Zillow Market Pulse: September 28, 2020

September 28, 2020

The incomes and overall wealth of lower-income families were growing strongly before the pandemic hit. The American spirit of entrepreneurship is strong, even as small businesses struggle. And mortgage forbearance rates continue to steadily decline.

From 2016-2019, lower-income households experienced disproportionately strong gains in income and wealth gains

• Median family income rose 5% from 2016 to 2019, according to the Federal Reserve's 2019 Survey of Consumer Finances.
• Median family net worth grew 18% in those three years, according to the report, but average family net worth rose just 2% — suggesting overall gains were driven by lower-income families.

New business applications are up, even as small businesses continue to suffer

• 3.2 million new business applications have been filed so far this year, according to the U.S. Census Bureau, 500,000 more than this time last year.
• 1.1 million of those are companies likely to be employers.

Mortgage forbearance participation continues fall

• 3.6 million loans were receiving payment relief as of September 20, according to Black Knight, down 24% from highs earlier in the spring.
• Elevated levels of private loans do offer some cause for concern.

So what? 

Home price appreciation, a strong stock market and a high savings rate all helped propel median family income up 5% and median family wealth up 18% from 2016 to 2019, according to The Federal Reserve's 2019 Survey of Consumer Finances. On a percentage basis, the income and wealth gains in that period were felt most prominently by lower-income families, a sign that a broadly rising economic tide was truly helping lift all boats. That said, the report – released every three years and viewed as the benchmark measure of household financial well-being – made clear that income inequality persists and remains a significant challenge. The top 1% of households in the U.S. owned about 40% of the nation's wealth, while families in the bottom half of the wealth distribution owned just 2%. And the report offered some warning signs for an emerging economic recovery that is still in its infancy. The wealth and income improvements experienced by lower-income families – many of whom have since likely been harder-hit by the pandemic – took far too long to realize, unfolding over the course of about a decade after the end of the last recession. As this most-recent recovery slowly gains steam, a similar timetable for broad-based gains for so many people would be disastrous and would almost certainly exacerbate income inequality. Avoiding this trend is a key reason why the Federal Reserve adjusted its policy framework this summer to allow inflation to run above its 2% target before hiking rates, theoretically allowing for more hiring and stronger wage growth earlier in the recovery than before.

The economic downturn has been devastating for the nation's small businesses, but the spirit of American entrepreneurship is nevertheless alive and well. Some 3.2 million new business applications have been filed so far this year according to the U.S. Census Bureau, up 500,000 from the same period in 2019. And roughly a third of those applications (1.1 million) of those applications say they plan to employ people, up 12% from this point in 2019 and the highest level since 2007. The optimism is notable, but the data show that the small business sector is struggling mightily. As of mid-September, revenue at small businesses was down 21% from January levels, and the rate of recovery has stalled in recent months. Business closures increased by 23% from mid-July to late-August, according to a recent report from Yelp — closures which may have partly stoked the uptick in applications, as laid off employees decided to strike out on their own. The increased activity may also suggest that some entrepreneurs are seeing consumer preferences and tendencies changing due to the pandemic in ways that they can take better advantage of than with older business models. No matter the reason, rising new business applications are a good sign for the economy, now and going forward. New businesses are crucial for job creation – according to the Census Bureau, firms with fewer than 500 workers accounted for more than half of all private sector employment as of 2017.

Since peaking in late-May, participation in mortgage forbearance programs has steadily declined, defying many expectations for an increase following the expiration of enhanced jobless benefits. According to Black Knight, 3.6 million loans were in forbearance as of September 22, 1.17 million (24%) fewer than four months ago, echoing a similar recent report from the Mortgage Bankers Association. But while the reduction in share of loans receiving relief is a good sign for the market, some challenges persist. Forbearance requests from holders of FHA or VA loans have risen recently, along with the share of privately held loans receiving support. Elevated levels of private-label loans in forbearance are especially concerning, since repayment conditions for these loans are much less clear than they are on loans serviced by government entities. Still, the fact that forbearance rates haven't skyrocketed in recent months, as some had predicted, should be interpreted as a good sign for the economy.

Click here to read past editions of Zillow’s Market Pulse updates.

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Home Buyers Give Puerto Rico Another Look During Pandemic

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Sales of Puerto Rican luxury houses and condominiums are spiking during the pandemic, with buyers from New York, California and other higher-tax states embracing the island’s low-tax status.

Developers of luxury projects are reporting increasing sales volume and prices compared with 2019. The uptick comes despite years of natural disasters and financial and political upheavals that made many wary of buying property in Puerto Rico.

Residents of the territory—who must live there at least 183 days a year—pay a Puerto Rico income tax of up to 33% but no other federal or local income taxes. Many wealthy individuals also are exempt from taxes on interest, dividends and certain capital gains.

Some U.S. cities or states, where some people already pay over 40% in income taxes, might raise taxes further to cover budget shortfalls. New Jersey Gov. Philip Murphy reached a deal this month with legislative leaders to increase taxes on incomes over $1 million. Opponents of that “millionaires tax” have said it would trigger an exodus of wealthy people from the state.

“As awful as the [pandemic] is, it breathes new life into the Puerto Rican economy,” said Rodrick Miller, chief executive of Invest Puerto Rico, a not-for-profit organization trying to attract business investment.

While up-to-date residential sales figures for the island overall aren’t available, developers of high-end projects report brisk business in recent months. The St. Regis Bahia Beach Resort, a high-end hotel and residential project developed by hedge-fund manager John Paulson, has made 34 sales of condominiums and home lots since the pandemic hit. That compares with 20 sales during the same time frame in 2019, according to Fahad Ghaffar, Mr. Paulson’s partner in Puerto Rico.

The average price of a beachfront condo has increased to $1,360 a square foot from $1,000 a year ago. “We’ve had a closing with a Zoom buyer that purchased a $5.4 million penthouse that hasn’t even been here,” he said, referring to the popular videoconferencing platform.

Demand also has been strong at the Dorado Beach resort. Developer CPG Real Estate LLC has signed 46 contracts for homes in The Isles, one of the resort’s new phases, with prices in the $1.9 million to $4 million range, according to Kenneth Blatt, a principal.

Most of the sales were signed after the pandemic hit. Buyers from the mainland are seeking low taxes while those from San Juan are seeking the open spaces and lower density of the gated community.

“It’s not dissimilar from what you’re seeing with people leaving New York for Westchester and Greenwich,” Mr. Blatt said.

