The American Journal of Management and Economics Innovations
90
https://www.theamericanjournals.com/index.php/tajmei
TYPE
Original Research
PAGE NO.
90-97
10.37547/tajmei/Volume07Issue06-09
OPEN ACCESS
SUBMITED
22 Arpil 2025
ACCEPTED
28May 2025
PUBLISHED
25 June 2025
VOLUME
Vol.07 Issue 06 2025
CITATION
Jeniece Sampson. (2025). Evaluating The Investment Attractiveness of
The Suburban Residential Real Estate Market: Trends, Determinants,
And Strategic Implications (A Case Study of The United States and
Canada). The American Journal of Management and Economics
Innovations,7(06),90
–
97.
https://doi.org/10.37547/tajmei/Volume07Issue06-09
COPYRIGHT
© 2025 Original content from this work may be used under the terms of
the creative commons attributes 4.0 License.
Evaluating The Investment
Attractiveness of The
Suburban Residential Real
Estate Market: Trends,
Determinants, And
Strategic Implications (A
Case Study of The United
States and Canada)
Jeniece Sampson
Real estate businesswoman and financing specialist Toronto, Canada
Abstract:
This study examines the investment appeal of
the suburban residential segment in the United States
and Canada following the COVID-19 pandemic, revealing
structural shifts in demand, pricing, and financing
structures. Its relevance stems from the rapid
reallocation of capital from urban cores to peripheral
areas
—
an evolution underrepresented in existing real-
estate valuation models. The novelty lies in the
development of a comparative “yield–resilience”
framework that combines price trajectories, climate
exposure, and ownership structure. Within this
framework, macro- and microeconomic determinants of
transactions are analysed
—
covering migration flows,
household incomes, interest-rate burdens, and climate
hazards. Construction-for-rent mechanisms, zoning
regulations, and tax incentives shaping institutional
participation in both markets are compared. Data
sources include Bank of Canada transaction statistics,
U.S. federal housing reports, inflationary scenarios, and
a selection of eight academic and industry publications.
The outcome is a suburban typology based on a yield-to-
risk balance, accompanied by recommendations for
portfolio diversification and regional capital allocation.
Further application of the model is proposed to assess
the impact of ESG standards, the energy transition,
mortgage-program accessibility, and increased global
The American Journal of Management and Economics Innovations
91
https://www.theamericanjournals.com/index.php/tajmei
fintech capital participation on the long-term spatial
distribution of investment. This material will benefit
analysts,
developers,
fund
managers,
banking
institutions, and municipal authorities planning
investment and infrastructure strategies. The compiled
database requires further validation through panel-data
modelling, opening avenues for future academic
research.
Keywords
:
suburban
housing;
investment
attractiveness; suburbanisation; United States; Canada;
build-to-rent; climate risk; yield; migration; remote
work.
INTRODUCTION
The shift in demand from central business districts to
smaller urban peripheries
—
driven by remote work, the
aging of the millennial cohort, and rising mortgage
rates
—
is radically transforming the North American
housing market’s structure. Investors must revisit
traditional yield metrics and pricing indicators in light of
new household spatial preferences.
Article aim
–
to assess the attractiveness of the
suburban residential real estate segment in the United
States and Canada, and to identify the factors that
determine its resilience in the post-pandemic
environment.
Objectives:
1.
Identify macro- and microeconomic determinants of
suburban housing prices and rental rates, drawing
on transaction statistics, migration flows, and
income dynamics.
2.
Compare financing models and levels of institutional
participation across the two countries by analysing
the impact of build-to-rent projects, zoning rules,
and tax incentives.
3.
Evaluate the risk profile of suburban residential
investments
—
including
interest-rate
burdens,
climate threats, and social effects from rental-stock
concentration
—
and formulate recommendations
for portfolio diversification.
The novelty of this research is embodied in a
comparative “yield–resilience” model that integrates
price trends, climate exposure, and ownership
structure. This enables a quantitative ranking of
suburban areas according to their yield-to-risk balance
and substantiates a capital-reallocation strategy within
the North American housing market.
