The impacts of the global coronavirus pandemic have not been distributed equally. Some sectors of the economy have been devastated. Unemployment skyrocketed to 14 percent in April. Other sectors have seen business increases and many people have learned by experience that they can work from home.
Seeking to move away from crowded environments and higher prevalence of infection, urban office workers are packing up their families and laptops and moving to the mountains, beaches and rural settings in waves never seen before.
YOLO! The You Only Live Once mindset is driving demand for homes in wide-open locations seen as safe havens during the pandemic. Mountain and other rural destinations that are within a few hours drive from previous residences in urban locations are in particularly high demand, think of a four-hour radius from San Francisco into the Sierra or from Denver into the Rockies. According to Jim Carlton, Lake Tahoe and Vail aren’t just for vacation anymore, “as people’s realization that they can work from anywhere during Covid-19 office shutdowns have led to bidding wars for homes in remote areas of the West.”
This urban exodus impacts rural and resort communities in a variety of ways. . As location-neutral workers and their families migrate into Colorado’s resort towns, tourism economies are transformed into “lifestyle economies”. According to Leslie Nichols, student enrollment in Gunnison Watershed School District schools this year exceeds the annual average as new families move into the district from Golden, Denver, New York, Austin, Dallas and other large cities.
The COVID Housing Boom
Nationally, sales of new homes surged in July, rising 13.9 percent nationwide, on the back of big increases in May and June. Last week, the National Association of Realtors reported sales of existing homes rose by a record 24.7 percent and the construction of new homes increased 22.6 percent.
In California, Tahoe home prices have soared as Bay Area residents flee virus, with the area’s median home price up 17 percent to $865,000 as of August. Closer to home, the number of residential home sales transactions was up 36 percent by end of September driving average price up eight percent.
Less Affordable Housing
In mountain towns across Colorado and the West, in-migration from urban areas is consuming the available housing supply at a rapid pace and driving up housing prices. In Telluride, a 371 square foot converted hotel room, studio condo sold for $445,000 – almost $1,200 per square foot! In nearby La Plata County, the Durango Association of Realtors reported that at the end of September, the number of available units for sale was 288, down from 705 a year ago — a 59% drop!
September real estate sales have been off the charts. In Crested Butte, the number of properties sold was up 184% and revenue up 232%. On top of that, 164 properties went under contract, more than triple the norm. In Steamboat Springs, real estate sales revenue hit a new record high increasing more than 170% over September 2019. The pandemic exacerbated the trend of remote workers relocating to mountain towns. As remote workers move in, there is less housing available for teachers, police officers, plow drivers and hospital workers who earn their livings locally. According to Urlich Salzgeber, the CEO of the local Board of Realtors, “If we don’t start increasing our supply and target that supply for the workers of our community, then we are going to start losing our community feel.”