February 6, 2022
View source version HERE
Small and midsize rural communities had some of the biggest increases in home prices in the first two years of the pandemic, driven by out-of-town buyers.
The throngs of remote workers who flocked to rural communities throughout the pandemic have begun to thin as employers push a return to offices. But for many of the towns remote workers descended on, the housing crisis they fueled has remained.
“The people can’t find housing, and I’m not talking about affordable housing. I’m saying they can’t find housing at all,” said Barbara Bruno, the mayor of Springdale, Utah. “Even if they can afford to buy something, there’s nothing to buy. It’s really that dire.”
Small and midsize rural communities saw home prices surge during the first two years of the pandemic as workers with the newfound ability to do their jobs from anywhere relocated outside of city centers for more space and easy access to outdoor activities.
But that city-to-country migration has shown signs of reversing over the past year. Home buyers have been shopping for places closer to large metro areas, with cities like Washington and Los Angeles seeing population gains again in 2022. The shift comes as a growing number of employers are requiring workers to come back into the office — for the first time since the start of the pandemic, more than half of workers in major metro areas went into the office at least once from Jan. 18 to 25, according to data from the building security firm Kastle Systems.
“They need to be back for their work, they have to go back to their office, so we see that the big city centers are reviving as more people are going back,” said Nadia Evangelou, senior economist at the National Association of Realtors.
People’s desire to get out into nature also appears to have waned, with visits to popular national parks like Yellowstone and Zion down from their pandemic highs last year, RV demand slowing, and several popular ski resorts, like Vail in Colorado, having fewer visitors.
All that should mean some relief for the housing markets in popular rural communities where home prices ballooned over the past two years from a burst of out-of-town buyers, pricing local workers out of the market. But residents and officials in the affected communities say that while the ranks of remote workers have ebbed, they have seen no relief from the massive housing shortages they spurred.
In the 500-person town of Springdale, Utah, near Zion National Park, residents and officials have been increasingly struggling to find even basic housing to support the local workforce, leaving businesses and the national park chronically understaffed with few signs of the situation improving, said Mayor Bruno.
Prior to the pandemic, Springdale wasn’t known as a hotspot for out-of-towners seeking second homes or investors looking for rental income. But since the start of the pandemic, average home prices there have increased almost 60% in under three years to more than $575,000, according to the Zillow's home value index, which uses a range of data to determine average home values. That rise has been driven by out-of-staters buying second homes, investors and the conversion of long-term rentals to Airbnbs and other types of short-term rentals, said Bruno.
That has left local businesses, which cater to millions of visitors who pass through the town each year on their way to Zion, struggling to hire everyone from hourly workers to skilled professionals needed to support the community. Bruno said she has heard of renters repeatedly losing their lease because the property is being converted into a short-term rental, workers commuting more than 100 miles round-trip for hourly jobs, and others living in RVs, campsites or shipping containers.
Affordable housing has been an issue for decades in rural destination towns, like Aspen, Colorado, and Jackson, Wyoming, popular spots for wealthy visitors and dependent on large numbers of low-wage workers to support the tourism industry.
But the large numbers of people moving from high-cost, large cities to smaller communities greatly exacerbated those housing shortages and spread the problem to new communities with less experience dealing with affordable housing and fewer resources to respond, said Danya Rumore, a professor at the University of Utah who founded the Gateway and Natural Amenity Region Initiative.
“The pandemic really hit the gas pedal on what was already happening,” said Rumore. “The pandemic basically expedited this trend by 15 years. So 15 years of a trend that we thought would happen was just compressed it into one.”
In Moab, Utah, residents are having similar issues as their desert community has become a new hot destination for second-home buyers, said Kaitlin Myers, executive director of the Moab Area Community Land Trust.
Even with demand seeming to ease and the housing market cooling, developers continue to build housing that will be unaffordable for most local residents, said Myers. She said several mobile home parks, which were one of the last bastions of affordable housing in the community, were bought in 2021 by developers who plan to put higher-end housing in its place.
“Our housing prices were lower than a lot of other resort communities, so we had a surge in second homes, and for the first time we were seeing our community go to that next level of resort community,” said Myers, who says she’s begun to notice more homes sitting dark and empty.
There are few nearby alternatives for the town’s workforce, with the closest city more than an hour and a half away. While in the past, lower-wage workers struggled to find housing, the pandemic-triggered surge in home prices means even middle-income professionals, like teachers, city officials and health care workers, have been priced out, Myers said.
“In 2018, 2019, you could be a working-class family and we still had housing options that were $300,000 to $400,000, which is manageable. But now we just don’t have options like that in our market anymore,” Myers said. “We definitely still need housing for housekeepers and restaurant workers and river guides, but for the most part, we have a lot of businesses that are starting to figure out housing for them. Our bigger issue is making sure that we have housing for teachers, nurses and firefighters and our essential workforce that we need to run the community.”
In Whitefish, Montana, home to a ski resort and near Glacier National Park, the population grew by nearly 10% in 2021, to 8,500 people, and home prices doubled to nearly $1 million from just over $450,000 at the start of the pandemic, according to Zillow data.
When Daniel Sidder started searching for a home in Whitefish last fall after taking a job there as the executive director of the advocacy group Housing Whitefish, he said he was unable to find a place that would lease to his family for more than nine months a year because so many properties had been converted to vacation homes, with owners wanting to use the house in the summer or rent it for more to summer tourists.
“For a long time Whitefish has been a pretty affordable place where people could come and work seasonal jobs and maintain a pretty decent quality of life and continue to grow their careers over time,” Sidder said. “It is just getting harder and harder for those people that are seeking those opportunities to maintain that over the long term.”
Real estate economists say that the rural areas that saw the biggest pandemic booms will likely see outsize declines in prices, compared to the housing market nationally.
But given the limited supply of housing and the unwillingness of homeowners with low mortgage interest rates to sell, prices aren’t expected to return to their pre-pandemic levels, said Lisa Sturtevant, chief economist for the real estate data firm Bright MLS.
“There’s just such an imbalance between how much housing is needed and how much housing is available, and that’s not going to change in the near term at all,” Sturtevant said. “That’s going to still be challenging.”
Click here to return to the homepage