Puerto Rico still hasn’t recovered from its own budget problems and Hurricane Maria in 2017. But rebuilding efforts were stoked earlier this month when President Trump said he was releasing $13 billion to rebuild the island’s electrical grid and schools.

The U.S. territory also is pressing hard to attract remote workers and businesses that face prolonged and uncertain returns to their traditional offices. Invest Puerto Rico has beefed up its outreach efforts to educate remote workers about the island’s tax incentives.

“In this Covid[-19] environment, [remote workers] can’t go to all the places that they used to because they’re not open to the U.S.,” Mr. Miller said.

These efforts are helping bring failed Puerto Rican residential developments back to life. Mr. Ghaffar said that he and Mr. Paulson in 2016 purchased 150 units of a failed project in the Palmas del Mar Resort on the island’s east coast that targeted middle market buyers. “We were selling about 10 per year and this year we sold over 28 units,” he said.

The demand also has encouraged some developers to plan groundbreakings on their first new Puerto Rican projects in years. Royal Palm Cos. plans to announce two branded resorts next year including a total of 95 residences on the island’s northeast coast, with prices for three-bedroom units starting in the $1 million to $2 million range.

The venture has changed its plans to increase the number of residences because of the pandemic. “It made sense because of the demand for residential now,” said Daniel Kodsi, chief executive of Royal Palm. “The primary driver right now in Puerto Rico is taxes.”

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July Case-Shiller Results and August Forecast: Pushing Decisively Higher

• The S&P CoreLogic Case-Shiller U.S. National Home Price Index® rose 4.8% year-over-year in July (non-seasonally adjusted), up from 4.3% in June.
• Annual growth was up from June in the smaller 20-city index (to 3.9%, from 3.5%) and 10-city index (to 3.3% from 2.8%).
• Phoenix (+9.2%), Seattle (+7%), and Charlotte (+6%) reported the highest year-over-year gains among markets in the 19-city index (Detroit was excluded from the 20-city index this month).

Home prices continued to push pandemic-related uncertainties aside and reach new heights into the summer months, as demand for housing outpaced supply.

The national Case-Shiller Home Price Index rose 4.8% year-over-year in July. The smaller 10- and 20-city composite indices grew more slowly, at 3.3% and 3.9% year-over-year, respectively. The annual rate of growth was faster in July than in June in all three main indices. On a monthly (seasonally adjusted) basis, the 10-city index was up 0.5%, the 20-city index was up 0.6% and the national index was up 0.4% from June.

	Zillow Forecast, Released 8/25/20	Actual Case-Shiller Indices, Released 9/29/20	Historical Median Absolute Error*
10-City Composite, Month-Over-Month (SA)	0.0%	0.5%	0.2%
10-City Composite, Year-Over-Year (NSA)	2.9%	3.3%	0.2%
20-City Composite, Month-Over-Month (SA)	0.1%	0.6%	0.2%
20-City Composite, Year-Over-Year (NSA)	3.6%	3.9%	0.1%
U.S. National Month-Over-Month (SA)	0.2%	0.4%	0.1%
U.S. National Year-Over-Year (NSA)	4.4%	4.8%	0.1%
*Calculation of Median Absolute Errors are based on Zillow’s forecasts dating to 2011.  The national Case-Shiller forecasts began in 2014.

An unprecedented lack of for-sale homes combined with persistently low mortgage rates have stoked a competition for housing in recent months that will not relent. Sales volume has held firm at a time when it would normally show signs of cooling, and home prices continue to push decisively higher. The question now is how much longer this will continue. While coronavirus-related developments will dictate the path forward for the economy, thus far, the housing market has withstood basically every obstacle that the pandemic has thrown its way, and home prices have grown without restriction. With mortgage rates poised to remain low for the near future, barring a sudden surge in inventory, it appears that upward price pressures should endure into the fall.

Annual growth in August as reported by Case-Shiller is expected to accelerate in all three main indices. S&P Dow Jones Indices is expected to release data for the August S&P CoreLogic Case-Shiller Indices on Tuesday, October 27.

Index	Actual July Case-Shiller Change	Zillow’s Forecast for the Case-Shiller August Indices
10-City Composite, Month-Over-Month (SA)	0.5%	0.4%
10-City Composite, Year-Over-Year (NSA)	3.3%	3.9%
20-City Composite, Month-Over-Month (SA)	0.6%	0.4%
20-City Composite, Year-Over-Year (NSA)	3.9%	4.5%
U.S. National Month-Over-Month (SA)	0.4%	0.4%
U.S. National Year-Over-Year (NSA)	4.8%	5.3%

Note: Case-Shiller and Case-Shiller Index are registered trademarks of CoreLogic Solutions, LLC. The statements herein are not endorsed by or provided in association or connection with CoreLogic, LLC.

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Zillow Market Pulse: September 25, 2020

September 25, 2020

Sales of new homes continued their remarkably strong stretch. But labor market strife continues: Pay cuts once deemed temporary are now becoming more permanent, and more than 20 million people likely remain out of work due to the pandemic.

New home sales surged in August

• Sales of new homes rose to 1.01 million (SAAR) in August, up 4.8% from July.
• It was the first time the series exceeded 1 million since 2006.

Like job cuts, pay cuts also becoming more permanent

• According to Pew Research, 60% of workers who have received a pay cut are still earning less now than they were pre-pandemic.
• Only about a third (34%) are back to their pre-pandemic wage.

The true number of workers suffering from pandemic job losses is difficult to calculate

• 1.5 million claims for jobless benefits were filed last week, and about 28 million workers are either receiving benefits or have recently applied.
• The real number of workers who are out of work due to the pandemic is likely closer to 21 million.

So what? 

New home sales increased in August to their highest level in more than a decade, continuing the housing market's torrid stretch of remarkable gains. More new homes were sold through August in 2020 than in any year since 2007, and the last time the market exceeded 1 million sales in a month (at an annualized rate) was in 2006. There's no question that homebuyer demand remains firm – applications for home purchase loans continue to rise, homebuilder confidence is at record highs and homes are selling at a remarkably fast rate. But questions around the potential durability of this strength may be starting to creep in. Inventory fell at its fastest annual rate since 2012 in August, and while homebuilders appear determined to fill the void, volatile lumber prices and logistical difficulties brought upon by the pandemic are making that challenging. Of course, pandemic-related factors and the recovery of the broader economy will also factor into sales volume in the coming months and year. So, while August's new home sales data was another resounding win for a soaring market, but it does offer some hints of the potential headwinds to come. 

