Is Your Housing Market a ‘Zoom Town’?
The “Zoom Town” nickname applies to hot growth areas – generally just outside existing suburbs – being considered by buyers who no longer have to commute.
NEW YORK – “Zoom town” is the new nickname for housing markets that are suddenly booming as remote work takes off. NPR’s Planet Money coined the term as more Americans, no longer bound by a commute during the pandemic, consider semi-country locations that may have once posed a commuting problem.
It’s not just housing prices and commute times, however. They’re also fleeing crowded urban areas for more space to spread out, and some are even eyeing traditional vacation communities to for their permanent residences.
The trend might even help mitigate rising home prices in the areas they’re leaving behind.
“Remote workers are craving more space, privacy and tranquility as well as convenient opportunities to spend time outdoors and get closer to nature,” Irene S. Levine writes in a recent Forbes.com article. “Although interest in zoom towns has been primarily fueled by millennials, the desire to move is also being felt acutely by families living in close quarters whose children are now learning remotely at home.”
Areas like Lake Tahoe, Nev., the Hamptons on Long Island, N.Y., and Bend, Ore., are pointed to as examples of “zoom towns,” which home prices are now escalating as new residents compete for a limited supply of homes for sale. In the Hamptons, home prices increased by 25% year-to-year, while Lake Tahoe prices rose 50% from their low point this spring.
Bloomberg reports that beach and mountain towns often draw many tourists, in part because jobs were limited – but more people can now relocate to these areas and telecommute. The trend potentially reshape some of these smaller towns.
“If virtual work holds the promise of a new wave of migration the way air conditioning allowed the Sun Belt to boom, a significant constraint is going to be how much these communities are willing and able to grow,” Bloomberg reports.
However, topography and community resistance could stymie growth, and some housing analysts say the homebuying spree in zoom towns could be temporary. Today’s bargain home prices could climb over the next 12 to 24 months, for example, as pandemic buyers bid for limited housing supply, and those higher prices could eventually stifle demand. And the reopening of offices in traditional job hubs could make these moves temporary.
“These trends probably will become clearer in the next year or two,” writes Conor Sen for Bloomberg. “We have already seen cities such as Portland, Ore., Denver, Austin, Texas and Nashville, Tenn., benefit from knowledge jobs being pushed out of costly coastal hubs. It now seems likely that there will be a new group of winners such as Truckee [in California] and Missoula [in Montana] amid the shift to virtual work, transforming their housing markets and local economies forever.”
Source: “Zoom Towns: Why Your Last Vacation Getaway May Be Your Next Home,” Forbes.com (Sept. 15, 2020) and “Booming ‘Zoom Towns’ Should Ease City Housing Costs,” Bloomberg (Aug. 5, 2020)
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