The migration from the city to the suburbs that took on greater urgency during the pandemic looks set to continue in 2021. In spite of falling rents in major metropolitan areas like New York City, families are opting to buy homes in residential communities where there are more amenities and space for the dollar.
The Milken Institute’s Best-Performing Cities 2021: Foundations for Growth and Recovery report measures economic virality in approximately 400 metropolitan areas and describes COVID-19 as an inflection point:
“The pandemic has had an outsized impact on cities where the economic effects of the current recession are exacerbated by high housing costs,” said Kevin Klowden, executive director of the Milken Institute Center for Regional Economics.
With employees working remotely, kids learning virtually, and many normal modes of entertainment still largely restricted, demand for homes in northern New Jersey communities remains incredibly strong. As a wave of city dwellers continue to leave the city, here are 5 housing trends to watch:
1. Health concerns and school shutdowns prompt a move to the suburbs
Even before the arrival of coronavirus, New York City was seeing an outflow of residents. According to Bloomberg, in 2019, the number of people exiting NYC reached 376 per day, an increase of 100 over the same period the previous year. These buyers were headed for the nearby suburbs propelling a 44% increase in suburban home sales in the areas surrounding the city by July 2020 compared to 2019. As you might imagine, COVID-19 has only served to heighten the exodus.
Although both Manhattan and northern New Jersey have seen their share of school closings due to the pandemic, the on-again, off-again virtual learning environment has made more living space a priority for families. A recent Harris Poll reports that almost one-third of Americans are looking for suburban dwellings in response to the pandemic, and this demand is leading to higher housing prices and tight supply.
2. Families seek more space—indoors and out
At the onset of the pandemic, many city residents found themselves restricted to small, cramped apartments. Almost overnight, the whole family started spending time at home, and a one or two-bedroom apartment could not accommodate working parents, virtual student learners, and indoor activities.
Homebuyers leaving the city wanted more bedrooms, increased square footage and office space, and room to work, study, or attend Zoom meetings with some degree of privacy. These families are snapping up homes in northern New Jersey due to the highly-rated area schools and access to the Midtown Direct train line into New York City for the days when parents need to head to the office. Once work patterns start to normalize, families will find themselves well-situated in conveniently-located suburbs with easy access to New York City.
3. Housing inventories and days on the market plunge in the NJ suburbs
The northern New Jersey housing market is currently a seller’s market—inventory is low, and demand exceeds supply. Maplewood, New Jersey, for example, is pretty typical of the housing market trends we see in our communities. The Average Days on the Market for a home have plummeted to 29 days in January, a 24% decline year-on-year. The Active Listings in January have fallen 45% relative to January 2020. South Orange, NJ, is another example. In January, the Average Days on the Market fell 59% to 16 days compared to January 2020. The Active Listings in South Orange fell 60% to 17, year-on-year.
These trends are similar across other communities along the Midtown Direct train line. So, city dwellers looking to move to the suburbs should expect tight, competitive housing markets, on-going bidding wars, and fast-moving inventory.
4. Renters leave the city amidst favorable financing opportunities
COVID-19 upended the job market, and the nature of the post-pandemic office environment is still unclear. As a result, many renters are rethinking pricey city apartments and looking at 30 year-mortgage rates that continue to hover near all-time lows. Property ownership and home offices provide flexibility should work-from-home or hybrid work schedules become the norm. Not surprisingly, favorable financing terms have been just the push many millennials needed to move into the housing market.
5. City dwellers go in search of outdoor space
For much of the pandemic, the only leisure activity people were allowed was spending time outdoors. COVID-19 shed a light on the importance of safe, outdoor spaces, especially for growing families. Because gyms were forced to close or restrict capacity, Americans purchased outdoor exercise equipment, began running, camping, and exploring the outdoors right around them. People in Manhattan found spending time outdoors more challenging, and as a result, started to consider the possibility of moving to the suburbs. Homebuyers coming to northern New Jersey are in search of parks, running trails, walkable towns and ballparks, and northern New Jersey has them all.
Are you considering leaving the city and moving to the suburbs? I would love to assist you. Please contact me for a town tour of any of our northern New Jersey communities. Call Victoria Carter on (973) 220-3050 or email: email@example.com.