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New Yorkers Are Fleeing to the Suburbs: ‘The Demand Is Insane’
New Yorkers Are Fleeing to the Suburbs: ‘The Demand Is Insane’ The pandemic is spurring home sales as prosperous city residents seek more space. One listing had 97 showings and received 24 offers.
A queue for an open house in Belleville, a New Jersey township west of Manhattan, on a recent Sunday. Many buyers have expressed worries about the health risks of living in crowded urban neighborhoods. Credit... Karsten Moran for The New York Times By Matthew Haag Aug. 30, 2020, 3:00 a.m. ET Over three days in late July, a three-bedroom house in East Orange, N.J., was listed for sale for $285,000, had 97 showings, received 24 offers and went under contract for 21 percent over that price.
On Long Island, six people made offers on a $499,000 house in Valley Stream without seeing it in person after it was shown on a Facebook Live video. In the Hudson Valley, a nearly three-acre property with a pool listed for $985,000 received four all-cash bids within a day of having 14 showings. Since the pandemic began, the suburbs around New York City, from New Jersey to Westchester County to Connecticut to Long Island, have been experiencing enormous demand for homes of all prices, a surge that is unlike any in recent memory, according to officials, real estate agents and residents.
In July, there was a 44 percent increase in home sales for the suburban counties surrounding the city when compared with the previous year, according to Miller Samuel Real Estate Appraisers & Consultants. The increase was 112 percent in Westchester, just north of New York City, and 73 percent in Fairfield County, Conn., just over the state border. At the same time, the number of properties sold in Manhattan plummeted 56 percent, according to Miller Samuel. Image Credit... Karsten Moran for The New York Times The suburban demand, driven in part by New York City residents who are able to work remotely while offices are closed, raises unsettling questions about how fast the city will be able to recover from the pandemic. It is an exodus that analysts say is reminiscent of the one that fueled the suburbanization of America in the second half of the 20th century.
It is not just crowded open houses, multiple offers and bids above asking prices. People in New Jersey suburbs who have no interest in putting their homes on the market are receiving unsolicited calls and knocks on the door from brokers asking if they want to sell. Of course, residents have left New York City for the suburbs for decades, especially to bring up children in towns with strong public schools. And it is very difficult to predict whether the new migration will continue at this pace once a vaccine for the coronavirus is available and office towers in the city fully reopen. What’s more, most New York City residents do not have the means to spend hundreds of thousands of dollars on a home in the suburbs.
Experts have predicted New York City’s demise during past crises, including the Sept. 11 terror attacks, only to be proven wrong. In fact, even as office towers in Manhattan remain largely empty because of the outbreak, some businesses, including Amazon and Facebook, are expanding their footprints, betting that workers will eventually return to their desks. Still, many companies and workers have become much more comfortable with remote work during the outbreak, suggesting that the suburbs will remain very attractive for the foreseeable future.
For now, many buyers in the suburbs are expressing concern about the health risks of living in densely packed urban neighborhoods. Facing pandemic restrictions, they want room that New York City often cannot provide: a yard for their children to play and an office to work remotely. Many want land, even if it means being farther away from Manhattan.
Some buyers have told brokers they are concerned about reports of rising crime in New York City, real estate agents said. (Overall crime has not spiked in the city, but shootings have, Police Department data shows.) “The people from New York are coming with a sense of urgency, and the thing they want is space,” said James Hughes, a real estate agent in New Jersey, who added that roughly 60 percent of potential buyers for his properties live in the city. “The demand is insane.” Zack Sterz and Zoe Salzman joined the buying frenzy in June. After 15 years in Brooklyn, they said they realized soon after the pandemic struck that their two-bedroom apartment with a backyard, generous by New York standards, was too small for working from home with two young sons.
Image Credit... Karsten Moran for The New York Times They could not afford a renovated brownstone in Brooklyn and were worried that New York City schools would not open for in-person classes in the fall, so they looked at New Jersey. They weren’t the only ones, their broker at the Allison Ziefert Real Estate Group warned them, suggesting they act fast. When a four-bedroom house in Maplewood, N.J., appeared on the market on June 12, they toured it on June 14 and two days later submitted an offer over the $799,000 listing price — the highest bid among many offers. The sellers accepted it. “To give up living in Brooklyn and move to suburbs, we just couldn’t see ourselves there,” said Ms. Salzman, 39, a lawyer whose office is in Manhattan. “But the pandemic helped make this choice for us.” The flight out of New York City could inhibit the city’s economic recovery and its ability to maintain quality-of-life services like the police and sanitation, said Maria Doulis, vice president of strategy and operations at the Citizens Budget Commission, a nonpartisan fiscal watchdog.
