Nearly a third of Americans are considering moving to a less densely populated area in the wake of the pandemic.
The coronavirus (COVID-19) is impacting the global economy and raising fears of a recession. What causes a recession and what are the signs?
Ben Greenzweig is itching to move his wife and three kids South, a plan that may get accelerated due to the coronavirus pandemic.
The CEO and co-founder of conference company Momentum Event Group, says hes looking to move to either North Carolina or South Carolina from the New York City suburbs in Westchester County, for cheaper costs and bigger living space amid fears that a deep and prolonged economic slump in the state could eventually force residents to pay higher taxes.
It would be an unbelievable escape,” Greenzweig, 42, says. He typically works from home which gives him flexibility.
Our children’s involvement in school is the single largest tether keeping us here. If theres a hint that school won’t resume in the fall for my kids, then the biggest reasons for us staying here, which are friendships and school activities, evaporates.”
Nearly a third of Americans are considering moving to less densely populated areas in the wake of the pandemic, according to new data from Harris Poll. That may foreshadow a shift that would have a major impact on residential real estate sales and home prices.
Economy: U.S. economy shrank 4.8% in the 1st quarter amid state shutdowns, millions of layoffs
Jobless claims: Record 26 million Americans filed for jobless benefits over 5 weeks as layoffs wind on
Urbanites (43%) were twice as likely than suburban (26%) and rural (21%) dwellers to have recently browsed a real estate website for homes and apartments to rent or buy, the survey showed, which was conducted among 2,050 U.S adults from April 25-27.
People will be much more cautious about living in high-density areas with so many people nearby, predicts Lawrence Yun, chief economist at the National Association of Realtors.
Robin Kence, a licensed associate broker at Compass Real Estate in Greenwich, Connecticut, has been fielding calls from clients in New York City over the past seven weeks looking to rent or buy properties in the area. Grass, outdoor space and convenience to essentials like groceries is critical to them, she says, as well as fast internet connectivity because many of them are traders who work in the financial services industry.
Im seeing a shift from summer rentals a few weeks ago to now year-round rentals, Kence says. I expect Greenwich will be rediscovered yet again as a very viable alternative for full time living with just a 45-minute train commute to the city.
Lee-Sean Huang, 39, who has lived in Manhattan for the past 14 years, temporarily fled to Sag Harbor, a village on New York’s Long Island, to seek more living space when the coronavirus hit. The move is part of a growing pattern that has emerged in the wake of the pandemic of people leaving the city to stay with relatives, friends, or even to stay in short-term rentals elsewhere.
The things that make living in Manhattan appealing arent available right now. Bars and restaurants are closed, he says. He was already working remotely for the most part after splitting his time teaching design at New York University (NYU), Parsons and the School of Visual Arts. He’s also the co-founder and creative director of Foossa, a design studio.
I appreciate the walking commute, but since none of those things are applicable right now, its a shift in priorities to having space.
Joe Wright, managing broker at Joe Wright Real Estate, a boutique brokerage specializing in residential real estate in Chicago and Indiana has heard from people looking to flee metropolitan areas.
One of his clients living in a high rise in downtown Chicago inquired about suburban rentals after a few people in her building tested positive for the virus. She opted for a furnished rental unit in the city’s western suburbs unit via Vrbo, a popular rental website.
Wright, who is also a landlord, says a tenant who lived in one of his rental properties in a high rise building in busy Lakeview, the northside neighborhood home to Chicago’s iconic Wrigley Field, chose to continue paying rent but moved in with family in the suburbs to avoid going stir-crazy. She also wanted to stay away from public elevators and refrain from sharing common laundry areas to maintain social distance.
This pandemic could push some people over the edge if they have anxiety about health issues and live in high rises with common amenities,” Wright says. “Im prepared for the smaller moves, like helping people get out of the dense areas and make the transition from a condo in the city to a townhouse in the suburbs. It may be a few miles outside the city and wont have the nightlife, but it gets them out of the congestion.”
Freddie Mac forecasts that mortgage lending will rise this year and next on the strength of combined low mortgage interest rates and slowing home price growth.
(Photo: Bet_Noire / Getty Images)
Will more people move to the suburbs?
To be sure, economists say its still too early to tell if urbanites browsing suburban homes on sites like Zillow and Redfin and taking up temporary shelter in less densely populated areas will develop into a broader trend once the pandemic is contained. But recent sentiment among homebuyers suggests attitudes toward moving to the suburbs is shifting.