Most recent discussions around the state of the labor market have centered on the slowing recovery and the fact that job losses that previously deemed temporary are now becoming permanent. A report from Pew Research this week added another layer to the narrative, suggesting that the move from temporary to permanent is also applying to pay cuts. Three-fifths of workers who have remained on a payroll but taken a pay cut are still earning less now than they were before the pandemic, compared to just a third (34%) who have returned to their pre-pandemic wage. About a third of adults said that someone in their household has had their wages cut as a result of the pandemic, with younger and lower-income households experiencing a higher rate. These households tend to have much smaller safety nets, making the impact of a pay cut far greater than it might be for higher-earning households. The report found that 46% of lower-income adults have had trouble paying bills in the last six months, with 44% of them saying they have had to tap into savings or retirement funds in order to meet those obligations. Even as the job market continues to recover — however slowly — many U.S. households, including those who have maintained employment, continue to suffer severe financial hardship.

Another 1.5 million claims for unemployment insurance were filed last week, about the same as the week before and the 27th straight week where initial claims greatly exceeded even the worst week of the Great Recession. Altogether, 28.4 million initial and continued claims for jobless benefits were filed last week. In normal times, this figure would represent the number of workers in need of aid, but it's important to note that the number of claims being filed is likely overstated. The gap between the number of people reportedly receiving aid and the number of people deemed unemployed in the official monthly report has ballooned recently – in August, the gap was about 15 million. The short answer for why this is is that claims numbers are likely overstated while the unemployment figures are understated. Delays in the processing of jobless claim applications ultimately lead to some claims being double counted. And the headline unemployment figures in the official jobs report fail to include those who are "employed but not at work" and those who left the labor force due to the pandemic. Taken together, the real number of people who are either unemployed or otherwise out of a job because of the pandemic is likely closer to 21 million, not including those who have seen their wages cut. Next week's September jobs report will offer more insight into the state of the labor market and the health of its recovery.  

Click here to read past editions of Zillow’s Market Pulse updates.

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Homeowners Could Save Thousands by Refinancing at Today's Ultra-Low Mortgage Rates

Owners of the typical U.S. home that currently have a mortgage interest rate pegged to year-ago levels could save almost $30,000 over the course of a 30-year loan by refinancing at today's much-lower rates.

 The monthly mortgage cost on the typical U.S. home, worth $256,663 in August, would be $951 with a 3.75% mortgage rate, near where rates were a year ago. But with a 3.02% rate, that monthly payment (principal and interest only) drops to $868, which adds up to annual savings of almost $1,000. Over the lifetime of a 30-year loan, the difference between a 3.75% rate and a 3.02% rate (the average rate for a 30-year fixed-rate mortgage on Zillow Mortgages on September 22, 2020) comes out to a shade less than $30,000 ($29,880). Well-qualified borrowers may even be able to secure a rate less than 3%, potentially saving them even more.

One effect of the coronavirus pandemic on the U.S. economy has been persistently low interest rates. The Federal Reserve lowered key benchmark interest rates to near 0% in March to help bolster the national economy, and shows no sign of raising them. As a result, mortgage rates, which generally follow bond yields and other key rates, have lingered near historic lows. 

And because mortgage payments are based on the price of the home loan, homeowners in pricier markets could see savings of hundreds of dollars each month by refinancing to a lower mortgage rate. In the San Francisco and San Jose metros, where the typical home is worth more than $1 million, the annual savings from a 3.02% rate instead of a 3.75% rate is more than $4,300. For buyers currently struggling with low inventory and rising home prices, low rates could offer an opportunity to stretch their budgets while still keeping monthly payments manageable — potentially opening up more/different areas to consider that might have been out-of-budget at a higher rate. 

Refinancing does come with additional fees, so homeowners with smaller loans may not benefit from the current low rates unless their current rate is significantly higher. For example, in El Paso, Texas (where the typical home was valued at $140,161 in August, well below the national figure), the difference in monthly mortgage payments on the typical home with a 3.75% mortgage rate and 3.02% mortgage rate is only $45. 

And refinancing sooner rather than later may also result in more savings. Beginning Dec. 1, government-sponsored mortgage giants Fannie Mae and Freddie Mac will begin charging a so-called "adverse market fee" equivalent to 0.5% of the outstanding loan amount on many (but not all) refinanced mortgages. This fee, intended to protect the firms from pandemic-related risk and uncertainty, will total about $1,400 on the typical loan, according to the Mortgage Bankers Association.

Metro Area	Typical Home Value in August	Monthly Payment with a 3.75%  Rate*	Monthly Payment with a 3.02% Rate	Annual Payment with a 3.75% Rate	Annual Payment with a 3.02% Rate
United States	$256,663	$951	$868	$11,412	$10,416
New York, NY	$493,579	$1,829	$1,669	$21,948	$20,028
Los Angeles-Long Beach-Anaheim, CA	$706,714	$2,618	$2,390	$31,416	$28,680
Chicago, IL	$246,357	$913	$833	$10,956	$9,996
Dallas-Fort Worth, TX	$261,739	$970	$885	$11,640	$10,620
Philadelphia, PA	$262,437	$972	$887	$11,664	$10,644
Houston, TX	$222,936	$826	$754	$9,912	$9,048
Washington, DC	$452,030	$1,675	$1,529	$20,100	$18,348
Miami-Fort Lauderdale, FL	$310,471	$1,150	$1,050	$13,800	$12,600
Atlanta, GA	$251,454	$932	$850	$11,184	$10,200
Boston, MA	$514,321	$1,906	$1,739	$22,872	$20,868
San Francisco, CA	$1,127,066	$4,176	$3,811	$50,112	$45,732
Detroit, MI	$188,420	$698	$637	$8,376	$7,644
Riverside, CA	$400,664	$1,484	$1,355	$17,808	$16,260
Phoenix, AZ	$312,317	$1,157	$1,056	$13,884	$12,672
Seattle, WA	$559,226	$2,072	$1,891	$24,864	$22,692
Minneapolis-St Paul, MN	$305,202	$1,131	$1,032	$13,572	$12,384
San Diego, CA	$643,903	$2,386	$2,177	$28,632	$26,124
St. Louis, MO	$187,795	$696	$635	$8,352	$7,620
Tampa, FL	$242,924	$900	$821	$10,800	$9,852
Baltimore, MD	$302,464	$1,121	$1,023	$13,452	$12,276
Denver, CO	$458,600	$1,699	$1,551	$20,388	$18,612
Pittsburgh, PA	$167,172	$619	$565	$7,428	$6,780
Portland, OR	$429,608	$1,592	$1,453	$19,104	$17,436
Charlotte, NC	$249,960	$926	$845	$11,112	$10,140
Sacramento, CA	$444,733	$1,648	$1,504	$19,776	$18,048
San Antonio, TX	$211,964	$785	$717	$9,420	$8,604
Orlando, FL	$266,005	$986	$899	$11,832	$10,788
Cincinnati, OH	$197,135	$730	$667	$8,760	$8,004
Cleveland, OH	$168,298	$624	$569	$7,488	$6,828
Kansas City, MO	$214,639	$795	$726	$9,540	$8,712
Las Vegas, NV	$302,071	$1,119	$1,021	$13,428	$12,252
Columbus, OH	$222,467	$824	$752	$9,888	$9,024
Indianapolis, IN	$192,677	$714	$652	$8,568	$7,824
San Jose, CA	$1,224,366	$4,536	$4,140	$54,432	$49,680
Austin, TX	$357,346	$1,324	$1,208	$15,888	$14,496
Virginia Beach, VA	$252,041	$934	$852	$11,208	$10,224
Nashville, TN	$289,792	$1,074	$980	$12,888	$11,760
Providence, RI	$333,191	$1,234	$1,127	$14,808	$13,524
Milwaukee, WI	$212,166	$786	$717	$9,432	$8,604
Jacksonville, FL	$240,785	$892	$814	$10,704	$9,768
Memphis, TN	$164,254	$609	$555	$7,308	$6,660
Oklahoma City, OK	$165,014	$611	$558	$7,332	$6,696
Louisville-Jefferson County, KY	$189,706	$703	$641	$8,436	$7,692
Hartford, CT	$246,821	$914	$835	$10,968	$10,020
Richmond, VA	$256,417	$950	$867	$11,400	$10,404
New Orleans, LA	$215,218	$797	$728	$9,564	$8,736
Buffalo, NY	$183,071	$678	$619	$8,136	$7,428
Raleigh, NC	$292,160	$1,082	$988	$12,984	$11,856
Birmingham, AL	$174,875	$648	$591	$7,776	$7,092
Salt Lake City, UT	$405,189	$1,501	$1,370	$18,012	$16,440