METHODS AND MATERIALS
J. Andrews [1] investigated the migration dynamics of
homebuyers between suburban areas and urban
centers. N. Belanova, D. Lebedev, and A. Garshin [2]
analysed the impact of remote work on the spatial
distribution of households. N. Biljanovska and G.
Dell'Ariccia [3] described the long-term response of
price indices to the pandemic shock. M. Carey [4]
examined, in detail, the single-family rental model as an
instrument for generating stable cash flow. N. Dale [5]
assessed the capitalization of the entire U.S. housing
stock and noted a slowdown in growth after the 2022
peak. K. M. Hill [6] studied the social consequences of
institutional ownership of suburban homes. D. Johnson
[7] presented a forecast for a new cycle in the Canadian
market, taking investment demand into account. L.
Morel [8] compared the pace of housing-cost increases
in Canadian suburban and downtown zones.
To derive conclusions, a comparative approach was
employed alongside statistical analysis, supplemented
by a structured “yield–resilience” ranking that integrates
price, climate, and financial indicators.
RESULTS
Research data confirm a marked shift in preferences
toward suburbia
—
particularly in the United States
—
driven by the pandemic. From 2020 to 2022, higher-
income households migrated en masse from downtown
areas to suburban neighborhoods in search of more
living space and to accommodate remote work [3]. This
trend triggered an unprecedented surge in suburban
home prices relative to those in urban cores. In
American metropolitan regions, the historical “center–
periphery” price gradient flattened: whereas propert
y
values traditionally declined with distance from
downtown, in 2021
–2022 suburban home‐price growth
outpaced that of the cities themselves, effectively
closing the gap. For example, one U.S. study found that
during the pandemic years, prices in distant suburbs of
certain major metropolitan areas rose as quickly as
—
and, in some cases, even faster than
—
downtown prices.
A similar pattern emerged in Canada: according to a
Bank of Canada briefing note, the price differential
between central city neighborhoods and their suburbs
had already been narrowing prior to the pandemic, but
from 2020 to 2021 this compression accelerated
The American Journal of Management and Economics Innovations
92
https://www.theamericanjournals.com/index.php/tajmei
(Figures 1 and 2).
Figure 1.
Average percentage increase in home prices from 2019 to 2021, by distance from city center [8]
Figure 2.
Reduction in the price gap between suburban and downtown homes during the pandemic [8]
Thus, the traditional price premium associated with
proximity to the urban core has weakened over time
—
but the pandemic provided an extra catalyst for
narrowing that gap. In Toronto and Montreal, suburban
home prices rose by 30
–
50 percent from 2019 to 2021,
while central‐area price growt
h was more modest [8].
The American Journal of Management and Economics Innovations
93
https://www.theamericanjournals.com/index.php/tajmei
This evidences a structural shift in demand.
However, beginning in 2023, the trend has somewhat
adjusted. As pandemic-related factors subsided and
some workers returned to offices, signs of renewed
interest in urban cores emerged. Nevertheless, the
suburban sector has retained its strengthened position:
the share of suburban transactions in total real-estate
deals remains consistently above pre-pandemic levels.
For example, in the United States in 2024, suburbs
accounted for approximately 45 percent of all home
purchases
—
several percentage points higher than in the
mid-2010s [1]. At the same time, the share of urban
transactions declined to roughly 16 percent [1]. This
indicates that a reverse exodus back to major cities did
not occur; instead, the redistributed equilibrium has
been maintained.
The CEPR/IMF study [3] notes that the suburbanisation
trend in the U.S. is enduring and rooted in long-term
characteristics: American suburbs are inherently more
spacious and socioeconomically varied than their
European counterparts, which facilitated the migration
of wealthier cohorts. In Canada, too, data for 2022
–
2023
show sustained high activity in suburban markets,
although the extreme price growth has given way to
stagnation or a modest correction following rate hikes.
Analysis has shown that the rise in the attractiveness of
suburban housing is driven by a combination of factors
(Table 1).
Table 1.
Factors Driving the Appeal of Suburban Housing (Compiled by the author based on [2
–
5])
Factor
Commentary
Remote work
and lifestyle
The proliferation of fully remote or hybrid work elevated demand for larger
homes outside dense urban cores; buyers value a larger lot, additional rooms,
and proximity to nature
—
especially families that continue on remote schedules.