Robin Walpert, a real estate agent at Sothebys International Realty in Santa Monica, California, says activity has picked up among New Yorkers looking to buy new properties with home offices, gym space and land.
A couple with two kids from Manhattan are going “stir-crazy,” she says, and are looking to expedite their move to the suburbs in either Santa Monica, the Pacific Palisades or Brentwood.
“This family is bursting at the seams with impatience. They’ve been forced to work from home at the same time as they home school their kids,” Walpert says. “This pandemic has made them obsessed with getting out here as soon as possible so they have outside space and a pool rather than being stuck inside their high rise building.”
Jason Haber, an associate broker at Warburg Realty in New York City, says many of his clients are looking to rent homes in the Hamptons, Westchester County and even Miami.
The process has been different for each client, he says. Some clients say they love being in the suburbs, while others have been counting down the seconds to return to New York City. The bigger question some people are asking themselves, he says, is what will city life will look like in the future once the virus is contained?
The idea of people fleeing is always the boogeyman of cities. There wont be an exodus against the city,” Haber says. “Every time someone has bet against New York City, it has always bounced back, whether it was 9/11, the financial crisis, Hurricane Sandy or the blackout. Will some people leave? Probably in the short term, but for the vast majority that wont be the case over the long term.
The aftermath of the 9/11 terrorist attacks saw as many as 4,500 residents of Lower Manhattan, where the World Trade Center’s twin towers once stood, leave. But the population eventually rebounded, according to data from the New York City Department of City Planning. The population in the area increased by about 26%, from 34,700 in 2000 to 43,700 in 2005. That dwarfed the overall population increases in the rest of Manhattan and New York City, which grew in that span by 3% and 1.7%, respectively.
Downtown revival over?
Downtowns in many major and even smaller markets had enjoyed a revival in recent years. Younger generations like millennials were looking for more lively areas with access to restaurants and the ability to walk to work in areas like Buffalo, New York, Cleveland and Charlotte. Empty nesters sold large suburban houses to move to smaller dwellings, in or near cities, to enjoy amenities such as restaurants, museums and theater.
Life after the pandemic, however, could change that dynamic. Real estate agents say there has already been greater interest in the suburbs among people living in New York City, the epicenter of the pandemic in the United States, which may hint that more people could be seeking single-family homes in the near term.
During the pandemic, weve heard that realtors in northern New Jersey and Connecticut are seeing more inquiries from people who live in New York City on price points and whats available, Yun, the NAR economist, says.
But buyers could face hurdles with limited housing supply amid strong demand, driven by low mortgage rates and wage growth.
Amy Paternite, a real estate agent at Coldwell Banker in Maplewood, New Jersey, says activity has picked up over the past two weeks from clients who currently live in Manhattan and tight urban areas like Jersey City and Hoboken, New Jersey looking for properties in the leafy suburbs of Maplewood and South Orange. But theres not enough supply to keep up with demand because inventory is low. There are currently only 36 active listings in Maplewood, down from 61 a year ago, she says.
With interest rates so incredibly low, if you were planning on buying right now theres no reason to wait if you find the house you like, Paternite says.
3D home tours surge
Although the outbreak and social distancing measures have cooled the housing market for the time being, buyers, sellers and their agents have begun to change their behaviors to adapt to public health requirements.
New home listings have dropped sharply as the spring shopping season begins, down 27.1% from a year ago in the first week of April. But the number of 3D Home tours created on homes listing site Zillow has surged.
The number of tours created nationwide during the last week of March was 408% higher than an average week in February, according to Zillow. In March, listings with 3D Home tours received about 50% more site visitors and were saved about 60% more frequently than listings without 3D Home tours, the data showed.
Paternite, for instance, offers digital platforms for her clients to use when viewing homes, including virtual home buying and selling programs. She’s also used Facebook Live as an open house for sellers to showcase their properties for potential buyers.
People are becoming more conformable with interacting through video conferencing, which could push more employers to allow their employees to work from home in the future, experts say.
If thats the case, its another reason for increased demand for the suburbs because commute costs become less important when determining your residence, Yun says.
Read or Share this story: https://www.usatoday.com/story/money/2020/05/01/coronavirus-americans-flee-cities-suburbs/3045025001/