Suburban NYC Homebuyers Press On With Return-to-Office in Flux
(Bloomberg) -- New Yorkers are still swapping their tiny city apartments near subway lines for suburban abodes with backyards, even as employers signal they eventually want workers back in their Manhattan offices.
Home purchases in places like Greenwich, Connecticut, are topping last year’s exuberant highs, while properties in New York’s Hudson Valley are setting records for how fast they find takers. In New Jersey, one appraiser sees at least another year of soaring prices as a result of relentless demand.
The frenzy to acquire a home in the suburbs, which began as a way to isolate from crowds at the pandemic’s onset, is strong as ever, with buyers seizing on a cultural change in the way they’re able to live and work. While companies tinker with the how and when of restaffing skyscrapers, employees are filling the void with their own plans. They’re buying housing that meets their budget and space needs first, and figuring out what that means for their office return down the line.
“Some people know they never have to go back, and a lot of people are up in the air,” said Ken Wile, a Redfin agent in Westchester, the county just north of the city. “The plan is now they’ll be going in two or three days. I haven’t heard of many people who are going back five.”
Lee Maicon and his wife spent the past year and a half working from their two-bedroom Brooklyn apartment, occasionally sharing the tight space with Maicon’s teenage sons and their online classes. As their lease neared its end, they started making plans to move.
Maicon, 48, global head of strategy at the advisory firm Edelman, is back in his downtown Manhattan office twice a week, and he eventually expects to travel for business again. His wife recently started a remote job with a California-based company. And they just had a baby.
After seeing colleagues and friends move to distant places like suburban Philadelphia, the couple started their own search. They cast a wide net in Westchester, including the northern towns of Armonk and Chappaqua, but concluded they couldn’t quite commit to going that far. With Wile’s help, they settled on a four-bedroom home in New Rochelle, which they closed on this month, within days of their daughter’s arrival.
“It’s big enough that if we’re both working from home, we can have the kids there and not trip over ourselves,” Maicon said. “It’s an opportunity to create options while still acknowledging the reality of going to the office a few days a week.”
Westchester, appealing for its leafy, small towns and easy rail access to Manhattan, has been especially popular with urban exiles. Single-family home sales soared 56% in the second quarter from a year earlier, the biggest annual increase in a decade, according to Miller Samuel Inc. and Douglas Elliman Real Estate. The median price surged 16% to a record $826,500, as 47% of deals closed above the asking price -- also an all-time high.
Those searching for affordability farther out are finding plenty of competition. In New York’s Dutchess and Putnam counties, typically weekend-home areas that don’t lend themselves to daily commutes to the city, prices are setting records. So is the swiftness of deals -- about two months from listing to contract.
Home shoppers are also flocking to the more-rural Catskills region, said Joseph Satto, founder of brokerage Fresh Air Realty.
“These buyers have reallocated their resources,” said Satto, who often meets potential clients in Brooklyn, where he also lives part-time. “They say ‘I was going to spend X amount on a place in the city and get a small country place, but now I’m flipping the script -- I’m going to get a nicer place in the country.’”
A typical plan being mapped out by some of his urban-based clients is to spend at least Friday through Monday working and living in the Catskills, while spending midweek in the city, sometimes in an apartment shared with others, he said.
In New Jersey, heated demand is set to push home values up 12% this year, and an additional 3% in 2022, according to a projection by appraisal firm Otteau Valuation Group. Contracts in close-to-the-city Bergen County jumped 16% this year through July, compared with the same period in 2020. In farther-out Middlesex and Somerset Counties, deals were up more than 20%.
Much of the demand from urban buyers is “nowhere near a train line,” according to Jeffrey Otteau, the firm’s president.
“No one knows the answer to how far back the pendulum is going to swing” on return-to-office plans, he said. “Employers are tiptoeing on this right now.”
A strong labor market is also upping the swagger of those who are buying houses without clear guidance on their employer’s return policy -- many of which are still shifting as virus caseloads creep up again with the highly contagious delta variant.
In a spring survey by career site FlexJobs.com, 58% of respondents said they would “absolutely” look for a new job if they couldn’t continue working from home. Many people paying for access to the site’s employment listings signed up recently, after their current bosses rebuffed their requests to continue remote work, said Brie Reynolds, career development manager at FlexJobs.
Even if employers “make a policy now and say, ‘All right, you’re coming back in September,’ is that really going to happen? No one knows,” said Wile, the Redfin agent in Westchester. “The confidence of people knowing that they’ll find another job -- I’ve never seen anything like this.”
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