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Strangest COVID-19 Side Effect to Date: Real Estate ‘Quarandreams’

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Here’s one of the weirdest side effects of the coronavirus pandemic that we’ve heard of so far: People around the world are experiencing a rash of bizarrely vivid quarantine dreams while sleeping, called “quarandreams.” And surprisingly often, these weirdly intense sleep visions are all about real estate.

Sleep experts and dream analysts agree that the rise of quarandreams is not surprising, given that many are under a lot more stress than usual, combined with the fact that it’s simply easier to remember dreams when there is less noise outside to wake us up mid-sleep cycle.

But why are so many of these pandemic dreams centering on homes?

Psychoanalysts dating to Carl Jung have traditionally viewed the house as a representation of the self. So what are these quarandreams trying to tell you? Is it time to relocate to the burbs, or upgrade to a bigger house?

“Dreams provide an entryway to the private discussions we are having with ourselves,” says dream analyst Layne Dalfen, author of “Have a Great Dream: Decoding Your Dreams to Discover Your Full Potential.”

To help point you toward what your own dream subtext might be saying, here are some of the most common real estate quarandreams that crop up, and some interpretations on what they mean.

Dreaming of your childhood home

If the home you grew up in suddenly appears in your dreams—e.g., you’re 5 years old again playing ball in the backyard, or revisiting your childhood house as an adult—it typically means one of two things. Since a house is often a representation of your current emotional state, it may mean you’re either wishing to go back to memories of that time, or experiencing feelings associated with it.

For example, if the home of your youth was a happy place, you may be dreaming about it because you’re craving that feeling of security again—which would make sense during a pandemic. Conversely, if you hated your childhood, then the current COVID-19 confinement could be stirring up memories of how you wanted to flee the situation (which, of course, could tie in with how you’d like to escape this pandemic).

Dreaming of living in a mansion

Nighttime reveries of living in a palatial estate may seem to have an obvious subtext: You wished you were wealthier and could afford some posh digs, right?

Yet Dalfen suggests interpreting this less literally. For example, the mansion symbolizes some “splurge” you’ve been denied perhaps due to the pandemic.  

“This dream is encouraging action,” says Dalfen. “Do something to remedy how you are feeling.” Even if fulfilling your wish in its current form isn’t advisable, find another way to scratch that itch (e.g., rather than cooking your umpteenth dinner, treat yourself to takeout from a fancy restaurant once in a while). 

Dreaming of living in a tiny, cluttered house

If your dream has you wedged in a cramped, cluttered house, it may be tempting to take this at face value that your home just doesn’t have enough space. But on a less literal level, it could represent that you’re feeling trapped—in your house, career, relationships, or otherwise.

“Dreams speak in the language of metaphor, so the feelings of being closed in on could be your unconscious mind creating a dream scenario in which you are inspired to break out,” says Dalfen. 

It could also indicate that you’ve been keeping quiet about your frustrations. If, in the dream, you start cleaning up the mess or somehow decluttering, it could be your unconscious mind encouraging you to speak up about what’s bothering you to the family members or friends who might be cramping your style.

Dreaming of renovating your home

This dream probably has nothing to do with your desire to make over your kitchen, but everything to do with the need to embark on self-improvement in other areas of your life—perhaps a battle cry to shed those dreaded “COVID-19” pounds you’ve put on, or to reconnect with friends rather than vegging out in front of your TV.

One thing to pay attention to with this kind of dream is repetition. If you keep dreaming of renovating your home over and over and over, is it always the same room? Are the results successful?

“The repeating we do in dreams is our unconscious way of being sure you get the message you are sending yourself,” says Dalfen. 

Dreaming your house is filled with bugs or other pests

If you have nightmares of creepy-crawlies infesting your house, it’s a classic sign that you and your home’s inhabitants (be it a partner, roommate, or kids) are spending too much time together—giving your unconscious mind the sensation that they’re crawling all over you.

“This is a fabulous example of play on words and how we use them in our sleep as much as we do in waking life,” says Dalfen. In other words, if your kids are “on top of you” 24/7, your brain is saying it’s time to take a break!

Dreaming about losing the keys to your house

Dreams about keys often have to do with needing access. So if you’re dreaming about losing your keys or being locked out of your home, it could mean there’s someone you’re trying to “get through to”—like a busy boss or flaky friend—but you can’t “get in.” This dream could be prodding you to try a different tactic (i.e., key) to get a different result.

This is also a perfect analogy for quarandream analysis in general: If none of these scenarios we’ve laid out quite fits the real estate dreams you are having, try a different approach.

