- Competition in suburban commuter markets has grown fierce
- Market dynamics for close-in suburb homes with declining values as in demand as turnkey homes, especially if priced under $1M
- Huge demand from city dwellers for single-family home rentals
Some housing market experts are seeing the market impacts of COVID-19 pandemic as life altering while others are seeing those impacts as reversible. Jeffrey Otteau, president of the Otteau Group, a real estate valuation firm, sees the COVID pandemic as “…a life altering series of events which likely made an indelible mark on everyone’s psyche, not unlike what happened after the Great Depression…Possible this is one of those events.”
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Taking another point of view, Jonathan Miller, president and CEO of Miller Samuel appraisers, Miller said, “When there is a vaccine, and let’s call it 2021, and this (the pandemic) is resolved, does this thinking (migration to the suburbs) continue? My thinking is no…only because we saw this after 9/11. We saw this outbound migration for three years and then it reversed.”
Right now, here are five ways an exodus from cities is disrupting suburban real estate:
- It is a sellers’ market.
- In Westchester County outside of NYC, the number of signed contracts was +18% in June compared to last year, according to data from William Pitt Sotheby’s.
- During Q2 with inventory down -18.5% compared to last year, closings of single family homes in Greenwich CN increased +8% over last year, according to a report by Douglas Elliman.
- According to Jennifer Leahy with Douglas Elliman’s Greenwich office, all listings priced under $3M had multiple bids while listings priced over $4M were more-slow going.
- Listings in northern New Jersey suburbs (Bergen, Essex, Union and Middlesex counties) increased +70%, according to Eddie Shapiro, CEO of Nest Seekers International.
- Back country areas with large homes on multiple-acre lots are now hot in a market that has been “frozen” for 12-15 ears.
- +80 listings in Weston CN with minimum two-acre zoning and no downtown had accepted offers or were under contract in June, triple the pace of last year, according to Cyd Hamer, agent with William Pitt Sotheby’s.
- “Dated” property’s are no longer deal killers
- With limited inventory and shifting priorities, buyers willing to do needed work.
- Otteau said, “Younger-age buyers have really not wanted to take on renovation projects…it still has an effect on the selling price of a home, bit the need for work is no longer an impediment to sale.
- With swimming pools being the top priority, Hamer said, “I joke that people are buying the pool and the house that goes with it.”
- Rents are off the charts.
- Homeowners with somewhere else to go are renting and collecting unprecedented sums for their homes.
- According to Melodye Coluccie, agent with Coldwell Banker Residential Brokerage in Stamford CN, renters looking at $4,000 – $7,000/month range for modest three or four bedroom home…high-end rentals are commanding and getting $10,000/month and more.
- Emotions rule and drive deals.
- The usual business-minded pragmatism, especially at the higher end, is playing second fiddle to buyers and renters who want to make a deal now.
- According to Colucci, “Fear is a huge driving emotion and people who can afford it will pay a huge premium to make that fear go away.”
Thanks to The New York Times.