Demographics
Millennials have reached family-forming age, forming the largest cohort of
homebuyers, and increased their home values in the U.S. by 18.8 percent in
2024; young families choose suburbs for environmental quality and schools,
while immigration to Canada (approximately 500 thousand people in 2022)
boosts demand for affordable suburban segments.
Interest rates
and investment
appeal
Ultra-low rates in 2020
–
2021 reduced mortgage costs, spurring investment; since
2022, rising rates have lowered affordability for urban condos and shifted
demand toward more spacious suburban homes, while single-family rental yields
have remained attractive.
Supply and land
availability
In the U.S., build-to-rent development is flourishing in the Sun Belt
—
where land
is cheaper and population inflow is high
—
causing institutional investors to amass
rental-home portfolios and drive up prices; in Canada, supply is constrained by
zoning and infrastructure limits, causing existing suburban houses to appreciate.
Thus, the synergy of these factors has produced a
durable market shift: remote work has intensified
preference for suburban space; the demographic
impetus of millennials and immigrants accelerates
transaction turnover; differences in financing costs
divert capital from condominiums to single-family
homes; and institutional build-to-rent models induce a
persistent supply shortage on financed land, driving up
the value of remaining suburban housing where land-
use regulations restrict new development. Collectively,
these drivers point to a sustained increase in both price
and demand for suburban housing, while urban markets
exhibit
relative
inertia
—
creating
additional
opportunities
for
investors,
developers,
and
The American Journal of Management and Economics Innovations
94
https://www.theamericanjournals.com/index.php/tajmei
municipalities that can adapt infrastructure and
planning to these changed settlement patterns.
Despite their geographic proximity, the U.S. and
Canadian markets exhibit distinct characteristics. In the
United States, the market is more diversified: alongside
expensive suburbs surrounding major metros (New
York, San Francisco), there are rapidly expanding
suburban areas in the Sun Belt states (Texas, Florida,
North Carolina) with strong economies and robust
inward migration. These Sun Belt markets offer high
investment appeal due to relatively low base prices and
significant growth potential. Redfin data show that in
2024, the greatest aggregate home‐value gains occurred
in northeastern suburbs and certain southern
agglomerations, whereas some overheated markets
(notably in parts of Florida) actually cooled off [5]. In
other words, within the U.S., a redistribution is
underway: investors are shifting focus to more stable
markets with sound economic foundations (for example,
the suburbs of Austin or Charlotte).
In Canada, the market is more monolithic, concentrated
around a few major cities
—
Toronto, Vancouver,
Montréal
—
and their suburban peripheries. Prices there
are among the highest globally, and investing carries a
correction risk. However, demand is underpinned by
record‐high immigration and chronically limited supply.
Consequently, despite tighter credit conditions, no
severe crash occurred: according to the Canada
Mortgage and Housing Corporation (CMHC), 2023 saw a
decline in transaction volume, but the average suburban
home price remained roughly at its 2022 level, and in
some regions (Alberta, the Atlantic provinces) it even
continued to climb as Canadians migrated in search of
affordable housing. Strategically, U.S. investors have
more diversification options (regionally), whereas the
Canadian market is narrower, and investors often rely
on rental income because potential price appreciation
can be constrained by a population already struggling
with housing affordability. Nevertheless, the investment
appeal of the burgeoning suburban market does not
negate the existence of risks.
First, interest‐rate risk: rising rates have made mortgage
payments more expensive, which in turn dampens
further price growth
—
especially in Canada, where most
mortgages are short‐term with variable rates. In five
years, many borrowers must refinance at higher rates,
potentially increasing listings and exerting downward
pressure on prices.
Second, overheating risk: the rapid price surge from
2020 to 2022 may have led to overvaluation in some
suburban markets. A Bank of Canada study [8] warns
that if the pandemic‐induced shift in preferences proves
temporary, suburban home values could decline when
demand normalises. Simulations indicate that, should
urbanisation return to pre‐pandemic levels and builders
significantly ramp up suburban housing supply, prices on
the periphery might face downward pressure. Current
data suggest that preferences have not fully reverted, so
this risk is moderate.