“What is worrisome is that the high-income earners, particularly those with more than $1 million, provide a substantial amount of resources to the New York City budget,” Ms. Doulis said. “To lose them would really represent 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 eventually return, though he appeared to be referring more to people who had temporarily moved elsewhere, including to second homes. “If you don’t think New York City is coming back,” Mr. de Blasio said, “then you don’t know New York City.”
Still, real estate agents across the region say they have been swamped with calls from New Yorkers who are rethinking their desire to stay. Moving companies have said they cannot keep up with the demand. Metropolis Moving in Brooklyn said the number of quotes for out-of-state moves jumped by more than 200 percent in May and in June compared with those months last year, and by more than 165 percent in July versus a year ago. Most people seeking quotes were moving to the city’s suburbs, he said, though others were moving to areas stretching from Washington, D.C., to Boston.
Image Credit... Karsten Moran for The New York Times Across New Jersey, more than 29,700 homes were sold in June and July, an increase of 33 percent over the same period in 2019, according to the Otteau Group, a real estate data and appraisal firm. Jeffrey G. Otteau, who is the president of the company, said the buying spree was particularly notable because it was happening when fewer homes were on the market. From the start of the year through July, the inventory in New Jersey dropped 40 percent compared with same period last year — a sign that many homeowners in the state were staying put during an uncertain economy.
“The demand has to come from somewhere, and we think most of that is coming from New York City,” Mr. Otteau said. “In some ways, this looks to me like the 1960s and 1970s, when there was a large outflow of the population pushing into the suburbs.” Mr. Hughes, the New Jersey real estate agent, said he had multiple clients who each lost bids on about half-dozen homes, including a two-bedroom house in East Orange that received 25 offers. It sold for $345,000 — 21 percent over the asking price. “It’s crazy for any period,” he said. For more than two months, Rennes Toussaint and her fiancé, Olajide Keshinro, have been looking at houses in New Jersey. The couple, who live in a 500-square-foot apartment in Queens, have submitted offers for four homes, but lost out on all of them.
Image Credit... Karsten Moran for The New York Times Before the outbreak, the couple discussed leaving the city for the suburbs, but never this soon. It became 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 would be easy, but it’s very, very, very competitive,” Ms. Toussaint, 33, said about the housing search. In New York’s Hudson Valley, the number of homes sold in July in Putnam County jumped 35 percent from the year before; they climbed 19 percent in Dutchess County. Melissa Carlton, a broker at Houlihan Lawrence, said the area’s picturesque towns and scenic views had long attracted second-home buyers and people who want weekend getaways. But New York City residents have recently explored the area for permanent residences. “Last year, people would say that a property may be too far away from the train station,” Ms. Carlton said. “That is not the case this year.” That is how Rehana Alam and Sadi Alam feel. They live with their three children — ages 9, 7 and 4 — in a home they own in Jamaica, Queens. It is a 15-minute commute for Sadi Alam, a podiatrist, to get to work. But the Alams have been concerned that her children have been largely confined to their home during the pandemic. Over the summer, the couple decided to get more indoor and outdoor space for their children.
On Wednesday, they closed on a five-bedroom house with a pool on two acres in Dix Hills, Long Island, about 30 miles east of Queens. “The best thing I could have done was provided them more space,” Ms. Alam, 35, said. “Looking at their sad faces, it just wasn’t worth staying in Queens.” Matthew Haag covers the intersection of real estate and politics in the New York region. He previously was a general assignment and breaking news reporter at The Times and worked as an education reporter at The Dallas Morning News. @matthewhaag A version of this article appears in print on Aug. 30, 2020, Section A, Page 1 of the New York edition with the headline: Fleeing the City Creates Frenzy In the Suburbs. Order Reprints | Today’s Paper | Subscribe