New Yorkers Are Fleeing to the Suburbs: ‘The Demand Is Insane’

New Yorkers Are Fleeing to the Suburbs: ‘The Demand Is Insane’

For three days in late July, a three-bedroom home in East Orange, New Jersey went up for sale for $ 285,000, had 97 screenings, received 24 offers, and was signed for 21 percent above that price.

On Long Island, six people made offers on a Valley Stream home valued at $ 499,000 without seeing it in person after it was shown on a live Facebook video. In the Hudson Valley, a three-acre property with a pool listed for $ 985,000 received four bar offers within a day of 14 screenings.

Since the pandemic began, the New York City suburbs, from New Jersey to Westchester County, Connecticut to Long Island, have seen tremendous demand for homes of all price ranges, a surge that is unparalleled in recent times according to official realtors and local residents.

According to Miller Samuel Real Estate Appraisers & Consultants, home sales in suburban counties around the city rose 44 percent in July year over year. The increase was 112 percent in Westchester north of New York City and 73 percent in Fairfield County, Connecticut, just above the state line.

At the same time, the number of properties sold in Manhattan fell 56 percent, according to Miller Samuel.

Suburban demand, driven in part by New York residents able to work remotely while offices are closing, is raising worrying questions about how quickly the city can recover from the pandemic. It's an exodus that analysts say is reminiscent of the exodus that fueled suburbanization of America in the second half of the 20th century.

It's not just overcrowded open days, multiple offers and bids that are above the asking prices. People in New Jersey suburbs who have no interest in getting their homes on the market receive unsolicited calls and knock on the door from realtors asking if they want to sell.

Of course, New York City residents have moved to the suburbs for decades, particularly to raise children in cities with strong public schools. And it's very difficult to predict whether the new migration will continue at this pace once a vaccine against the coronavirus is available and office towers in the city are fully open again. In addition, most New Yorkers do not have the opportunity to spend hundreds of thousands of dollars on a home in the suburbs.

Experts have predicted the demise of New York City during past crises, including the September 11th terrorist attacks, only to prove wrong. Even if the Manhattan office towers remain largely empty due to the outbreak, some companies, including Amazon and Facebook, are expanding their presence and are betting on employees to return to their desks at some point.

Still, many businesses and workers have been much more comfortable working remotely during the outbreak, suggesting the suburbs will remain very attractive for the foreseeable future.

Currently, many shoppers in the suburbs are concerned about the health risks of living in crowded neighborhoods. Faced with pandemic restrictions, they want space that New York City often can't offer: a yard for their kids to play in and an office to work remotely. Many want land, even if it means being further from Manhattan.

Some buyers have told realtors they are concerned about reports of increasing crime in New York City, real estate agents said. (Overall crime in the city has not increased, but shootings have shown, police data show.)

"People from New York come with a sense of urgency, and what they want is space," said James Hughes, a New Jersey real estate agent, who added that around 60 percent of potential buyers for his property in the city live city. "The demand is insane."

Zack Stertz and Zoe Salzman joined the shopping spree in June. After 15 years in Brooklyn, they found that shortly after the pandemic they discovered that their two-bedroom apartment with a New York-sized garden was too small to work from home with two young sons.

Couldn't afford a renovated brownstone in Brooklyn and feared New York schools wouldn't open for one-on-one classes in the fall, so they looked at New Jersey. They weren't the only ones, her broker at Allison Zeuert Real Estate Group warned and suggested that they act quickly.

When a four-bedroom home hit the market in Maplewood, New Jersey on June 12, they toured it on June 14, and two days later put in a bid for the list price of $ 799,000, the highest bid among many. The sellers accepted it.

"To give up life in Brooklyn and move to the suburbs, we just couldn't see each other there," said Ms. Salzman, 39, a Manhattan-based attorney. "But the pandemic helped us make that choice."

Escape from New York City could hinder the city's economic recovery and its ability to maintain quality of life services like police and sanitation, said Maria Doulis, vice president of strategy and operations at the Citizens Budget Commission, an impartial financial watchdog.

"What is worrying is that the high income earners, especially those on $ 1 million or more, are devoting a significant amount of resources to the New York budget," Ms. Doulis said. "Losing her would really be a blow to the budget."

Mayor Bill de Blasio said this week that he had no doubt that New Yorkers who left during the pandemic would return at some point, although apparently he was referring more to people who had temporarily moved elsewhere, including second homes.

"If you don't think New York City is coming back," said de Blasio, "then you don't know New York City."

Still, real estate agents in the area say they have been inundated with calls from New Yorkers rethinking their desire to stay.

Moving companies have said they can't keep up with demand. According to Metropolis Moving in Brooklyn, the number of offers for moving out of state increased more than 200 percent in May and June compared to months last year and increased more than 165 percent in July year over year. Most people looking for deals moved to the suburbs of the city, while others moved to areas that stretched from Washington DC to Boston.

More than 29,700 homes were sold across New Jersey in June and July, up 33 percent over the same period in 2019, according to the Otteau Group, a real estate data and valuation company.

Jeffrey G. Otteau, the company's president, said the buying frenzy was especially notable because it happened when there were fewer homes on the market.

From the beginning of the year through July, inventory levels in New Jersey were down 40 percent from the same period last year – a sign that many homeowners in the state remained in an uncertain economy.

"The demand has to come from somewhere, and we believe most of it is coming from New York City," Otteau said. "In a way, it looks to me like the 1960s and 1970s, when a huge outflow of the population moved to the suburbs."

Mr. Hughes, the real estate agent in New Jersey, said he had several clients who each lost offers on about half a dozen homes, including a two-bedroom house in East Orange that received 25 offers. It sold for $ 345,000 – 21 percent above its asking price.

"It's crazy for all time," he said.

Rennes Toussaint and her fiancé Olajide Keshinro have been looking for homes in New Jersey for more than two months. The couple, who live in a 500-square-foot apartment in Queens, submitted bids for four houses but lost all of them.

Before the outbreak, the couple discussed leaving the city for the suburbs, but never so soon. It got urgent when Mr. Keshinro, who plays professional basketball overseas, suddenly returned home early, Ms. Toussaint said, and the apartment felt even smaller.

"We thought it was easy, but it's very, very, very competitive," Ms. Toussaint, 33, said of the apartment hunt.

In New York's Hudson Valley, the number of Putnam County homes sold in July rose 35 percent year over year. In Dutchess County, they rose 19 percent.

Melissa Carlton, a real estate agent at Houlihan Lawrence, said the area's quaint towns and scenic views have long drawn second home buyers and people looking for weekend getaways. But New York City residents recently began exploring the area for permanent housing.

"Last year people would say that a property might be too far from the train station," said Ms. Carlton. "That's not the case this year."

This is how Rehana Alam and Sadi Alam feel. They live with their three children, ages 9, 7, and 4 in a house in Jamaica, Queens. For Sadi Alam, a podiatrist, it's a 15-minute drive to work.

However, the Alams were concerned that their children were largely confined to their homes during the pandemic. Over the summer, the couple decided to create more indoor and outdoor space for their children.

On Wednesday, they closed a five-bedroom, pool-side house on two acres in Dix Hills, Long Island, about 30 miles east of Queens.

"The best I could have done was to give them more space," said Ms. Alam, 35 years old. "Given their sad faces, it just wasn't worth staying in Queens."


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