“Analyzing your dream and pinpointing the specific situation in your life that triggered it is like doing a puzzle.” says Dalfen. “You’ll try one piece—and if it doesn’t fit, you try another.”

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These 9 Homes With Indoor Pools Make a Splash No Matter the Weather

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Fall is officially here, and outdoor pool season is winding down for large swaths of the country.

With public pools closed in most of the country this summer, folks were desperate for any sort of aquatic relief. Interest in above-ground pools, plunge pools, and stock tank pools all spiked as homeowners sought to beat the heat in their own backyard.

But for a select few, swimming pool season is year-round—and it never means having to dip a toe outside the confines of the house. For homeowners lucky enough to possess an indoor pool, practicing laps or simply dog paddling in the shallow end can take place any time of year.

And your own personal natatorium can be a reality! We’ve found nine homes with indoor pools for sale right now—so we invite you to wade on in.

Of course, this amenity doesn’t come cheap. Most of the homes we spotted come with price tags over a million bucks. For buyers with the cash to splash out, these homes present an intriguing opportunity. For those on a smaller budget, use these nine examples as inspiration for your own chlorine-soaked fantasies.

20 Southland Ave, Greenville, SC

Price: $2,000,000
Making a splash in South Carolina: Marketed as “one of Greenville’s finest homes,” this five-bedroom mansion has a classic exterior. However, we’re more interested in the glorious pool. Located in a structure with skylights and abundant windows, the pool is bathed in natural light. After you’re done taking a dip, you can warm up in the hot tub or sun yourself in the adjacent courtyard area.

Greenville, SC

realtor.com

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8001 Oak St, Arvada, CO

Price: $740,000
Rocking retro vibes: Colorado’s already experienced its first winter snow, and it’s not even November. So an indoor pool in the Rocky Mountain State is the perfect hedge against frosty climes. This amoeba-shaped pool is attached to a five-bedroom home built in 1969. We adore the wood paneling on the walls and ceiling. Sliding doors next to the pool mean the area can easily open to the outdoors during warmer summer months. After you’re done cannonballing, prepare yourself a highball at the home’s wet bar.

Arvada, CO

realtor.com

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10 Bowie Pl, Colts Neck, NJ

Price: $2,149,000
Natatorium in New Jersey: This four-bedroom home is said to be inspired by legendary architect Frank Lloyd Wright. While Wright was a fan of incorporating natural elements into his organic designs, we’re not sure if he ever drew up a place with an indoor pool. The light-filled pool room echoes the rest of the home, where windows and natural light are plentiful. Forget the shore, get your laps indoors!

Colts Neck, NJ

realtor.com

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9286 Falling Waters Dr E, Burr Ridge, IL

Price: $1,750,000
Bargain mansion included: This massive 11,000-square-foot mansion is priced at only $158 per square foot—half the price it sold for a decade ago. Plus there’s this pool! We’re not sold on the brick surrounding the pool and the Juliet balconies overlooking it, but it’s a place to splash around during the bitter Illinois winters.

Burr Ridge, IL

realtor.com

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27500 La Vida Real, Los Altos Hills, CA

Price: $39,998,000
Swanky in Silicon Valley: The priciest home with an indoor pool we’ve spotted sits in the hills overlooking Silicon Valley. The 21,000-square-foot residence also comes with a home theater and wine cellar. If you’d like to sip your favorite chardonnay while in the water, you can—the pool features a swim-up bar. And if you need to conduct business after a swim, the home is equipped with a spacious office space and conference room.

Los Altos Hills, CA

realtor.com

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1275 Silver Tip Ln, Evergreen, CO

Price: $6,500,000
The place for exercise: Besides an indoor pool, this Rocky Mountain mansion comes equipped with a tennis court and indoor gym. The wide deck surrounding the pool means there’s plenty of space to gather after taking a dip. An adjacent kitchen and bar area also means sustenance is never out of reach—which is crucial after a big workout.

Evergreen, CO

realtor.com

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95 Lane 242 Lks, Angola, IN

Price: $1,175,400
This pool needs TLC: This isn’t the prettiest pool we’ve ever seen, but we have a feeling it can be resuscitated. And the same goes for the rest of this Midwest masterpiece. This five-bedroom home in Indiana is a time capsule in need of a savvy buyer to unlock its ’70s-era charms. With a few key updates, this oval-shaped pool could provide a swingin’ great time for a new owner.

Angola, IN

realtor.com

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21811 Hillandale Dr, Elkhorn, NE

Price: $1,100,000
Natatorium in Nebraska: This four-bedroom home is filled with all sorts of modern design flourishes. In welcome contrast, the indoor pool area is simple and unadorned. Best of all? There’s a diving board! Practice your half-pike without ever setting foot outside your front door.

Elkhorn, NE

realtor.com

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612 Rivercrest Dr, McLean, VA

Price: $12,800,000
Diplomatic immunity? This castle just outside Washington, DC, emanates strong embassy vibes. Inside the 16,000-square-foot residence you’ll find large expanses of marble, columns aplenty, and plenty of other ornate details. The pristine pool area is surrounded by a large deck—ideal for an ambassador or attache to host fellow dignitaries.

McLean, VA

realtor.com

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Caution: A Housing Crisis Could Be Coming for These 10 Cities

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With no end in sight to the coronavirus pandemic and the job losses and financial pain the crisis has wrought, millions of U.S. homeowners are behind on their mortgage payments and struggling to hang on to their abodes.

First-time, minority, and lower-income homeowners are among those most at risk of losing their homes. About 17.4% of the roughly 8 million Federal Housing Administration mortgages, primarily made to these more vulnerable borrowers, were delinquent in August. Roughly 11.2% of FHA loans were seriously delinquent.

Put another way, that means about 1.4 million households are in danger of losing their homes if they can’t begin making their mortgage payments again in the near future. FHA loans cater to borrowers who often have lower credit scores and higher debt loads. These loans, whose required down payments are as low as 3.5% in many instances, made up about 15% of all mortgages in 2019.

Certain metropolitan areas are more at risk than others. Atlanta’s metro region has the highest number of delinquent mortgages, according to a recent analysis of federal mortgage data from the Housing Center at American Enterprise Institute, a right-leaning think tank based in Washington, DC. These late payments could eventually turn into foreclosures if the economy doesn’t turn around.

“FHA loans are the canary in the coal mine,” which could be signaling greater trouble ahead, says Tobias Peter, director of research for the housing center. “These are the loans that would be the first ones to go delinquent.”

Those with government mortgages are eligible for up to 12 months of mortgage forbearance, allowing them to postpone their payments. It’s unclear at this point whether the program will eventually be extended if the economy doesn’t improve.

