Is This Evidence of Deurbanization?

From a historical perspective, this is not typical. Some observations:

• Redfin’s report emphasizes that this is the largest imbalance between sellers and buyers on record (dating back to 2013) for many of the metrics.
• A year ago, sellers outpaced buyers by only about 6.5 %.
• In prior years, often buyers outnumbered sellers in many regions, especially in growing metros. So the current situation reflects a sharp rebalancing.
• Conditions like high mortgage rates (above 6 % in many markets), affordability constraints, and cautious buyer sentiment are all contributing to lower demand.
• On the supply side, new listings have increased (Redfin notes ~3.9 % more listings year over year) and inventory is piling up, which intensifies the surplus of sellers.

So yes: what we’re seeing now is more extreme than what has been “normal” for much of the last decade.

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It’s tempting to interpret a surplus of condo sellers (versus detached home sellers) as a signal that people are moving out of dense urban cores toward more suburban or exurban settings (i.e. a form of deurbanization). But we must be cautious — causality is tricky, and there are multiple overlapping dynamics at play. Here are the nuances to consider:

Supporting the deurbanization hypothesis:

1. Preference shifts under stress
   The pandemic already nudged many toward valuing more space, lower density, outdoor access, and lower commuting constraints. Some who tried urban condo living earlier may now pivot back toward single-family in suburbs or smaller towns.
2. Relative attractiveness of single-family homes
   Because detached homes typically allow more control (yards, fewer shared walls, flexibility), they may be outperforming in desirability when buyers are choosier. The fact that the surplus of condo sellers is much worse (83 %) suggests that condo demand is suffering harder. This could reflect a shift in buyer preference away from high-density product types.
3. Cost pressures and structural affordability
   Urban and condo markets often command premium pricing per square foot. If buyers are being squeezed by mortgage rates or total cost, they may shift to lower-density, lower-cost markets, which tends to favor single-family housing in suburban or outlying areas.

Against reading too much into it (or seeing it as purely deurbanization):

1. Timing, not trend
   Some of the imbalance may simply be a reaction to recent high interest rates, cooling buyer demand, and seller expectations not yet adjusted. These are cyclical or transient factors, not necessarily lasting changes in preferences.
2. Heterogeneity across markets
   In many dense urban areas, condo demand is still strong (e.g. in job centers, transit-rich node areas). The national average masks that local and metro-level dynamics vary. Some cities may still see tight condo markets, especially in the “top 20” markets with strong employment and amenities.
3. Supply-side overhangs in condos
   Many condos have built up in the last decade. Some of that inventory may have been over-supplied or speculative, meaning the “surplus of condo sellers” may reflect oversupply in that product type rather than a sudden exodus of urban dwellers.
4. Entry market dynamics
   First-time buyers or investors may have been crowding the condo segment before; now with higher financing costs, their pullback is more visible in the condo market first. The drop in demand hits smaller/multifamily types more acutely.
5. Non-geographic factors
   Some condo owners may be sellers not because they’re leaving cities, but because of life events (downsizing, health, financial strain). The data doesn’t differentiate between “migrating out” vs. “selling for other reasons.”

Hence, while the pattern is consistent with some elements of deurbanization, it’s too early or too coarse to say the whole shift is about people abandoning cities. It’s better seen as a complex rebalancing where affordability, financing, supply, and preference shifts all play roles.

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Putting it all together:

• The difference in seller-buyer balance between single-family homes and condos is real and substantial. That gap (28 % vs 83 %) is an indicator that the condo/multifamily segment is under greater stress in current demand conditions.
• The magnitude and direction of the shift are unusual compared to the last decade, reinforcing that we are in a structurally different phase, not just a minor blip.
• That said, deurbanization is probably one contributing factor, but not the only or even dominant driver. We’re likely seeing a confluence:
  • Cooling demand overall (due to high rates, buyer fatigue, cost constraints),
  • Overbuilt or oversupplied condo inventory in many markets,
  • A buyer preference tilt toward more space and lower density in uncertain times,
  • And local/regional heterogeneity (some urban cores will still see condo demand, others will lag).

So we should view this pattern as a signal—a canary in the coal mine—that urban-dwelling and multifamily housing may face comparatively higher adjustment risk in the near term. Whether this leads to a long-term reversal of densification depends on how the broader forces evolve (interest rates, employment trends, migration, infrastructure investment).

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