Another risk is geographic and climate exposure. Many
popular suburbs lie in zones vulnerable to climate
hazards: in the southern U.S., hurricanes and flooding;
in the West, droughts and wildfires. Climate factors are
already impacting markets
—
for example, in Florida,
after a series of severe hurricanes in 2022
–
2023,
insurance premiums spiked, cooling investor interest in
certain areas. Strategically, investors are beginning to
factor climate risk into location choices, favoring less
vulnerable regions or budgeting for higher insurance
costs.
Institutionalisation of the market is a significant strategic
consequence: the growing role of large investors in the
single-family home sector is reshaping ownership
structures. Studies note that aggressive purchases of
homes by institutional funds in certain neighbourhoods
can produce social effects: reduced housing affordability
for local residents and even a slight deterioration in
neighbourhood quality. In the U.S., it has been
documented that when institutions acquired and leased
large numbers of homes in some suburbs (for example,
counties in North Carolina), the surrounding home
prices fell modestly (by up to 2 percent), and crime rates
rose [6]. This is attributed to the fact that landlord-
owners may invest less in property maintenance, and
turnover among occupants in rental homes is higher. For
investors, such an “environment” is double
-edged: on
the one hand, the entry of a major player signals a
neighbourhood’s potential; on the other, overheating
due to competition can lead to subsequent price cooling
and social tensions. Therefore, when evaluating
attractiveness, one must account for market-participant
structure and local regulations (some municipalities
impose limits on fund purchases of homes to protect
family buyers).
In light of these trends, investors
—
both individual and
institutional
—
should adopt a diversified approach and
The American Journal of Management and Economics Innovations
95
https://www.theamericanjournals.com/index.php/tajmei
conduct a thorough analysis of local factors. Promising
opportunities lie in suburban markets underpinned by a
strong economic base: regions with job growth
(technology and logistics hubs, university towns), net in-
migration (especially of young people and families), and
a relatively low price base. In the U.S., beyond the
traditional suburbs of major metros, certain
“secondary” citi
es meet these criteria
—
Austin, Raleigh,
Nashville, Orlando, and so forth
—
where affordability
combined with growth makes investments appealing. In
Canada, Prairie cities (Calgary, Edmonton) and Atlantic
centres (Halifax) have emerged as new areas of interest,
since Toronto and Vancouver are perceived by many as
overvalued.
A crucial strategy is to focus on yield
—
rental income
—
rather than speculative price appreciation alone. Given
that the phase of ultra-rapid price growth has likely
passed, buy-to-sell investments are now riskier. By
contrast, rental demand in the suburbs has risen:
households that cannot yet purchase are willing to rent
houses, providing landlords with stable cash flow.
Another strategic aspect is innovation and development.
Investors can consider participating in suburban
development projects. Government policies are
beginning to incentivise housing construction: in the
U.S., the Inflation Reduction Act (IRA 2022) offers
incentives for affordable-housing projects, and in
Canada, 2023 saw the launch of subsidised housing-
development programmes. Private investors may form
partnerships with federal or municipal authorities to
develop new suburban territories
—
thus gaining
additional support and mitigating regulatory risks.
Finally, macroeconomic risks must be taken into
account. In 2022
–
2023, the global housing market
entered a cooling phase due to rising interest rates;
2024
–
2025 is expected to bring stabilisation, but much
depends on monetary policy. If inflation accelerates
again and rates remain elevated for an extended period,
real estate may lose part of its appeal as an investment
asset
—
potentially causing prices to fall even in
suburban areas. Conversely, if rates decline (as
anticipated in 2025), a renewed “window of
opportunity” for subu
rban-market growth may open,
albeit at a more moderate pace. Investors should craft
strategies that accommodate multiple scenarios
—
e.g.,
hedging portfolios with a mix of real estate and other
asset classes, rather than concentrating solely in one
segment, whether suburban rentals or residential-
construction projects.
Overall, the strategic implications of the shift toward
suburbs include reevaluating traditional real-estate
portfolio models. Whereas housing in urban cores was
once deemed the most reliable investment, it is now
prudent to allocate a portion of capital to peripheral
areas
—
especially
given
complementary
trends
(infrastructure expansion, new transit nodes, ubiquitous
internet) that make suburban living more comfortable.
