Covid19 has accelerated housing trends that we were already seeing among successful individuals and families, and in many cases has changed how and where they plan to live in the future. Chubb Insurance recently conducted a survey of over 600 homeowners in North America with incomes over $250,000 during the months October-November 2020 in collaboration will a leading expert in the field, Bill Fulton of the Kinder Institute, to develop a perspective on there macro short-and long-term trends. Here are some key takeaways from the study:
- While successful individuals and families were moving out of big cities into suburbs and smaller cities before the pandemic, Covid19 has accelerated this trend.
- Key trends based on region are emerging, as we see greater migration from some areas more than others, specifically in the largest populated cities.
- Successful individuals and families in many cases now have different priorities in terms of neighborhood and home features, due to recent changes in their living and working situations.
As noted in the research, two times as many successful individuals in 2020 considered moving or have moved to a newly purchase home compared to the general population in 2019. This trend is driven by moves in California and New York, where 25% were moving compared to 15% in the rest of North America, which is 67% more moves than in the general population. Changes have been happening in cities for a while due to rising housing costs and more flexibility for tech workers to work remotely. Now, this is exacerbated by Covid19, with even more people working from home. Towards the second half of the past decade people have moving form larger cities to smaller ones, causing growth in the largest cities decline. Us cities with a population of over 1 million had an 88% decline in growth rate 2010-2018. Small to medium cities with a population of under 1 million, however, had a 47% increase in growth rate over larger cities for the same period. In California, the most notable example of this smaller city migration was Santa Barbara, with a growth spike in 2020 of 124%.
When successful people were asked what priorities the have when they move, 63% responded "to live near a grocery store", 85% "to be close to work", and 71% "to have a safe yard for the family". If not moving, they were asked how they would think differently about their homes. 64% "plan to do renovations to their home", 70% "are more likely to age in place" meaning that they need help in making their home accessible, and 55% said it was important to have live-in help. Top upgrades being considered: additions, air filter upgrades, new home office equipment, new playset, and high-end entertainment systems.
What can we expect to see long term? More people will continue to work from home. Office leasing is expected to drop 10-15%. Smaller cities will continue to grow and develop, and those moving to the suburbs will expect city like amenities. One thing is certain: the pandemic will have a lasting affect on the way we live and work for years to come.