Why Are Suburban Houses More Expensive Than Rural Ones?
Suburban houses are generally more expensive than rural ones for several reasons. This article will explore these factors and provide insights into the real estate market dynamics that contribute to this price disparity.
Proximity to Urban Areas
One of the key factors driving the higher cost of suburban homes is their proximity to urban areas. Suburbs are often located just outside city boundaries, providing residents with easy access to jobs, amenities, and services. This proximity significantly enhances the convenience of living, increasing demand and consequently, property values. Urban centers offer a wide range of opportunities, from job prospects to educational facilities and entertainment options, making suburbs more desirable for many people.
Infrastructure and Services
Suburban areas typically boast better infrastructure with well-maintained roads, schools, healthcare facilities, and public transportation. These services greatly enhance the quality of life for residents, making suburban living more attractive. Better infrastructure can also lead to a more stable and predictable living environment, which in turn makes these areas more appealing to potential buyers and investors.
Desirability
Many individuals and families prefer the lifestyle associated with suburban areas. This includes the ability to own larger homes with spacious yards, and a sense of a safer and more tranquil environment. Suburbs often offer a pleasant balance between the conveniences of city living and the peace and quiet of rural areas. This desirability is further fueled by suburban areas' reputation for good schools and a strong community atmosphere, all of which contribute to higher property values.
Zoning and Land Use
Zoning regulations and land use policies can also play a significant role in the higher cost of suburban homes. Many suburban areas have stricter zoning laws that limit the types of development allowed, thereby creating a shortage of available land. This scarcity of land can lead to higher property values, as the supply is limited while demand remains high. In contrast, rural areas may have more expansive spaces but are often less developed, offering fewer amenities and infrastructure.
Market Trends
Real estate markets can be influenced by various trends. For instance, the rise of remote work has increased demand for suburban homes. Many people now seek more space and a better living environment in the suburbs, leading to higher prices. Additionally, the perception of safety, particularly in urban areas, can drive more individuals towards suburban living.
Higher Property Taxes and Higher Utility Costs
The discussion above emphasizes the desirability and infrastructure in suburban areas, but it's important to consider the financial costs associated with suburban living as well. In an interview last October, I spoke with someone who lives in a rural town in New Hampshire, near the Massachusetts border. They mentioned that their utility costs are about half of what they are in their city home. Their utility costs were 1 cent per kilowatt-hour (KwH) and 1.56 cents per CCF (therm) for heating, compared to 21 cents per KwH and 3.11 cents per CCF for winter 2023 in their city home with Unitil. This means that while utility costs in the countryside are significantly lower, to maintain the same level of comfort, homebuyers in the city pay more for their suburban homes.
The argument can be made that necessary commodities are more affordable in rural areas. However, the majority of city residents, whether they are overweight, smokers, or both, tend to prefer convenience over cost. Even though stores may be located nearby, they often drive to larger or more convenient retailers for their needs. This preference for convenience over cost can lead to a higher demand for suburban homes, even if the current utility and property tax costs are higher.
Overall, the combination of demand, location, infrastructure, and lifestyle preferences contributes to the higher prices of suburban homes compared to those in rural areas. While rural homes may offer lower utility costs and property taxes, the higher cost and lifestyle differences in the suburbs often outweigh these benefits for many buyers.