DISCUSSION
The results confirm that the pandemic served as a
catalyst for changes in the U.S. and Canadian housing
markets that were already underway. The investment
appeal of the suburban sector increased, and although
the extreme growth phase has given way to a more
balanced state, structural factors will continue to
support this segment in the medium term. These factors
include:
1.
Ongoing digitalisation of work (remote
work). Remote or hybrid work arrangements mean a
persistent layer of demand for homes with office space
and locations farther from city centres.
2.
Generational shift. Millennials and
Generation Z tend to start families and purchase homes
later in life, but by the 2020s they reached those life
stages, expanding the buyer pool in suburbs
—
traditionally more family-oriented environments.
3.
Policy interventions. Governments have
recognised the housing-affordability issue and are taking
measures to incentivise construction. For example,
Canada implemented a temporary ban on home
purchases by non-residents in 2023 and is preparing
zoning reforms that may ease suburban development. In
the United States, certain states (e.g., California) are
enacting laws to relax single-family zoning standards
—
allowing duplexes and accessory dwelling units (ADUs)
—
to increase suburban housing density. For investors,
such measures create both opportunities (more
development projects) and competition (reduced
exclusivity).
4.
Local economic effects (“breakout”
cities). With remote work gaining traction, many
residents of expensive markets relocated to more
affordable regions, bolstering those local economies. As
a result, smaller cities have received an inflow of human
The American Journal of Management and Economics Innovations
96
https://www.theamericanjournals.com/index.php/tajmei
capital and capital investment, stimulating their housing
markets. Although some migrants may eventually
return, a significant share has become firmly
established. For investors, this means new locations to
consider
—
secondary cities can now offer high returns
(for example, Boise, Idaho, was one of the leaders in
price growth during 2020
–
2021, even though it
corrected in 2022).
5.
Urban-core opportunities. Conversely,
there may now be investment prospects in major city
centres that saw declining demand. For instance,
condominium prices in downtown San Francisco or
Toronto fell in 2023, and rental rates dropped
—
in the
event that urban life revives, these assets could
appreciate sharply. However, it remains unclear
whether urban-centre demand will fully rebound.
In discussing strategies, it is important to account for
capital-reallocation risks. In the U.S., the massive entry
of institutional investors into the single-family rental
(SFR) market has already drawn regulatory and public
scrutiny. Legislative initiatives may emerge limiting the
market share these owners can hold or requiring them
to meet certain property-maintenance standards. Such
measures might even benefit individual investors by
reducing
competition. In
Canada,
government
intervention could intensify due to public pressure
—
as
housing becomes increasingly unaffordable, proposals
include new taxes on investment purchases and
incentives for first-time buyers. These steps could alter
market dynamics.
The long-term consequences of shifting demand to the
suburbs remain to be fully assessed. One such
consequence is infrastructure development: more
roads, expanded utilities, and enhanced transit (for
example, commuter-rail or bus systems) will be
required. Infrastructure usually develops slowly, but
investors should consider future plans: where new
highways or rail lines are scheduled, suburban land
values can appreciate in anticipation of improved
connectivity to urban centres. For example, the planned
Réseau express métropolitain (REM) light-rail expansion
around Montréal is already influencing the prices of
affected suburbs.
Another aspect is environmental impact and quality of
life. Widespread suburbanisation can lead to urban
sprawl, loss of agricultural land, and greater dependence
on automobiles
—
resulting in increased emissions.
These trends run counter to sustainable-development
objectives. Some municipalities are already exploring
how
to
combine
suburban
advantages
with
sustainability principles
—such as the “15
-
minute city”
concept, where all necessities are within a short
distance. Future suburban projects may adopt higher-
density models (small apartment buildings, shared
community spaces) rather than classic single-lot
subdivisions. For investors, this shifts the target asset: in
addition to individual houses, mixed-use or master-
planned communities on the periphery
—
designed as
self-sufficient neighbourhoods
—
could command a price
premium due to their appeal to residents.
In conclusion, the suburban-housing market has become
an arena of significant investment and transformation.