In the Atlanta metro, more than 53,000 FHA loans are delinquent. (Metros include the main city and surrounding towns, suburbs, and smaller urban areas.) FHA loans make up about 21.2% of all mortgages in the Atlanta area.

The Houston metropolitan area had the second-highest number of delinquent FHA loans. It was followed by Chicago; Washington, DC; Dallas; Riverside, CA; Baltimore; San Antonio, TX; Orlando, FL; and Tampa, FL.

The late payments aren’t surprising as the nation had an 8.4% unemployment rate in August, according to the U.S. Bureau of Labor Statistics. Those working in food service, retail and tourism, and the hospitality and leisure industries suffered some of the highest job losses.

As of Sept. 22, roughly 3.6 million homeowners, making up about 6.8% of mortgages, were enrolled in forbearance programs as a result of the pandemic, according to Black Knight, a technology, data, and analytics company. That’s down 7% from the prior week.

Communities of color could be the most affected by another foreclosure crisis.

“The same neighborhoods that were hardest hit by foreclosures in ’06 and ’07 during the Great Recession are the same neighborhoods where we’re seeing these delinquencies spiking,” says Peter. “It’s very troublesome.”

If there is another rash of foreclosures in a particular neighborhood, it can spiral quickly, lowering property values for homeowners who never missed a payment.

However, no one knows just yet if there will be another full-fledged foreclosure crisis. The federal government could extend mortgage forbearance or the economy could improve.

“The real question is when all of the government benefits ends and we’re still in economic doldrums, that’s when we could see real trouble in the housing market,” says Peter. “But if the economy has recovered by then, people should be able to pay back their loans.”

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Zillow Market Pulse: September 23, 2020

September 23, 2020

Home sales activity continued its stellar run into August, and for-purchase mortgage application activity reached recent highs. But increased rates of business closures signal that broader portions of the economy continue to struggle.

Existing home sales continue to run hot…

• August existing home sales rose 2.4% from July and 10.5% from a year ago, to 6 million (SAAR), according to the National Association of Realtors, the highest level since December 2006.
• Total for-sale inventory fell 0.7% from July and 18.6% from August 2019.

…Applications for home purchase loans are also strong…

• The Mortgage Bankers Association's seasonally adjusted for-purchase mortgage applications index increased 3% in the week ending September 18.
•  The unadjusted index was up 25% from a year ago.

…But business closures accelerated in the late summer.

• Business closures increased 23% from mid-July to late August, according to a report from Yelp.
• As of late August. almost 60% of closures were deemed permanent.

So what? 

As the weather cools, the housing market is continuing to run incredibly hot, even in the face of the pandemic. Sales of existing homes last month topped an already strong July and were the strongest recorded in any August since 2006. Even with much of the economy on pause or operating at limited capacity, home shoppers are more than making up for time lost during the pandemic's initial months and are snatching up homes virtually as soon as they hit the market. Historically low mortgage interest rates are helping buyers stretch their budgets, keeping monthly payments low even as home price growth accelerates. And sales volumes might be even higher if record-low levels of inventory weren't working to throttle the market and prevent still more would-be buyers from finding the home that's right for them. Pent up demand that pushed delayed spring sales into the summer could be inflating recent numbers somewhat, but there's no question that demand for housing - high even before the pandemic - has stayed at a boil. Sales volume could begin to taper in late 2020, but given current conditions, it's unlikely to diminish too much.

For-purchase mortgage applications activity increased last week after a modest step back earlier in the month, adding even more evidence that buyer demand remains firm heading into the fall. The MBA's seasonally adjusted for-purchase mortgage activity index rose to a new recent high, notching its strongest showing in more than a decade. The reading and weekly improvement were probably inflated somewhat by the fact that Labor Day was as late as it could be this year, but the figures reaffirm that people are still eager to buy homes, even as inventory remains tight and price growth accelerates. Many parts of the broader economy are seeing their recoveries slow, but housing-related activity appears to be moving as close to full-steam-ahead as possible.

But even as the housing market continues to cruise, slowdowns in consumer activity and uncertainty regarding future aid packages have prompted a notable increase in small business closures in the last two months, according to Yelp. The number of businesses that were open on March 1 but marked as "Closed" on Yelp by late August has risen 23% from mid-July. The number of businesses that are permanently closed has increased by 31% over the same time. Almost 60% of closures as of August 31 were marked as permanent, up from 41% at the beginning of June. According to the report, closures are being felt heavily in the restaurant and retail industries, while home, local and professional services – including auto repair shops, landscaping companies and accountants – have weathered the storm much more successfully. There are also notable regional differences in closure rates across the country. In California, Hawaii and Nevada – three states that are reliant on tourism and hospitality – more than 9 out of every 1000 businesses have closed permanently since March. Absent additional aid for small businesses, and with consumer activity showing decelerating improvements, that rate could grow further in the coming months.

Click here to read past editions of Zillow’s Market Pulse updates.

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Hold My Beer! Condo Lined With Budweiser Cans Is This Week’s Most Popular Home

realtor.com

A Florida condo lined wall-to-wall with Budweiser cans crushed the competition this week. Guzzling down six times as many clicks as the runner-up, the aluminum-based work of outsider art is the week’s most popular home on realtor.com®.

Beer cans cover nearly every square foot of the condo—including the ceilings. And while a few empties strewn about do conspire to make a home messy, these strategically arranged cans create a masterwork.

You may not appreciate the artist’s chosen medium, but you must cheer one man’s devotion to a singular—if somewhat blurry—vision.

Sadly, the original owner of the place is now deceased, and the listing agent tells us that multiple offers on the $100,000 residence have come in.

The new owner now has an incentive to keep the cans right where they are.

Budweiser shared the listing photos on its Facebook page and has offered to keep the fridge stocked with beer—as long the condo buyer keeps the cans intact. How’s that for a deal sweetener?

Besides the suds-soaked condo, you also clicked on Derek Jeter‘s mansion on Tampa Bay, a pristine Palm Springs 1960s time capsule featured on Netflix, and a couple of historic mansions in the Midwest.

Fans of modern design must see an Illinois home built with a corrugated steel roof, which appears to float among the trees.

While we look for a coaster, we invite you to pop open your beverage of choice and scroll on down for a full look at this week’s most popular homes…

10. 1026 Ocean Blvd, Hampton, NH 

Price: $5,900,000

Why it’s here: Oceanfront in New Hampshire? Yep, a small southern slice of the Granite State faces out to the Atlantic Ocean. And this custom mansion takes full advantage of its oceanside location.

