TOPLINE
In New York City, the global epicenter of the coronavirus pandemic, homeowners are not putting their homes on the market: new sales inventory has hit a significant low during the months of lockdown as validated by real estate platforms Zillow, StreetEasy, local and suburban brokers and a moving company.
Brownstone facades and row houses in Brooklyn Heights in New York City.
Getty
KEY FACTS
New home listings on real estate platforms Zillow and StreetEasy in the New York metro area have been down by more than 70% in the weeks of the pandemic as compared to the same weeks last year.
The platforms and Douglas Elliman NYC real estate agent Monica Benhuri told Forbes that rental demand remains largely unchanged from last year due to people looking to move within the city—Benhuri notes this is driven by people in their mid-to-late twenties and early 30s looking to upgrade their pads as demand by recent grads migrating to the city for employment has dropped.
Similarly, New York City-based movers TikTok Moving & Storage is experiencing 60% less business amid the coronavirus pandemic; company president Ricky Sharma told Forbes the company was doing 100-plus moves per month pre-coronavirus—now, they’re doing around 30 moves per month.
Sharma said that for those who are selling their homes now, 80% of them are moving their belongings to storage units, not a final destination, showing the continued uncertainty for many city residents about where they will live in the future.
New rental inventory is also down from last year on StreetEasy, though new listings and new searchers in New York increase every week, as people look for places with more work-from-home amenities like outdoor space, StreetEasy’s economist Nancy Wu told Forbes.
“In the sales market people are taking a wait-and-see approach,” said Wu. “The big picture is: We haven’t seen much evidence that people are looking to leave the city permanently.”
Likewise, Frank Pignataro, agent and co-owner at Sailing Home Realty, which serves Long Island, told Forbes he has yet to see an increase in demand from NYC buyers looking to relocate to the suburbs.
On the other hand, New York City brokers are seeing foreign investors looking to park their cash in real estate and take advantage of the distress, Benhuri told Forbes.
Wu also notes that there has been no short-term change in prices of New York dwellings for sale or rent, but notes there may be fluctuation within a year, this is what happened with the city’s real estate market after the Great Recession and 9/11.
Critical Quote
“Like after 9/11 or the Great Recession, people will leave the city for a few months and then come back as the city bounces back,” said Wu. “There’s something about the urban preference. It’s really hard to make the tradeoff for a life in the suburbs when you’re used to this urban environment.”
Chief Critic
Daniel Norber, president of New York-based moving company Imperial Moving, told Forbes that business is booming with the coronavirus pandemic. In March, it was driven by students who fled from their dorms and apartments, hiring the moving company to pack their stuff via FaceTime and send it back to their parents’ homes in the suburbs. Now, the company’s business is shifting to families and older adults making moves from the city to sunnier provinces, with Florida and Georgia as the most popular destinations. “People are just trying to get out of the city,” said Norber.
Key Background
There has been much buzz in the media around New Yorkers vacating city dwellings in favor of suburban life. At the beginning of the coronavirus pandemic, this led to significant backlash from second-home and vacation town residents, who worried that the New Yorkers bring coronavirus with them. And it turns out, many did. However, the data from StreetEasy and Zillow complicates stories like this one that says more people are fleeing New York for permanent new homes elsewhere, which may be true, but it is not the case for most homeowners.
Further Reading
Travel From New York City Seeded Wave of U.S. Outbreaks (New York Times)
As Wealthy Depart For Second Homes, Class Tensions Come To Surface In Coronavirus Crisis (Forbes)
New York Reports Lowest Number Of Coronavirus Deaths As Two More Regions Reopen (Forbes)