I have been connecting my clients to agents all across Vermont, Westchester, the Hamptons, Upstate New York, and Connecticut. Mostly about buying- 95% about buying.
In addition to that, I am also getting updates from other clients that they are buying in all of the same areas above. Beautiful farms, wooded homes, the gamut.
Newspapers seem to be creating more clickbait than content right now, and it’s not worth your diving in to get hooked. I am reading truly hysterical articles about the death of urban real estate. It is overblown.
I’ll share a few thoughts about this moment, as people consider where they want to be for the first post-Covid chapter.
Florida and Taxes
Well, not one client has told me they’re pulling up stakes and moving to Florida. That is a pretty significant tidbit. At the end of 2017, as tax laws changed, everyone was focused on real estate taxes, State and Local Income Taxes (SALT) and their deductibility. And the prediction was that the migration from high-tax states like CT, NJ, NY would empty out. Yes, we have seen this, but why, then, is there almost no discussion about it now? I’ll just say that safety, security, and space seem to have won out over taxes or cost of living. At least today.
Selling at Asking Price
I am hearing about properties selling very, very quickly, from Louisiana to Maine, at high prices. Markets that had suffered for years and years are having their moment in the sun. I am happy for sellers. I am quite curious about buyers. They are buying homes that are FAR less expensive than where they normally live, and don’t seem to be questioning values. All I will say is that I wouldn’t want to be part of a bidding war in Upstate New York over a property that had been on the market for three years. These markets have long cycles- and more importantly, deep troughs. But low rates make the monthly costs looks pretty exciting for buyers. I get it, and of course I see the downsides.
Suburban Sellers Getting Overexcited
In the midst of call after call from buyers licking their chops at the prospect of buying in Manhattan right now, I have had a few conversations with sellers who are eagerly doing the same, at the prospect of selling their second homes all over. Think about it, if they’ve wanted to sell for some period of time, it can hardly be a better time than now, based on what I’m seeing. But will they end up overpricing? Possibly. I’m guessing a few will “test the market,” and a few may get close to their aspirational pricing.
Suburban Sellers Moving to the City?
It is DEFINITELY the best time to do this trade. I don’t expect too many people are going to do this right now, but it’s as clear as day to me that this is the moment. The courageous seller who has decluttered, donated, and gotten educated about the buy-side of the equation will have their time in the candy store, which right now is Manhattan Real Estate.
What Have I Left Out?
I have ignored, for this article, the unknown, which is really what the city sales prices will be. I don’t know yet. Our first week of reopening is in the books. We have seen a FLOOD of interest already, and an even larger flood of inventory coming to market. It is too hard to tell where prices will trend yet. I can’t help but think, though, that the prospect of getting a New York City apartment for 20-25% off 2016 prices will be attractive enough. I am getting calls from shocked buyers- they cannot believe where prices already are now, never mind what a final sales price will be. That enthusiasam cannot be discounted. And it will be an enticing call to come back to buy in Manhattan and Brooklyn.
Is it a trend?
Or is it a moment? My sense is that two years from now, there will be a lot of clients with second homes who didn’t have them before, and perhaps they will bring these clients a lot of joy. And they will look back on this time when they bought these second homes as a moment that made sense- at the time. I also expect a tiny bit of buyers’ remorse based on the prices paid for these homes.
Additionally, the intrepid buyers who made their move on Manhattan real estate right now will look back in two years and be very proud of the deals they struck. They will all look like good deals.
Suburbs may win the battle, but I do not see them winning the war. I expect to get a flood of calls the day the vaccine is announced, and that will be the turning point, Pickett’s Charge, if you will, in this battle of city vs suburb.