Highlights of the massive four-bedroom beach house include ocean views from almost every vantage point, a cherry-paneled library, and a cherrywood paneled elevator to shuttle folks to all three floors.

Outside, there’s a waterfront deck, lush landscaping, and access to a sandy beach.

Hampton, NH

realtor.com

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9. 17905 Hood Ave, Homewood, IL 

Price: $339,000

Why it’s here: This industrial mod glass-and-steel home was built in 1982 by the architect David Hovey. Perched high on a ridge and backing up to the Walton Preserve, it’s designed for communing with surrounding nature, thanks to its walls of windows.

Outside, the home features lush gardens and an ipe wood deck with swim spa. Inside, highlights of the two-bedroom home include a custom kitchen, as well as a master bedroom suite supported by steel columns, which feels like a treehouse.

Homewood, IL

realtor.com

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8. 54 Pleasant St, Unit 3, Concord, NH

Price: $498,000

Why it’s here: Here’s an option ideal for a buyer who loves the idea of a savvy church conversion and doesn’t feel like putting in the work. The former Sacred Heart Church—built in 1933—was recently converted into 10 luxury condo units, and this unit gets an amen from us.

Luxe interior touches of the two-bedroom residence include 9-foot ceilings with crown molding and hardwood floors.

A private patio caps off this modern unit in one of Concord’s most distinctive buildings. Quite apart from the holy vibes, it’s close to arts, culture, and shopping.

Concord, NH

realtor.com

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7. 3024 Pierce St, Sioux City, IA

Price: $189,000

Why it’s here: Family-friendly and waiting for a new owner, this four-bedroom home has it all. Namely space, a series of recent updates, and loads of potential.

The backyard has a new stamped-concrete patio, and the remodeled kitchen leads to a screened porch out back.

It’s the roomy front porch, though, that’s likely to attract a buyer, with visions of long, lazy afternoons.

Sioux City, IA

realtor.com

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6. 2581 Effingham Hwy, Sylvania, GA

Price: $599,000

Why it’s here: Built in 2017, this modern four-bedroom farmhouse offers 3,125 square feet of rustic and stylish space.

Inside, the home features signature farmhouse touches, like shiplap ceilings, exposed beams, and a large fireplace.

A bonus for a skittish buyer: The home also boasts a safe room! Outside living is lovely, with a large entertaining area including a fireplace, kitchen, and an outdoor shower.

Sylvania, GA

realtor.com

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5. 2055 S. Joshua Tree Pl, Palm Springs, CA

Price: $1,969,000

Why it’s here: Turnkey time-capsule alert! Built in 1969, this exquisite desert home is back on the market again, and has retained all of its period-appropriate fab furnishings and decor.

The home sits on a quarter acre in the Twin Palms neighborhood, and time has stood still in many of its rooms.

A few key updates to the kitchen and outdoor spaces were chronicled on the Netflix show “Stay Here.” For a buyer looking for a retro showpiece, this Palm Springs place has everything.

Palm Springs, CA

realtor.com

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4. 2102 Mount Vernon Ave, Toledo, OH

Price: $399,900

Why it’s here: A classic mansion for less than $400K. Make your way to Toledo! Stately and majestic, this 1928-built Tudor has been recently restored.

The six-bedroom home boasts a grand foyer, plaster ceilings, curved staircase, remodeled kitchen, and a sunroom with tile and hand-painted leaded glass doors.

For fun, there’s a basement with a billiard-room.

Toledo, OH

realtor.com

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3. 129 S. Granger St, Saginaw, MI

Price: $325,000

Why it’s here: Prestigious and historic, this five-bedroom home sits on a lot of more than half an acre in Heritage Square.

It was built in 1916, and its grand features include a mahogany library, two dining areas, a second-floor master suite with a corner office, and a third-floor ballroom.

Outside, the parklike grounds boast a patio, Victorian garden, and water fountain.

Saginaw, MI

realtor.com

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2. 58 Bahama Cir, Tampa, FL

Price: $29,000,000

Why it’s here: This All-Star waterfront mansion is being sold by the New York Yankees legend Derek Jeter. The estate has also recently hosted the NFL legend Tom Brady and his family, as they stylishly acclimate to the Tampa Bay area.

The massive custom mansion was built in 2011, on 345 feet of open bay. It’s the biggest waterfront property ever built on Davis Islands, and features a staggering 9,000 square feet of covered porches, as well as a dock with two boatlifts.

Inside, you’ll find a massive gourmet kitchen, wine cellar, theater, professional gym, and an au pair wing.

Tampa, FL

realtor.com

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1. 4707 Lucerne Lakes Blvd E., Apt 102, Lake Worth, FL

Price: $100,000

Why it’s here: For all you do, this Bud’s for you. In our understatement of the year: The now-deceased owner of this two-bedroom condo was a big fan of Budweiser beer.

He was such a steadfast devotee of the King of Beers that he lined the entirety of his home in Budweiser beer cans.

The only exception? The two bathrooms remain blissfully unadorned, which leaves the new owners at least a smidgen of space to put their own stamp on things.

Of course, the internet took notice of this project, and the listing was circulated far and wide on social media. If the new owner decides to keep the cans as is, Budweiser has committed to filling the fridge with beers for life.

Lake Worth, FL

realtor.com

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August 2020 Market Report and Zillow Weekly Market Report Through September 12

• U.S. home values grew to $256,663 in August, a 0.7% increase from July, the largest monthly increase since 2013.
• Low demand continues to push rents lower — typical U.S. rent dropped 0.3% from July to $1,771 in August, the biggest monthly decrease since 2017.
• Rapid sales further contracted inventory, which is now 29.4% lower than a year ago.

A months-long inventory shortage helped push the typical U.S. home value to $256,663 in August, up 0.7% from July — the biggest month-over-month increase in nearly seven years. Monthly home value growth accelerated last month in 48 of the 50 largest markets and was relatively constant in the other two (Birmingham, Ala. and Richmond, Va.).

Home values were up 5.1% in August compared to a year ago, the largest annual rise since March 2019. Markets with the highest year-over-year increases in home value were Phoenix (10.5%), San Jose (10.3%) and Seattle (9.2%). The smallest year-over-year gains in home values among major metros were seen in Chicago (1.9%), New York (2.3%) and San Francisco (2.7%).

Nationwide, demand continues to outpace supply. Homes continue to fly off the market at record pace and inventory is contracting, according to the most recent Zillow weekly housing market data. Listings' typical time on the market is 14 days, according to data for the week ending Sept. 12 — a full two weeks (14 days) faster than the year before. 

