New Yorkers Fleeing City Hunt for Million-Dollar Suburban Homes

(Bloomberg) -- Wealthy families who escaped New York during the pandemic are ending up in the city’s suburbs, competing for a scarce supply of homes in the commuter towns of New Jersey, Connecticut, Long Island and Westchester.

The open houses are held on video, and the real estate agents wear masks and gloves. But that hasn’t slowed the inquiries and offers. Many of the buyers are city dwellers with young children and budgets of $1 million to $2 million, agents said.

One recent weekend, Ann Hance, associate broker at Daniel Gale Sotheby’s International Realty who specializes in the north shore of Long Island, held five virtual open houses and sold three of the homes within a week.

“The demand in my community is outrageous,” she said. “Young families are coming in droves. We’ve had bidding wars.”

Many of the buyers aren’t in New York anymore. They’re living with parents or in vacation homes far from the city. Two clients of Kristin Gildea Fox, broker associate at Christie’s International Real Estate, are moving to New Jersey without ever returning to their city apartments. They’ve hired movers to pack up and move everything to their new homes, she said.

For these buyers, there’s a premium on homes that are empty and ready to be occupied.

“People want immediacy,” said Hilary Levy, a Coldwell Banker agent in the Westchester town of Dobbs Ferry. “The urge is now, not three months from now.”

Meanwhile, Levy added, local inventory is low because many older Westchester County homeowners who might have downsized are holding onto their suburban spreads, at least for now. Many are hosting adult children or college students who have moved back in since the pandemic began.

The exodus of affluent families will only add to the woes in New York City, where the virus has killed more than 20,000 people. The outbreak has been an economic calamity for the city, which thrives on tourism and live entertainment, knitted together by once-crowded subways. New York’s population has been slowly declining since 2016 and now that trend could accelerate, worsening local budget problems.

In Greenwich, Connecticut, the most popular homes are listed below $2 million, said Halstead agent Rob Johnson. The buyers in this range are generally people who had been renting in the city -- meaning they don’t need to worry about selling an apartment at this difficult time. Many have young children, but not all, Johnson said.

“I’m seeing more people who don’t even have children yet,” he said.

Desperate Buyers

Some wealthier New Yorkers, with higher price points, have also told Johnson they’re interested in buying in Greenwich this summer. But he said many are now holed up in comfortable vacation homes, in the Hamptons and elsewhere, so they’re looking online and asking questions but don’t seem to be in a rush.

More desperate to buy, agents said, are families with young children in uncomfortable living situations -- squeezed in with in-laws, or sheltering in their city apartments, which are now doubling as offices and schools.

“They want green space,” Hance said. “They want access to amenities.”

Commuting time used to be the key question for many suburban buyers, but Fox said that has changed as employers have become more comfortable with remote working arrangements. Wall Street banks, for example, are preparing for offices to accommodate only a fraction of their pre-pandemic staff. Citigroup Inc. is considering leasing suburban office space.

Bounce Back

After the terrorist attacks of September 11, 2001, many suburban real estate markets had a similar surge of interest. The city soon bounced back. Landlords and brokers are pointing to that previous rebound in arguing Manhattan will survive this downtown too.

“After 9/11 I thought the same thing, I thought people would never want to live downtown,” said Lloyd Abramowitz, a financial adviser at Cerity Partners in New York. “We know how that all worked out.”

Still, the pandemic has fueled anxiety about apartment life. Sharing elevators and air ducts with their neighbors is suddenly a problem and Abramowitz’s clients, who tend to have assets of $15 million or more, are looking to get out of the city.

Even so, buyers don’t want to stray too far, anticipating a day when Manhattan springs back to life and they travel there for work or shows, at least occasionally.

“People still look at New York City coming out of this still being the cultural center of the world,” Abramowitz said. “But perhaps they don’t want to be surrounded by a lot of people all the time.”

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