Flattening the curve and the flight of the rich: Pandemic-induced shifts in US and European housing markets

The pattern of increasing suburban house prices relative to urban centers initiated during the pandemic continues to hold across the top 30 US metropolitan statistical areas (MSAs). In contrast, European countries such as Denmark, France, and the United Kingdom did not experience a similar shift in valuations. We posit and find supporting evidence that these divergent patterns are partially due to differences in the characteristics of suburban areas, particularly in terms of household income and property sizes; with European suburbs being relatively poorer and characterized by smaller housing units. We show that, in the US, MSAs with suburban features more akin to those in European cities generally experienced little to no increase in suburban housing prices compared to their urban centers. Finally, our findings indicate that migration patterns of the high-income population might have partially influenced the urban-suburban revaluation in the US.