Lately, there’s been significant discussion as to whether major cities like New York are “dead” after COVID-19 pushed some residents to skip town in search of suburban real estate. While these assertions of New York’s death (and their rebuttals) have largely been delivered as loud, unsolicited, anecdotal missives, there’s mounting evidence that New Yorkers and their urban counterparts could be making their way to the suburbs more permanently.
According to data from Miller Samuel Real Estate Appraisers & Consultants, July saw a 44% year-over-year increase in home sales across all suburban counties surrounding New York City— at a time when Manhattan property sales were down 56%. That change was especially pronounced in the Metro North corridor of Westchester County, New York (up 112% over July 2019), and Fairfield County, Connecticut (up 73% over the same period). But the effects of this sudden real estate boom are reverberating even farther afield than Manhattan’s traditional nearby suburbs. In the Hudson Valley, Putnam County’s numbers are up 35%, while Dutchess County has seen 19% more home sales. Statewide, New Jersey saw a 33% increase over July 2019. Further south, the D.C., Maryland, and Virginia metro area saw $1.1 billion more home sales in July 2020 than in July 2019.
Those increases in successful suburban real estate home sales may not even tell the full story of just how many are looking for more spacious houses. Reporting from the New York Times indicates significant demand across the New York City tri-state area, with one three-bedroom in East Orange, New Jersey, attracting an astounding 24 offers. (The winning bidder went a full 21% over the home’s $285,000 asking price.) Full-price cash bids for homes listed at nearly $1 million and multiple offers from prospective buyers who hadn’t set foot on a half-million dollar property aren’t unheard of in these strange times.
Don't miss the AD PRO-exclusive workshop—Photo Finish: How to Showcase Your Project
The surge in home-buying reflects how drastically the priorities for millions of potential homebuyers have shifted almost overnight. With urban office spaces mostly dormant and companies likely to allow for more remote work even after a COVID-19 vaccine becomes available, paying city prices for fewer square feet isn’t as appealing. The need for more space is especially acute for parents, many of whom are trading the now-irrelevant conveniences of city life for greater outdoor space and better schools. “The people from New York are coming with a sense of urgency, and the thing they want is space,” New Jersey real estate agent James Hughes told the Times, noting that a majority of his potential buyers are trying to get out of the city. “The demand is insane.”
That insane demand is exacerbated by the fact that the same pressures driving prospective buyers out of the city are encouraging those already in the suburbs to stay put. The Times notes that New Jersey’s housing inventory from the start of the year through July is down 40%, as an uncertain climate and other pandemic-related concerns encouraged many to hold on to what they have.
With both micro- and macro-scale signs pointing to a level of demand that currently exceeds supply, it could be a good time for home builders, should other economic factors remain constant. Data from the Commerce Department indicates new single-family house sales were up 13.9% from June, and a further 36.3% above July 2019. Single-family housing sales were also up 8.2% for July, indicating a desire to close the gap between supply and demand. Whether these moves represent a long-term solution to a temporary problem or a greater paradigm shift remains to be seen.
