Here's why some believe COVID-19 could be boost to rural real estate markets
Could the fear of being infected by COVID-19 lead to a rural revival in real estate?
“You better believe it,” Shasta Association of Realtors president Cindy Young said when asked if she thinks urban flight could boost the local housing market. “As a matter of fact, we did our first Zoom meeting with our members and we mentioned that very thing.”
Nobody knows the impact the coronavirus pandemic will have on the real estate market, but speculation abounds.
Jordan Levine, deputy chief economist with the California Association of Realtors, told the Record Searchlight in April the medium- to long-term real estate recovery from the coronavirus pandemic could favor rural communities over larger metropolitan areas.
"And you have those markets where housing is more affordable, but overlay on top of that that businesses are realizing production can be maintained with a remote workforce," Levine said.
It could come down to a quality-of-life issue for working families.
"Having the option to not have a commute of an hour or two versus home ownership where homes are more affordable could well benefit rural areas," Levine said.
It’s been more than two months since Gov. Gavin Newsom issued a stay-home order and shut down all but essential businesses in the state. Some of restrictions have loosened, and real estate for much of the pandemic has been deemed essential.
“I have been super busy since right before the whole COVID situation started,” Sandy Dole of Vista Real Estate in Redding said. “Once we were deemed essential, my business just continued, and I am over what I did last year at this time.”
April sales numbers gave the first full picture of how the health crisis is affecting real estate. Sales of existing homes across the state were down 25.6% from March and 30% from a year ago, the California Association of Realtors reported. Statewide, home values were relatively flat compared to a month ago and a year ago.
“As expected, California home sales experienced the worst month-to-month sales decline in more than four decades as the coronavirus pandemic prompted stay-at-home orders, which kept both buyers and sellers on the sidelines,” California Association President Jeanne Radsick said in a news release.
She said the market is expected to remain sluggish for at least the next couple of months.
Beyond that is anybody’s guess.
However, CAR’s April sales report shows that not all parts of the state suffered declines.
In fact, the median year-over-year sales price in Siskiyou County jumped nearly 25%, the largest increase of the 51 counties tracked by trade group.
Still, sales in Siskiyou County in April plunged more than 35% compared with a year ago.
In other parts of far Northern California:
- Home sales in Shasta County in April increased 5% from, but they were down about 15% from April 2019, the California Association of Realtors said.
- In Tehama County, home sales in April were flat from March, but were down nearly 22% from a year ago.
- In Butte County, home sales in April also were flat from March, but were down 12% from a year ago.
Sonoma State University Economist Robert Eyler notes that real estate market tracker Zillow is relatively bullish on the future of real estate.
“If you think about California, one of the things we might see is some out-migration from the cities toward suburban and rural, with the idea that people want to take their job and go someplace that’s less urban, they want to get out of an ... area where the probability of infection is higher,” Eyler said during one of his “Ask the Economist” webinars he’s hosted since the pandemic hit.
However, Eyler said much will still depend on where the jobs are, and if home builders feel confident enough to keep building.
Certainly, in areas like Shasta County, construction remains strong amid COVID-19 as the momentum from rebuilding after the 2018 Carr Fire continues.
Housing starts in Redding through April were up 16% compared with a year ago.
“We are in a housing crisis,” Palomar Builders of Redding co-owner Jeb Allen said. “And that is not going to go away no matter what the issue.”
David Benda covers business, development and anything else that comes up for the USA TODAY Network in Redding. He also writes the weekly "Buzz on the Street" column. He’s part of a team of dedicated reporters that investigate wrongdoing, cover breaking news and tell other stories about your community. Reach him on Twitter @DavidBenda_RS or by phone at 1-530-225-8219. To support and sustain this work, please subscribe today.