Looking forward, upward price pressure seems likely to continue at least through the fall, thanks to the large, cumulative deficit of inventory. Purchase demand is holding steady at high levels, reflected in strong pending sales data, perhaps due to delayed purchases from earlier this spring and summer. Given that the housing market typically begins to cool off by late August, this stable volume of sales looks even more impressive: pending sales were up a whopping 23.3% in the week ending September 12.

[1]
The Federal Reserve has said it expects to keep interest rates at near-zero through at least 2023, and allow periods of higher inflation, in an effort to revive the economy. This reinforces its commitment to keeping credit flowing using a broad policy toolkit including large-scale purchases of mortgage-backed securities. As such, there is little reason to expect mortgage rates to rise significantly any time soon, which should help keep buyers active.

But while the for-sale market has strengthened since April, the rental market has softened. Annual U.S. rent price appreciation has declined every month since the pandemic began, dropping from 3.8% year-over-year rent growth in February to just 0.7% in August. Median U.S. rent was $1,771 in August, down 0.3% from July, the largest monthly decrease since September 2017.  

Compared to last year, typical rent is down 4.6% in New York, 4% in San Francisco and 3.8% in San Jose. In Boston, the fifth most expensive metro within the top 50, rents are down 2.8% since last year. Typical rents in Washington, D.C., Chicago, Austin, Houston, and Denver also declined since last year.

Meanwhile, rents in Midwestern and Sun Belt cities are making headlong strides upwards. Memphis leads the way with 8.3% rent appreciation since last year, and has seen monthly increases throughout the pandemic. Phoenix rents bounced back with 1.1% month-over-month growth in August after posting negative figures in April and May. 

Methodology

The Zillow Weekly Market Reports are a weekly overview of the national and local real estate markets. The reports are compiled by Zillow Economic Research and data is aggregated from public sources and listing data on Zillow.com. New for-sale listings data reflect daily counts using a smoothed, seven-day trailing average. Total for-sale listings, newly pending sales, days to pending and median list price data reflect weekly counts using a smoothed, four-week trailing average. National newly pending sales trends are based upon aggregation of the 38 largest metro areas where historic pending listing data coverage is most statistically reliable, and excludes some metros due to upstream data coverage issues. For more information, visit www.zillow.com/research/.

Click here to read past editions of Zillow's Weekly Market Report.

 

[1] As with all of our published data, Zillow’s weekly market report metrics are subject to restatement upon further review and with the benefit of more data post-publication. During customary data checks, we discovered that last week’s published data on new listings overstated the true level. This overcount led to an abnormally high week-over-week increase in new listings nationwide and in some large metros. This data has since been restated with corrected estimates in the chart in this week’s release.

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Looking for a Home in the Suburbs? Good Luck, So Is Everyone Else

IP Galanternik D.U./Getty Images

The pandemic has transformed American lives in ways large and small. One of the more surprising side effects: The suburbs are suddenly the hot place to live. COVID-19 has helped transform spacious, single-family homes in those leafy, green oases into the most desirable real estate around—at the expense of the big cities. And this may be shaping up as a long-term shift away from the urban centers that have defined the nation for decades.

But many of those once-die-hard urbanites fleeing to the burbs would have likely left the city anyway. The coronavirus simply sped up their departures.

Last month, home shoppers spent more time looking online at properties in the suburbs than in cities, according to a recent realtor.com® report. Asking prices also rose faster in the suburbs as a lack of homes for sale coupled with a surge in demand for larger abodes with large backyards drove them right up. This shift in demand from urban to suburban areas was most pronounced in the nation’s largest metropolitan areas.

“COVID-19 accelerated this trend,” says realtor.com Chief Economist Danielle Hale. “People are looking for space and affordability, and [the suburbs are] where they can find it. Especially as millennials are at an age where they’re settling down and expanding their families, they’re realizing how nice it is to have more space.”

The analysis looked at the number of active home shoppers on realtor.com, the inventory of newly listed properties as well as active listings, home list prices, and the number of days a property is on the market before it goes under contract.

As in pre-COVID-19 days, many folks start considering leaving urban areas after they have their first child. They’re more likely to pull the trigger after their second. And the millennials who flocked to the cities are getting older, settling down, and having children en masse.

“All you need is a catalyst to precipitate the change,” says demographer Ken Gronbach, of KGC Direct based in Benita Springs, FL. “These people were going to move out of the cities anyway. Maybe it would have been in five years, but then there was COVID-19.”

“That’s just what happens when time passes,” says Dowell Myers, an urban planning and demography professor at the University of Southern California in Los Angeles. “The same group that loved the city now needs a lot more space.”

This may help to explain why in August aspiring home buyers looked at suburban home listings 53.9% more than they did the previous year, according to the realtor.com analysis. Listing views were up a little less, by 50.7% year over year, in urban areas. In the 10 largest metropolitan areas, such as New York City and Los Angeles, that gap widened to 56.4% growth in views in the suburbs compared with 43.6% in the cities.

Hey, it’s easier to stay 6 feet apart in a single-family home with your own backyard than in an apartment or condo in 40-story towers where residents share elevators, laundry rooms, and a roof deck—that is, if they’re lucky enough to have those amenities.

However, even if city denizens want to move to the burbs, they may have a hard time finding a house. The pandemic has greatly exacerbated existing shortages of properties on the market at the same time it created a surge in demand.

The number of homes for sale dropped 41.2% year over year in the suburbs compared with 34.3% in the cities in August, according to the report. New listings were down 12.1% and 8% respectively. In the 10 biggest metros, the overall inventory of homes for sale plunged 40.2% in the burbs and 13.4% in urban areas.

That shortage has caused prices to spike. List prices were up 7.3% in the suburbs and 7.7% in the cities at the end of August, according to the report

The price increases, however, likely won’t dissuade buyers who have held on to their good-paying jobs during the crisis. Now that more companies are considering long-term, work-from-home plans, many of these employees find themselves less tethered to living within easy commuting distance to city business areas. That could entice them to move farther out into the cheaper suburbs.

“The flexibility to work remotely is accelerating this trend,” says Hale. “When the commute’s not a daily thing, it’s easier to justify living farther away from work—especially when you get more for your housing dollar farther away.”

However, folks shouldn’t count the cities out just yet.

Once there is a widely available vaccine and folks are encouraged to socialize again, a new crop of younger adults will once again head to the cities—even if Generation Z is a significantly smaller group than millennials.

“A lot will depend on how things change in response to the pandemic in the long run,” says Hale. “Cities are still a vibrant place.”

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