Free house price estimates, available online, are a hot commodity consumers are using with abandon to research real estate. This is especially true for residences on sale in the city. After all, location, location, location is what it's all about when buying a house.
However, because demand is so hot and heavy in urban locales, house values are outpacing those in the suburbs by a significant degree, according to a newly released report.
Real estate, by definition, is local. In other words, what's true in one region or city of the country may be different in another. However, generally speaking, home prices on the outskirts of the city have historically been higher than those within it.
It's a whole different ballgame in today's marketplace, particularly in highly populated urban zip codes. This includes the 02108 in Boston, 94101 in San Francisco and 20001 in the nation's capital, based on a recent home price index report from online real estate listings firm Zillow.
Home price increases up double-digits out West
"San Jose is the nation's most expensive metro area for buying a house."
Urban home price growth has been particularly robust in Western locales. In Seattle, for example, prices on the typical single-family urban residence rose 11 percent year-over-year, according to the Seattle-based home listings website. In Denver, values rose 14 percent, by 13.5 percent in Dallas and 13.2 percent in San Jose.
Roughly 350 miles north of Los Angeles, San Jose is the country's most expensive metropolitan region for buying a home. During the fourth quarter of 2015, the median was $940,000 for a single-family residence, according to the National Association of Realtors. That's more than $700,000 above the national median.
Svenja Gudell, Zillow's chief economist, said that unlike urban areas, buyers are finding lower prices in the suburbs, and taking advantage of amenities that aren't typically associated with suburban living.
"Home buyers [are] changing preferences," Guddell explained. "They seek amenity-rich, dense and walkable areas that are often closer to their workplace."
She added that it's only a matter of time before suburban regions become more populated. As a result, they'll take on the feel of urban locations, thereby "changing some suburbs as we know them."
Boomers steering clear of the city
"Less than 10 percent of boomers prefer to live in the city."
In addition to a price divide between the suburbs and the city, there's a generational divide as well. Wanting to downsize now that they're approaching retirement, baby boomers are heading out of town. According to a survey conducted by the National Association of Home Builders, only 7 percent of boomers prefer to live in an urban neighborhood. Instead, roughly 66 percent opt for the suburbs and 1 in 4 consider the country to be best.
There's also a difference in opinion on the style of home that's best, divided down generational lines. At 75 percent, baby boomers overwhelmingly are partial to single-story homes, NAHB reported from its poll. Contrast that with millennials, only 1 in 3 of whom who don't want an upstairs.
Regardless of the neighborhood or venue in which consumers live, home prices continue to climb. Nationally, suburban values increased by 6 percent from the year prior, according to Zillow's analysis, and by 7.5 percent in urban locations.