This is a positive signal for long-term investors
—
it
indicates that the market correction was relatively mild
and that prices can now grow in line with fundamental
drivers (household incomes, construction costs, etc.).
CONCLUSION
The suburban residential real-estate market in the
United States and Canada exhibited a marked increase
in investment attractiveness between 2020 and 2024,
driven both by unique external circumstances (the
pandemic) and by deeper determinants (demographics,
new work technologies, limited urban supply). Our
analysis identified key trends: sustained demand for
suburban housing; faster price growth on the periphery
compared to city centres; a large influx of investors
—
including institutional players
—
into the single-family
rental segment; and the gradual narrowing of price
disparities across locations. The underlying forces of this
shift are social (a search for better quality of life, remote
work), economic (affordability of lower-density housing,
population migration), and financial (ultra-low rates
early in the period, followed by a strategic reappraisal as
rates rose).
The strategic implications for investors entail adapting
to these new realities: diversifying geographically;
accounting for overheating risks and regulatory
changes; and focusing on income generation (rental
yield) alongside expected capital gains. The U.S. market
offers more manoeuvring room (a wide selection of
regions with varying trajectories), whereas the Canadian
market is more concentrated
—
calling for caution in
overheated areas (Toronto, Vancouver) and a search for
opportunities in emerging regions.
The American Journal of Management and Economics Innovations
97
https://www.theamericanjournals.com/index.php/tajmei
The scientific and practical significance of this study lies
in its synthesis of data and analysis, which clarifies the
nature and durability of these trends. Our findings can
inform
forecasts
of
future
housing-market
developments and guide investment strategies. For
example, although extreme suburban-price growth has
decelerated, a full reversion to pre-pandemic patterns
(urban-centre dominance) is unlikely: a certain re-
polarisation of spatial demand will persist long term.
This implies that developers and planners should focus
on expanding suburban infrastructure and maintaining
market balance. Investors, in turn, must monitor
housing-affordability metrics
—
if those deteriorate,
political or market corrections may ensue, affecting
returns.
The North American suburban-housing market has
entered a new, more dynamic, and complex phase. Its
investment appeal remains strong, yet it brings fresh
challenges. A sound evaluation of determinants and
risks, as demonstrated here, enables the formulation of
strategies
that
capitalize
on
the
ongoing
suburbanisation trend while hedging against potential
adverse scenarios. For the academic community, these
developments offer rich material for future research
—
for instance, on the impact of suburbanisation on
productivity, transportation, and social structure. For
practitioners in real-estate, they provide clarity about
where the housing market is heading in the twenty-first
century and how to adapt or refine investment decisions
accordingly.
REFERENCES
Andrews, J. (2024). Two years after fleeing to suburbs,
homebuyers flock back to cities. HousingWire.
Belanova, N., Lebedev, D., & Garshin, A. (2023). The
effect of remote work on housing preferences in urban
and suburban areas. E3S Web of Conferences.
https://www.e3s-
conferences.org/articles/e3sconf/pdf/2023/26/e3sconf
_uesf2023_09063.pdf
Biljanovska, N., & Dell'Ariccia, G. (2024). Reshaping the
housing market: The enduring effects of the pandemic.
VoxEU.
https://cepr.org/voxeu/columns/reshaping-
housing-market-enduring-effects-pandemic
Carey, M. (2021). Single-family rentals: A source of
predictable
cash
flows.
Altus
Group.
https://www.altusgroup.com/insights/single-family-
rentals-a-source-of-predictable-cash-flows/
Dale, N. (2025). US housing hits $49.7T as growth slows
to
pre-pandemic
levels.
CRE
Daily.
https://www.credaily.com/briefs/us-housing-hits-49-
7t-growth-slows-to-pre-pandemic-levels/
Hill, K. M. (2025). How institutional investors are
reshaping American neighborhoods. University of
Colorado
Boulder.
Johnson, D. (2025). Canadian real estate facing a new
cycle with renewed investor interest. BNN Bloomberg.
Morel, L. (2022). Growth in house prices: Stronger in
suburbs
than
downtown.
Bank
of
Canada.
https://www.bankofcanada.ca/2022/06/staff-
analytical-note-2022-7/
