Wealthy Residents are Leaving New York City

• New Yorkers trading the metropolitan area for suburbs is not a new movement. "New York’s population decline has been building up before Covid," remarked Justin Hollander, an urban and environmental policy and planning professor at Tufts University in Massachusetts. In 2019, NYC lost "376 residents per day to domestic migration, an increase of more than 100 per day from the previous year."
• State-wide, New York saw the largest population decrease in the country in 2020: 0.65%, or 126,000 residents. As for New York City, data from the US postal service showed that 110,000 households in the area asked for a temporary change of address between March and July. A number six times greater than the same period in the previous year.
• "United Van Lines reports a doubling of the number of people looking to move out of the city, and real estate appraiser Jonathan J. Miller estimates that transaction volumes in New York suburbs were up 51% in July over the year before."
•  Unacast analyzed smartphones to determine the city's annual net migration. It concluded that the Exodus is not as intense, number-wise, as some assume. Between January 1 and December 7, 3.57 million people left NYC and 3.5 million moved into the city, resulting in a negative 70,000 net migration.
• The changes, however, are more profound than net migration alone. There is a significant difference in income and demographics between those leaving and those moving into the city. "Those 3.57 million people that have emigrated (left town) took about $298 billion dollars of income with them, whereas the 3.5 million people that have immigrated (moved-in) bring about $264 billion dollars of income to town. That’s about $34 billion in income gone in about 8 months of COVID-19."

 

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• Unacast's findings are backed by other studies. For example, a report from StreetEasy showed that rents dropped in high-end neighborhoods, including the financial district downtown but continued to rise in affordable areas. Meanwhile, house prices and sales rose exponentially in suburban areas, such as Hudson Valley's counties.
• A survey conducted with NYC's high-income earners (over $100,000) in September showed that 44% "say that they have considered relocating outside the city in the past four months, with cost of living cited as the biggest reason." Thirty-three percent believed they would not longer be living in the city within the next two tears.
• "The desire to leave New York City appears to vary somewhat by age. Of respondents 65 years and older, 76% have not considered moving out of New York City since the coronavirus pandemic began, compared with 49% of those aged 18 to 44. And while 72% of those 65 and older think that it is “not very” or “not at all” likely that they will leave the city in the next two years, 55% say the same among the 18–44 age group."
• Furthermore, mail-forwarding requests were "concentrated in wealthier neighborhoods — with three ZIP codes on the Upper West Side topping the list of spots seeing outbound migration. Other Manhattan neighborhoods drained of the most inhabitants include Murray Hill, Chelsea, Greenwich Village, and the Upper East Side."
• Data from the US postal office also shows that around 65,000 of the 110,000 households that requested a change of address were relocating (permanently or temporarily) to suburban areas in Long Island, Westchester, and New Jersey. "The ritzy areas of Scarsdale, in Westchester, and Greenwich, Connecticut, also saw an influx of new residents."

City versus Suburbs

• Unfortunately, data regarding the precise number of new residents in most suburban counties has not been updated yet. The most recent reliable information for Greene County, for instance, is from 2019. However, real estate activity and qualitative insights indicate a considerable change, driven by remote work, concerns about health and crime, the search for more space and outdoor areas, and cost of living.
• In the summer of 2020, sales of properties in suburban areas of NY rose exponentially, resulting in bid wars and instant sales. "In July, there was a 44 percent increase in home sales for the suburban counties surrounding the city when compared with the previous year, according to Miller Samuel Real Estate Appraisers & Consultants. The increase was 112 percent in Westchester, just north of New York City, and 73 percent in Fairfield County, Conn., just over the state border."
• For example, real estate firm Douglas Elliman publishes comprehensive reports covering sales and rent every quarter in different areas of the state. Looking at Q4-2020, it is possible to see that closed sales increased significantly in Westchester (+12.8% - Single family, Co-Op, Condo & 2-4 family), Putnam County (19.5% — Condo & Single Family), and Dutchess county (+7.4% — Condo & Single Family). Meanwhile, they dropped by 20.6% in Manhattan (Co-Op & Condo) and only increased by 5.9% in Brooklyn (Condo & Co-op, 1-3 family).
• The difference can also be observed in the median sales price, which increased by 5.1% YoY in Manhattan, 15% in Westchester County, 11.9% in Putnam, and 20% in Dutchess County. Property prices in Suffolk County, which gained 3,400 residents during the pandemic, "are up in every zip code, with an average increase of 7.2% over the same period" in 2019.
• CNN reports that sales started to cool off in Q4. "The suburban markets have already peaked," said Jonathan Miller, president of Miller Samuel. "But even though they are plateauing, in many areas, sales are still up double-digits from last year."
• Overall, entry level and mid-range homes are plateauing, while Luxury property sales are still going up in the suburbs. According to Miller, buyers noticed they can get more value for their money in the suburbs than in Manhattan. "The pandemic forced buyers to reset their thinking on local real estate markets, he said. Now what the suburbs offer -- space and privacy within occasional-commuting distances from New York City -- is highly valued."

