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By Dima Williams
September 22, 2020
Sam Island for Money

At the onset of the coronavirus pandemic this spring, Steve Archino’s phone was seldom quiet. In a matter of days, the Sotheby’s International Realty agent took more than 60 calls from New York renters considering a move to Greenwich, Connecticut. One question he heard over and over: “Do you have Wi-Fi there,” Archino said, laughing.

“One day, I was exhausted, and I just had to make a joke of it,” he said. “And I said, ‘Yeah, and about two months ago, we got indoor plumbing.’”

About an hour north of Manhattan by train, Greenwich has attracted commuters for years. Since COVID, however, the town’s appeal has skyrocketed, replicating a trend that has taken hold around the nation. Boasting larger properties and lower home prices than in urban areas (at least per square foot), the suburbs suddenly look appealing as people work, live and learn from home.

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Real estate listing site Realtor.com found that in the second quarter of 2020, half of the home searches by urban residents in the country’s 100 largest metros zoomed in on nearby suburbs. The firm’s annual ranking of the 10 hottest zip codes released last month almost exclusively featured suburban areas. With scores of companies now committed to remote employment, more and more city dwellers are decamping for the suburbs, where growing home-buying demand is now pushing prices up.

Nonetheless, according to home listing site Zillow, working from home could enable nearly 2 million renter households, who are priced out of ownership in their current cities, to buy starter residences in more affordable areas.

“It’s mostly people with children who are moving from the city to the suburbs,” said Aaron Share of Jameson Sotheby’s International Realty in Chicago. “I did have a few people who did move to the suburbs just because there’s nothing keeping them in the city anymore. They’re working from home indefinitely. They no longer needed to be close to work.”

And, as city renters and homeowners plan their relocation to the suburbs, inquiries like the one Archino fielded are not uncommon, if somewhat comic. From internet connectivity to septic-tank service, moving to the suburbs is a journey — and a learning process.

READ MORE: THE BEST PLACES TO LIVE IN 2020

Suburban surprises

A lot of families with children settle in the suburbs because of well-regarded public schools. Some suburbs, however, encompass several school districts with intricate boundaries, which may perplex home shoppers. A house just down the road may place a kid in a different school district from the one her parents’ desired.

“That’s something that people don’t realize when they’re first starting their search,” said Share.

Other surprises may be a little more mundane. For instance in Greenwich, the further away you reside from the town’s center, the more likely it is for your home to have a septic tank rather than a sewer connection. Archino recounted the predicament of a family who have lived in Greenwich for about six years — and did not clean their septic system once. The tank almost spewed back into their home. Septic tanks need to be pumped out every couple of years to prevent backup and property damage.This typically costs about $500.

Another underrated luxury of urban living that tends to disappear in the suburbs is trash collection, which is typically handled by your landlord or property manager in a city. In many suburbs, however, until homeowners contract household-waste companies to pick up their garbage, it will just pile up on their driveway. Running against local ordinances, uncollected trash or improperly disposed-of waste may come with penalties.

“Such pieces that are usually bundled in apartment rent now become the responsibility of the homeowner,” said Brian Ladd of Cascade Sotheby’s International Realty in Bent, Oregon.

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Home maintenance

An even bigger expense is regular home maintenance. “There’s always something to do in a house,” said Share. “It never ends. There’s always going to be another project or another something that needs to be fixed or updated at some point because nothing lasts forever.”

From small tasks like mowing the lawn to large undertakings such as roof repair, the maintenance of a single-family home can cost thousands of dollars a year. And, if a city renter could call his landlord to request an in-unit repair, as a suburban homeowner, he will have to schedule and pay for maintenance.

One rule of thumb is to set aside 1% of the home’s purchase price as an annual maintenance budget. For a $300,000 house, this translates to $3,000 each year. Another approach is to reserve $1 for every square foot. If a major system like the HVAC needs replacement, though, that cost alone may swallow the typical maintenance budget.

Suburban real estate agents advise home buyers to request a list of service companies that the seller relied on — from planting hedges to fixing the A/C system. “You might not know the local service providers but these are people who already know the property,” said Archino. “You could choose to stay on with them or use somebody different.”

READ MORE: THE BEST PLACES TO LIVE IN 2020

Homeowner association fees

Some suburban homes are part of homeowner associations that will take on light aspects of property maintenance such as lawn mowing and snow removal. These organizations, though, are not present in every suburb and their services and fees can differ greatly. New suburban communities, for example, may have associations that collect charges for the upkeep of common amenities — say, a park or a pool — and private roads. Depending on what they take care of, association fees can amount to just a hundred dollars or reach about a thousand dollars.

“Some associations cover the lawn care and extra maintenance of a property,” said Jason O’Neil of Century 21 Scheetz in Carmel, Indiana. “So their fees are going to be higher. It’s really a balancing act of understanding what you’re paying for and what you’re getting.”

Property Taxes

As is the case with HOA fees, suburban property taxes vary. Yet, they are often higher than those paid by city dwellers. Suburbs may not collect as much revenue from sales or business taxes, so tend to levy high residential property taxes, which usually provide the lion’s share of public schools’ budgets. Another reason is that suburban homes tend to be bigger than in the city, leading to a higher bill even at a lower tax rate.

“People think that Chicago does have very high taxes, but in the suburbs, they are actually higher,” said Share. “A community that may be completely residential and has no corporations or offices to contribute to the tax base, their property taxes are usually going to be higher.”

Property taxes also vary from suburb to suburb, especially if they fall within different counties. For instance, in Bureau County, some two hours west of Chicago, the effective property tax rate is roughly 2 percentage points higher than in neighboring La Salle County (4.17% versus 2.30%), according to analysis by real estate data provider Attom Data Solutions.

Thus, even if the suburbs entice with their large homes and big yards,those perks come with costs and obligations that might be new for urbanites. “Living in the suburbs does take a bit more time and sometimes a bit more money,” said Ladd. “But it is well worth the hassle.”

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Our mission is to help people at any stage of life make smart financial decisions through research, reporting, reviews, recommendations, and tools.

Earning your trust is essential to our success, and we believe transparency is critical to creating that trust. To that end, you should know that many or all of the companies featured here are partners who advertise with us.

Our content is free because our partners pay us a referral fee if you click on links or call any of the phone numbers on our site. If you choose to interact with the content on our site, we will likely receive compensation. If you don't, we will not be compensated. Ultimately the choice is yours.

Opinions are our own and our editors and staff writers are instructed to maintain editorial integrity, but compensation along with in-depth research will determine where, how, and in what order they appear on the page.

To find out more about our editorial process and how we make money, click here.

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