Shutterstock

Housing prices were up 11.3 percent in cities versus 10.2 percent in suburban neighborhoods.

There's been lots written about the movement of people, jobs and businesses to cities. Brookings demographer William Frey has documented higher rates of population growth in center cities than suburbs in a majority of metro areas. Alan Ehrenhalt dubs this "The Great Inversion," with cities displacing suburbs as the center of economic and population growth.
 
New data by Jed Kolko, chief economist at Trulia and Cities contributor, provides additional evidence of this urban shift using housing prices. Kolko tracked the annual change in housing prices based on Trulia data for both urban and suburban neighborhoods. He also looked at neighborhoods that have more multi-family housing and apartment buildings versus those with traditional single family detached suburban housing. And he tracked housing prices in racially and ethnically diverse neighborhoods as well as neighborhoods with larger concentrations of gay and lesbian residents.
 
Here's a quick summary of his methodology:
we looked at (1) price gains, based on the change in median price per square foot among all non-foreclosure homes for sale on Trulia, and (2) population growth, based on the U.S. Postal Service's count of occupied households in each ZIP code. Both measures are year-over-year, with prices through the end of May 2013 and population through mid-June 2013. We classify urban and suburban neighborhoods based on the kind of housing they have – urban neighborhoods are mostly condos, apartments, and townhouses, while suburbs have mostly detached, single-family homes – which we think is more accurate than using big-city boundaries
The key findings: 
  • Housing prices (based on the median asking price per square foot) were up 11.3 percent in urban neighborhoods, versus 10.2 percent in suburban neighborhoods.
  • Housing prices rose even faster in "high-rise" neighborhoods, "where more than half the housing is in buildings with 50 or more units," which saw a 11.9 percent gain.
  • Diversity pays when it comes to housing prices. Housing prices in "gayborhoods," where gay or lesbian couples make up more than one percent of households, rose by 13.8 percent in gay neighborhoods and 16.5 percent in lesbian neighborhoods.
  • Housing prices rose by 14.3 percent in racially and ethnically diverse neighborhoods defined as those "where no group makes up a majority of the population."

The table below, from Kolko's data, shows urban versus suburban price gains in the 20 metros covered by the Case-Shiller Home Price Index.

Metro Urban home price change, Y-o-Y Suburban home price change, Y-o-Y Difference: urban minus suburban
Detroit 28.8% 22.0% 6.8%
Phoenix 27.2% 22.1% 5.1%
Miami 18.1% 13.1% 5.0%
New York 7.3% 2.7% 4.6%
Boston 10.1% 6.1% 4.0%
Las Vegas 33.8% 30.0% 3.8%
San Diego 20.8% 17.3% 3.5%
Los Angeles 20.6% 17.6% 3.0%
Cleveland 7.8% 5.0% 2.8%
Tampa 15.1% 12.4% 2.7%
Portland 15.7% 13.1% 2.5%
Chicago 8.8% 6.6% 2.2%
Atlanta 20.2% 18.1% 2.1%
Washington, D.C. 7.7% 6.8% 0.9%
Denver 11.6% 11.1% 0.6%
Charlotte 9.5% 9.0% 0.5%
Seattle 12.8% 13.2% -0.5%
Dallas 9.3% 11.2% -2.0%
San Francisco 18.9% 21.4% -2.5%
Minneapolis 9.1% 11.7% -2.7%

Table data from Trulia

Urban neighborhoods outpaced suburban neighborhoods in 16 of the 20 metros. Not just the obvious suspects like New York, Washington, D.C., Boston, and Chicago, but metros like Miami, Detroit, Atlanta, Cleveland, and Phoenix.

These data suggest the urban shift in the housing market is real and that the places people desire most are denser, more mixed use, diverse neighborhoods. The flip side here is that these areas are getting pricier, with double digit increase across the board, and thus may be pricing out more people as well as potentially the very diversity that made them attractive in the first place.
 

About the Author

Most Popular

  1. a map comparing the sizes of several cities
    Maps

    The Commuting Principle That Shaped Urban History

    From ancient Rome to modern Atlanta, the shape of cities has been defined by the technologies that allow commuters to get to work in about 30 minutes.

  2. A woman looks straight at camera with others people and trees in background.
    Equity

    Why Pittsburgh Is the Worst City for Black Women, in 6 Charts

    Pittsburgh is the worst place for black women to live in for just about every indicator of livability, says the city’s Gender Equity Commission.

  3. a photo of a full parking lot with a double rainbow over it
    Transportation

    Parking Reform Will Save the City

    Cities that require builders to provide off-street parking trigger more traffic, sprawl, and housing unaffordability. But we can break the vicious cycle.   

  4. Life

    Mapping the Changing Colors of Fall Across the U.S.

    Much of the country won’t see those vibrant oranges and reds until mid-October, which leaves plenty of time for leaf peepers to plan their autumn road trips.

  5. a photo of a child drawing an anti-Amazon protest sign at the Climate Strike march in San Francisco.
    Environment

    Why Climate Strike Protesters Targeted Amazon Go

    Amazon’s automated convenience store became a meeting point—physically and philosophically—for climate and labor protesters on Friday.

×