In March, when the COVID-19 pandemic hit, buyers and renters in search of a “new normal” began thinking about leaving New York City for areas offering more space and less crowding.
The latest FinanceBuzz survey found that as COVID-19 caused record high unemployment, it also spurred interest in Americans wanting to move. The study found that 45 percent of those who were furloughed or laid off due to COVID-19 are considering a permanent move. Respondents said they are looking to reduce their cost of living (41 percent), live in a less populated area (29 percent), have more/better job opportunities (27 percent) and have a bigger yard or more outdoor space (27 percent).
Marc Brenner serves as broker of the Downtown Jersey City Nest Seekers International office. With 16 years of experience in real estate sales and mentorship of his agents, he has been seeing some changes in the market during the pandemic such as clients seeking space to move around both inside and outdoors.
“A lot of people from New York are starting to come over and visit Hoboken and Jersey City. It seems like their criteria is for more outdoor, open space because they feel cramped,” Brenner told NJBIZ during a recent phone interview.
Robert Rynarzewski, head of commercial real estate at Piermont Bank, said in an email that his firm consistently hears from New Jersey owners of residential rentals and for sale condos that renters and potential buyers are sitting in their New York apartments conducting online searches and doing virtual walkthroughs of properties in close proximity to Manhattan for a possible move.
Brenner believes that with the imposition of COVID-19 stay-at-home mandates, people realized their homes needed to become so much more. Houses became offices, gyms, schools and restaurants. He said his clients are looking for the best quality of life and looking to be able to spend more time with families or simply pursue new activities.
“They want a little more for their money at this point,” he explained. “Then they want to take advantage of what the rates are right now. We’re seeing a lot of people coming over really looking for outdoor and open space and just want the feeling, that if something happens again they have a home where they could go outside and they could be outside. And if they do work from home they can have a big office space.”
Rynarzewski shared the sentiment. “When the city shuts down and residents can’t enjoy the greatest amenities for living in Manhattan – parks, restaurants, shopping, walking to work – they naturally begin to question their residence and begin searching for new larger space in a submarket that gives them those options.”
Brenner also said that while Manhattanites are moving to Hoboken and Jersey City, those residents are moving to Summit, Short Hills, Warren, and even some Monmouth County towns.
“It’s kind of like a domino effect where the people from the city feel like we here in Hoboken and Jersey City have a lot of space, and the people here in Jersey City and Hoboken feel like the suburbs have a lot more space,” he said.
In response to social distancing guidance, Brenner’s firm created a virtual leasing platform, which allows prospective clients to view a wide variety of homes and apartment layouts via 360-degree tours, from the safety and comfort of home. When asked if the migration was comparable to the post 9-11 exodus both Brenner and Rynarzewski said it was too soon to tell but gave a little insight on the recent activity.
“People post 9-11 didn’t know what was going on, much like now. Maybe they were acting off of emotions, but they knew they wanted out of the city,” Brenner said.
“We don’t have specific stats to share as it’s a bit early to tell. However, we can look at subway ridership alone dropping from roughly 35 million average weekly rides to under 10 million,” Rynarzewski said. “Those stats alone show that people are not coming to Manhattan right now, even as the city begins the process for reopening. Workers, residents, and tourists are hesitant to come to Manhattan. Metro-North says ridership is down 94 percent. The Long Island Railroad is down 76 percent. Bus ridership is down 61 percent.”
Rynarzewski said no one knows if the currrent market trend now will persist, given the unprecedented nature of the crisis.
“Though the COVID-19 pandemic is unlike anything in our lifetimes, history tells us that a crisis like this will pass and we will come out of it even stronger. Over my own lifetime, I have experienced ‘black swan events,’ which seem to occur every seven to 10 years and leave an indelible mark on history and in our minds. But ultimately real estate, especially in and around the Greater New York metro area, always seems to endure and we remember who was there to help.”
Some amenities remain attractive to would-be home buyers. Some are looking to leave their city apartments because the amenities are shut down in the majority of buildings. Having their own home alleviates that problem because all the space is theirs.
Residential buildings are making efforts to continue attracting new tenants, offering leasing incentives such as free month’s rent or the covering of closing costs. 1 Park in Cliffside Park is potentially covering a year of maintenance fees and may also cover some closing costs and the cost of the title search.
There will be obstacles for the real estate industry given these recent uncertainties. But Rynarzewski said he believes there will be more opportunities for real estate owners and operators in the market to not only survive, but also thrive.