By Ralph Bivins (RNR) – Sales of Manhattan homes are down more than 50 percent since the coronavirus hit. Affluent people are leaving New York City in droves, heading to their homes in various garden spots. High taxes, the threat of a new billionaires’ tax, and political protests add to the downturn in the Big Apple.
New York’s evacuees may never come back. Even if a vaccine is developed for COVID-19, the fear of infectious disease will make New Yorkers think twice as they get on crowded subways or elevators.
With the work-from-home trend becoming entrenched in corporate America, New York City’s downtown, which has a vacant feeling already, may become a ghost town. Why come to the city?
Poor New York, right? Everybody is leaving. Well, it’s not just New York. A lot of major cities will be leaking population to the suburbs.
The work-from-home experiment is receiving a thorough trial-run during the pandemic. A few companies say they will go all-in and allow a majority of their staff to work from home all the time. Many other firms may allow employees to work at home for at least a day or two a week.
The result: The work-from-home trend will lighten the dreaded lengthy commute for urban office workers.
“Corporate workplace trends, such as working from home, have energized the suburban housing markets. Even employees who will work from home only one or two days a week in the future, are more open to suburban and exurban living,” says Mark Sikes, principal with Deal Sikes, a Houston-based real estate valuation firm. “As this trend plays out, attitudes about long commutes will change and homebuyers will respond by moving farther out.”
Community developers and home building firms are showing an increased appetite for lots and developable land in counties surrounding Houston, says Sikes.
New homes in the far-flung suburbs are becoming more attractive as home prices are rising and inventory is tight. Houston realtors just recorded their best month ever, selling 11,000 existing homes in July.
Mortgage rates have been hovering around 3 percent, Sikes notes, and all indicators point to a lot of home building and future growth in the Houston area suburbs.
Home building is surging across the nation. Housing starts were up 22.6 percent in June, the U.S. Census Bureau reported. The price of lumber has doubled since April. In the stock market, shares of home builders are rising fast. And home builder confidence is the highest in 35 years, according to the National Association of Home Builders.
Houston analyst Lawrence Dean of Metrostudy said Houston area housing starts were up 3 percent in the second quarter, even with the COVID drag in April and May. If builders can complete the year with no catastrophes, Houston could have as many as 31,500 single-family starts, a 3 percent increase over 2019.
So, if you’re selling land, lumber or houses in the outlying suburbs, 2020 may not be so bad after all.
Ralph Bivins is editor of Realty News Report.
Sept. 3, 2020 Realty News Report Copyright 2020
File: Urban exodus. Suburban migration.