Greene County

• Greene County is usually not included in reports and articles, probably due to its small size. It does not seem to be the main destination for New Yorkers, as research indicates they are more likely to favor suburbs that are less than one hour away. Nonetheless, evidence suggests that the county is receiving a large influx of new residents.
• As of 2019 (most recent available data), Greene County had 47,491 residents, with a net migration of 172, up from 104 in 2018. Nearly 59% of the population falls into the 18-62 category, followed by the over 62 group (23.7%) and under 18 (17.4%). The unemployment rate was 4.7%, and the median household income was $53,601.
• 2020 marked "the 11th consecutive year that Greene County sales tax receipts increased over the previous year, one of the longest such trends for any county in New York State."
• Greene County is "dependent upon tourism with 14.6% of all labor income and 23.2% of all employment sustained by visitors. If not for Tourism the average household in Greene County would have to pay an additional $1,333 to maintain the same level of government services."

Real Estate Market

• The pandemic had a positive impact on the real estate market of Greene County. The waves of new residents (temporary and permanent) in the county were so intense that it became a problem at the beginning of the year. At the time, Greene County urged New Yorkers to stay away from the area.
• According to local real estate agents, demand is outstripping supply in the area. One Century 21 agent explains that "Demand is high and inventory low, which makes for a seller's market, and it's a mix between turnkey residential and commercial properties and fixer-uppers and rehabs." She further adds, "We have some agents in our office that have been agents in the area for 40 or 50 years and no one has experienced anything like this, not even post 9/11." 

• According Pattie Meyers, founder of the county's Lake & Mountain Realty, LLC, "This is the busiest year post 9/11… I can’t even keep up and it’s not just me, it’s everyone in the Hudson Valley. The market is unprecedented, and I haven’t seen it this busy for at least 20 years."
• Real estate developments in the region are focused on sustainability and restoration. Second-homes are a big part of the county's real-estate landscape, albeit the pandemic drove many NYC residents to adopt the area as a base. Nonetheless, real estate developments seem to be trying to achieve a balance between residential and tourism. 
• The region has over 9,000 second homes across the county. As COVID-19 spread across the urban areas, many second homes became the main house of New Yorkers who are now working remotely. The Greene County EDC estimates that 4,400 new full-time residents were added in 2020 based on second homes alone, a significant number for a county with an estimated population of less than 48,000 people.  
• According to the New York Time, there is a wave of "newly minted developers who are bringing a new design aesthetic and eco-consciousness to rural towns within the orbit of New York City." One example is Jason Brown, who is working with a city-based developer to build homes "that draw on Scandinavian and Japanese influences on a 140-acre site in Greene County." This type of development was already happening in the region.
• According to the outlet, the pandemic has accelerated development plans in the Hudson Valley region, as investors are now more interested in the area. (A copy of the New York Times article is can be found in the attached Google Doc). 
• The boom is not restricted to residential properties. Since many New Yorkers are permanently moving to the suburban areas, sales and rent of commercial real estate are also increasing in the Hudson Valley region. "As of late January, 30 commercial real-estate sales were pending in Columbia County, Greene County and northern Dutchess County, said Raj Kumar of Select Sotheby’s International Realty. That is a sizable number for these towns, and more than four times the number of commercial sales that closed in the first quarter of 2020."

The Current Market

• A report published by Coldwell Banker Village Green Realty shows that, as stated by the agents, the real estate market in Greene County grew in Q4 of 2020 compared to the same period in 2019. For reference, single-family homes account for 73% of Greene's housing (75% for Hunter).

 

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• Q3 and Q4 showed strong sales and an increase in prices. Q3 saw many properties entering the market, the highest number in the last three years. Q4 saw a lower number of entries and a more limited supply, but an even more considerable buyer interest.

 

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• Hunter also experienced an increase in the number of listings, sales, and prices. It has above-average figures regarding the number of properties sold versus listings and prices for the county. For example, when it comes to median price, the town ranks among the top five in the county, with a median price of $371,000 for single-family houses in Q4 2020, losing only to Jewett ($459,000), East Jewett ($478,000), West Kill ($468,000), and Windham ($440,000).

 

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