New York City residents with cash are fleeing the Big Apple in droves and moving to nearby suburbs as the COVID-19 pandemic has enabled them to work from home while Manhattan office buildings stay largely empty.
Real estate brokers in the surrounding areas of the city including the Hudson Valley, Westchester County, New Jersey, and Connecticut are reporting soaring demand for houses in recent months.
Compared to 2019, there was a 44 per cent jump in the number of July home sales for suburban counties just outside of New York City, according to figures compiled by Miller Samuel Real Estate Appraisers & Consultants.
That includes a 112 per cent increase in Westchester County; a 73 per cent increase in home sales in Fairfield County, Connecticut; a 35 per cent increase in home sales in Putnam County; and a 19 per cent increase in Dutchess County.
In Manhattan, July home sales dipped by 56 per cent, according to The New York Times.
Before the pandemic, New Yorkers were willing to put up with cramped, tiny apartments and a high cost of living in exchange for short commutes to the office as well as easy access to the city’s cultural attractions and nightlife.
Since COVID-19 has essentially shut down much of the city’s museums, theaters, and sports stadiums, those with means are now buying homes that give them the comfort of working from home in larger spaces.
Some real estate agents said clients coming from the city have also expressed concern about the disturbing rise in violent crime in recent months.
There was a 162 per cent increase in the number of shooting victims and a 166 per cent increase in the number of shooting incidents during the four-week period that ended on August 23 compared to the same period last year, New York Police Department data shows.
From January 1 through August 23, there was a 95 per cent increase in the number of shooting victims and 87 per cent increase in shootings compared to the same period in 2019.
During the four-week period ending on August 23, the city recorded 48 homicides – a 50 per cent increase from the 32 homicides that were recorded during the same period last year.
Between January 1 and August 23, the city recorded 280 homicides – a 35 per cent increase from 208 homicides that were recorded during the same period of 2019.
‘The people from New York are coming with a sense of urgency, and the thing they want is space,’ James Hughes, a real estate agent based in New Jersey, told the Times.
‘The demand is insane.’
Hughes believes that about 60 per cent of potential buyers who have expressed interest in properties that he markets are New York City exiles.
Zack Stertz, Zoe Salzman, and their two young sons were living in a two-bedroom apartment in Brooklyn when the pandemic hit in March.
Since they were unable to afford a brownstone in Brooklyn, they decided to search elsewhere for a home, particularly since there was worry that schools in New York City would not resume in-person classes this fall.
In June, they outbid several potential buyers and purchased a four-bedroom home in Maplewood, New Jersey. Their offer of $799,000 was accepted just two days after it was listed.
‘To give up living in Brooklyn and move to suburbs, we just couldn’t see ourselves there,’ said Salzman, a 39-year-old lawyer who under normal circumstances works from her Manhattan office.
‘But the pandemic helped make this choice for us.’
The exodus from the city is so acute that real estate agents in the suburbs are reporting dwindling supply next to surging demand.
In East Orange, New Jersey, a home listed for $285,000 was shown to 97 potential buyers. It received 24 offers.
The offer that was accepted was 21 per cent more than the original asking price – approximately $345,000.
The values of properties in Kingston, New York – a quaint Hudson Valley suburb near the Catskill Mountains – soared by 18 per cent in the second quarter, or $276,000, compared to the same period last year.
That represents the biggest increase among 181 metropolitan areas in the United States, according to a report released earlier this month by the National Association of Realtors.
‘Every single deal I have is someone from Brooklyn or Manhattan,’ Amy Crossfield, a Kingston-based real estate agent and former resident of Brooklyn, told Bloomberg News.
‘You have bidding wars, cash offers and people rushing to put in an offer the day something comes on the market.’
New York City will have to wrestle with the economic repercussions of this trend, which is reminiscent of the large-scale flight from the five boroughs to the suburbs in the decades immediately following World War Two.
Experts have warned that the flight of wealthy New Yorkers will deprive the city of badly needed tax revenue to maintain services like police and sanitation that are vital if it hopes to recover from the COVID-19 pandemic.
‘What is worrisome is that the high-income earners, particularly those with more than $1million, provide a substantial amount of resources to the New York City budget,’ said Maria Doulis, vice president of strategy and operations at the nonpartisan Citizens Budget Commission.
‘To lose them would really represent a blow to the budget.’
Despite the grim outlook, however, Mayor Bill de Blasio says don’t count out New York City.
The mayor is predicting that those leaving will eventually return.
‘If you don’t think New York City is coming back, then you don’t know New York City,’ de Blasio said.