to be crammed together during a pandemic that flourishes in close quarters. Teleworking has allowed companies to mitigate this risk and continue functioning. But working from home leads people to question why they should live in expensive apartments when they can take that money to the suburbs and buy a house four times the size.
This scenario is playing out in cities all across the country. A Pew study found that 22% of Americans have either moved due to the virus or know someone who has. But this trend will not stand in the long run. The reason? Supply and demand.
City housing prices have risen at a rapid — borderline extortionate — rate in the last few decades. This mini bubble was driven by a demand that is now slumping. What we may see in the near future are housing prices across the nation nearing an equilibrium.
Demand will flow from the city to the suburbs and prices will follow accordingly. They will rise in the suburbs and drop in the city. The convergence of prices eliminates the suburbs’ cost-benefit that swayed people to leave initially. The key factors left will be how one views the space and lifestyle.
At first, many will be leery of returning to the cities, but they will begin filtering back as coronavirus fades. Humans are very good at forgetting the bad. We rapidly dump negative memories and cling tenaciously to the positive ones. People will reminisce about cities with rose-tinted glasses. They will remember city life: theaters, markets, and city parks all swirling with vibrant humanity. They will miss the ease of meeting their friends on Friday to enjoy the nightlife before a quick Uber ride home. In the suburbs, some will get bored of deciding between the Walmart 10 minutes away and the Walmart Supercenter 15 minutes away. Or maybe they’ll get sick of having to continuously repair the deck. With housing costs being closer, many will return to the city lights. Others will happily stay. Unshackled from the office, people will live where they prefer. Many will choose the city.
Of course, this argument is predicated on the ascendance of teleworking. If things revert to the old normal after COVID is subdued, the trend of skyrocketing prices in the city will continue. The demand will allow developers and landlords to continue charging as much as the market can bear. If that’s the case, I hope you take this opportunity to secure a friendly lease while you still can.
