The suburbs have greater population growth, but urban areas are now growing at a faster pace than during the years of the housing bubble.
Asking prices in urban neighborhoods are rising only slightly faster than in the suburbs, and the suburbs actually have higher population growth, according to the Trulia (TRLA) Price Monitor and Rent Monitor.
The two monitors measure asking prices and rents, and adjust for the changing mix of listed homes. Because asking prices lead sales prices by approximately two or more months, the Monitors reveal trends before other price indexes do.
Asking home prices continued to rise at the start of the spring housing season despite the drop in investor purchases.
Asking prices rose 1.2% nationally in March 2014 compared to March 2013. Asking prices rose 2.9% from February to March 2014, seasonally adjusted, reflecting three straight months of solid month-over-month gains.
Asking prices year-over-year are up 10% nationally, and up in 97 of the 100 largest metros. Albany, N.Y.; Hartford, Conn., and New Haven, Conn., are the only three large metros where prices fell year-over-year, albeit slightly.
The report shows that the construction boom in single-family homes during the housing bubble was centered in the suburbs, and the subsequent bust was particularly painful in many of those same suburban areas, according to Jed Kolko, economist for Trulia.
As for whether there is more of a post-housing bust switch to a preference for urban living in dense, walkable neighborhoods versus quiet, traditional suburbs, it’s vague.
The change in median price per square foot was a bit higher in urban neighborhoods (9.8%) than in suburban neighborhoods (9.4%).
Household growth, conversely, was higher in suburban neighborhoods (1.1%) than in urban neighborhoods (0.9%) over the past year.
“Suburbs can have faster household growth but smaller price gains because it’s easier to build new housing in suburbs than in dense urban neighborhoods, and new construction accommodates population growth while taking pressure off rising prices,” Kolko said.
As to why despite the apparent resurgence of interest in urban living, the suburbs have been growing faster, Kolk offers three reasons that you can read when you click below.