SINCE shortly after the pandemic began in the U.S., the mass media has gorged on the supposed city to suburbs migration angle. I say supposed because there are a number of complicating factors and spotty data making it difficult to discern whether it’s a torrent or a trickle. Every year there is a migration of some for the burbs, with the bulk of that bell curve moving when school lets out in the summer. This year you also had some that pulled forward that decision, which should create a vacuum in years hence under ‘normal’ circumstances. The additional demand from that ‘pull forward’ is probably enough to lead to bidding ‘insanity’ as described in the NYT title below (link). That’s because unlike toilet paper there’s no way to instantaneously increase supply, which is made more acute (and drawn out) given the strict zoning in NYC suburbs, especially versus say Dallas. Once you net out the two sets above, I think the absolute numbers of those leaving NYC and buying a home1 in the NYC suburbs is smaller than the hype, if solely because of the incremental supply issues. 2
More curious though, is ‘who’ is vying for and paying up to live in the suburbs this year? Prior to the pandemic there was a lot of aging inventory curing on the listing services and not even receiving discount bids. Back of the envelope a year ago assume a 15% discount to the offering price versus today at a 15% premium to the same offering price, and you’re looking at a 35% increase3. Who knows, that may look prescient five years from now, but for many people it’s an awfully big price to pay for what is frequently their biggest investment ever. Worse yet, for those who are swapping out an apartment they own in the city, they’ll take a considerable hit in their selling price versus a year ago, especially if they’re in a rush. And even renters need to reconsider the city v. suburbs calculus given the softening in rents – in the city, NOT in the suburbs. In summation, those longing for the suburbs might want to rewrite their playbooks if money is an object. As for those ‘winning’ the bidding wars in Northchester, Farfield, 495-Island, and the home state of Tony Soprano, the good news is it also comes with a Darwin Award and unlimited free trades at Robinhood.
New Apartments In The Suburbs Attract New Yorkers – downtown Glen Cove shuts down ~7pm
Renderings Revealed For 21-Story Tower In Back of the Ravel Hotel – 42-11 9th St.