Your New Neighbor May Be from New York

 My new next-door neighbors are from New York.  They just moved in, and they are planning to telecommute from the shoreline. They have high-level jobs that can be done remotely, for the most part. They have little children, and no idea what schooling will be like in the near future.  They have bicycles, a boat, a pool, and a new second car.

My husband and I also have one adult child (accompanied by a boyfriend) sheltering with us.  They are also telecommuting from New York, with good jobs, now being performed remotely.  They aren't sure when their offices will reopen, nor whether they will soon--or ever--have to be physically present in those locations.  They have new exercise routines, new athleisure wear, new cooking accessories, and new disposable income from no rents, no bars and restaurants, and no travel.  They have started looking at houses online, and near us.  Many people we know have similar stories.

Our friends, many of whom are retired or working remotely, are planning ahead to spend time in another part of the country this winter, if they haven't already decamped to a vacation home.  They are renting for months at a time, and testing out possible retirement locations. Rather than use hotels, or try to travel, they are opting for staying put elsewhere, to have a change of venue safely.

You may have relatives, friends, and neighbors like this as well.  Over 10,000 New Yorkers changed their addresses to Connecticut in the second quarter of this year alone.  Anecdotally, we are seeing lots of real estate activity from out of state, and many NY license plates on the roads.  We all know that the pandemic is current, but it's somewhat of a surprise that more permanent choices are being made so quickly.  It's been great for our business, and it will be good for Greater New Haven as well. New Haven proper, although a city, is low in density compared to other places, and remains very attractive for those who want both proximity and outdoor space. After long years of population decline, it's nice to be trendy again!

What does this mean for the real estate market in our region?  Supply, which was already slim, is even tighter.  Prices, which were inching up, are moving more quickly in that direction.  Time on the market is declining.  All of this puts sellers in the driver's seat, and advocates for selling--or even renting for a season or a year--soon.  

Real Estate Advice for Connecticut from Around the Country

I've written many times about my group of friends around the country, who run large real estate companies, and meet regularly to share and discuss trends and ideas.  In many such settings, the learning decreases over time, and the value lessens.  Not with this bunch!  We are now meeting virtually, but we can still teach each other, and we always do.

Our last call focused, of course, on real estate sales during the pandemic so far.  Conditions have been very different at various times throughout the last few months, but all of us have faced lockdowns or restrictions that have affected the way we do business.  And, as it turns out, we've all adjusted to the new normal.  While not all of us are back to work physically, real estate is changing hands just about everywhere.  

One metric that has changed is the calendar.  Usually, 60% of listings come between April 1st and August 1st.  This year, April and May saw very little in the way of listing activity.  The summer seems to be making up for that, as the "spring" season is still going on.  Most of the drop in sales in the second quarter turned out to be from lack of inventory, as much as from the virus.  Sales in many places jumped just as the coronavirus first started spreading, and then dipped way down for some period of time, finally beginning to rise and then approach normalcy. Many areas saw closings up in the first quarter from 2019, then down 20-30% in the second quarter, with nothing left to sell by now.   Who could have predicted that?

New York City, which had somewhat of an exodus during its COVID peak, was another story.  Closings there were down 67% in the second quarter.  As I've reported before, 10,000 people changed their addresses to Connecticut in that time period, meaning that Connecticut could find itself well above the national curve for the rest of the year.  Again, however, inventory becomes the big question mark.  If we don't have anything to sell, there won't be sales.  Will sellers decide that this is their moment?  Some towns are finding that to be true, while others have experienced different results in varying price ranges.  Depending upon the location, the high end of the market is either very strong, or less strong than the rest of the ranges.  Only time will tell whether more listings will change that picture.  There is clearly every indication that Connecticut will see a bump from New York, for either primary residences, or seasonal escapes.  

Mortgage rates dipped below 3% for the first time in recent memory this month, adding fuel to the fire for buyers.  If they can buy, we think they will.  Open space is important, as are commuting possibilities; both of these factors help Greater New Haven.  Occasional commuting with lots of telecommuting put us well within the range for NYC-based employees.  Bidding wars are common, and listings are moving quickly.

Our advice is, for both buyers and sellers, to seize the moment.  Move while you can, sell while you can, and enjoy being outside while you can.  If there is one thing the pandemic has reminded us, it's that life is too short not to live it to the fullest.

Current Absorption Rates

Explanation of absorption rate: The rate at which available homes are sold in a specific real estate market during a given time period. If you look at the number for Guilford you can say “If market conditions do not change and if no new listings come on the market it will take 5.7 months for the current inventory to sell at the current pace of the market. A balanced market’s absorption rate is typically between 5 - 7 months.”