National property broker Redfin is reporting U.S. housing markets in vacation destinations and relatively affordable suburbs of big cities have heated up more than any other area over the last year, a time period that starts with the onset of the coronavirus pandemic in 2020.
Places like Lake Tahoe, Cape Cod, and suburbs of Chicago and New York City are gaining popularity as homebuyers take advantage of remote-work policies to prioritize affordability and personal preferences like proximity to nature and recreation over living near the office.
This is according to a Redfin analysis of the 10 U.S. housing markets that have heated up most over the past year, and the 10 that have cooled down most. Redfin's ranking is based on year-over-year change in home prices, home sales, the share of homes that sold above their list price, the speed of home sales and Redfin.com searches.
Vacation towns and suburbs are heating up most
El Dorado County, CA--an area that spans from the eastern outskirts of Sacramento to the southern part of Lake Tahoe--is number one in Redfin's ranking, with measures of homebuyer competition growing more than any other U.S. county over the last year. Home prices increased 36% year over year in January, and the median number of days on market fell 50 days from the year before.
"Parts of El Dorado County, like Lake Tahoe and the upscale community of El Dorado Hills, have been hot throughout the pandemic, partly thanks to remote work," said local Redfin agent Ellie Ruiz Hitchcock. "About half of buyers in El Dorado Hills are coming from the Bay Area and half are locals, including people coming from neighboring Sacramento, who are upgrading their homes. Tech workers moving out of Silicon Valley are seeking larger homes, more overall space and simpler lifestyle at a fraction of the cost. Most homes in the area are receiving multiple offers."
Expensive East Coast job centers are cooling down
Arlington County, VA, home of Amazon's second headquarters in Crystal City, is ranked number one on the list of housing markets that cooled down most from January 2020 to January 2021. But the housing market is so hot throughout most of the country that even in the market cooling most, prices are up 4% from last year, and 23% of homes are selling above list price.
That's an about-face from late 2018, 2019 and early 2020, when homebuyer interest in the areas surrounding Crystal City skyrocketed after Amazon's HQ2 announcement. But with the surge in remote work over the past year, living close to the office isn't as important as it once was and housing markets in expensive job centers are suffering. The cooldown in Arlington County is particularly drastic because it was skyrocketing a year ago, just before the onset of the pandemic. It's also worth noting that Charles County, MD and Frederick County, MD, both part of the Washington, D.C. metro and home to farther-flung D.C. suburbs, are both on the list of places heating up most.
"Although single-family homes in residential parts of Arlington County are still hot and most are receiving multiple offers, condos have cooled down since the pandemic started a year ago," said local Redfin agent Mara Gemond. "Arlington County is developed along a transportation corridor, with dense, high-rise condos located within two or three blocks of metro stations, then townhouses a little farther away, then single-family once you get out into the residential neighborhoods. Those blocks right next to the metro have taken a nosedive because people want bigger houses, they don't want to share spaces with their neighbors and they're realizing they don't need to live close to transportation if they're not commuting into the office."