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January 5, 2021

How Covid is driving the US property market

By Paul Dennis

5 January

Gregory Daco, chief US economist at Oxford Economics, re-tweeted about home prices rising faster in the middle of the US as the coronavirus pandemic forces people out of the large cities on the coasts.

Historically, these cities have witnessed a sharp price rise in housing due to leaner supply and high demand.

However, this is not the case now say economists, who point at smaller metropolitan markets such as Indianapolis, Cincinnati, Cleveland, Kansas City, Memphis, Pittsburgh, Austin, Texas, Idaho, and Boise to be experiencing the strongest price gains.

Reports have suggested a remarkable rise in home prices of about 8.4% in October 2020 compared to last year, and a 7% up since September 2020 which is being considered as the largest monthly increase in a decade.

According to the Federal Housing Finance Agency, home prices in the smaller cities have now increased by 10% compared to the previous year, the article noted.

These cities have been known to be affordable, and with more inventory of homes available for sale.

However, the sudden strong price gains in these smaller markets is indicative of the prevalence of remote working trends, and how people are making the move from more expensive markets to affordable markets due to the pandemic.

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