Booming ‘Zoom Towns’ Should Ease City Housing Costs
Housing in a certain type of town couldn’t be hotter. And some of them have been getting attention way out of proportion to their importance to the economy for an obvious reason: They’re the places where corporate executives, Wall Street barons, Hollywood stars and more than a few journalists have fled to escape the perceived dangers of crowded cities filled with people who might be carrying the coronavirus.
As well-paid knowledge workers who can do their jobs anywhere now flock to these “Zoom towns,” home prices are surging and housing inventory is dwindling. Normally, high prices and low inventory would lead to a construction boom, but many of these communities tightly regulate new building. The upshot might be a brief boom that gets choked off by unsustainable prices.
The U.S. now is several months into the housing-market recovery and we have early data about where the hot spots are. It’s hardly a surprise that home prices are up 25% from a year ago in the Hamptons, given its proximity to the enormous New York job market and its throngs of knowledge workers,
Out west, mountain towns are seeing their real estate gobbled up, too. Truckee, California, near Lake Tahoe, is seeing a boom; housing-analytics firm Altos Research found that list prices for homes are up 50% from their lows this spring. Missoula, Montana, home to the University of Montana and which gets 4 million out-of-state visitors annually, is booming as well. Bend, Oregon, a tourism draw famous for its craft breweries and outdoor activities, has less than one month of housing inventory for sale, an usually low level.