New Yorkers may be fleeing the Big Apple for the suburbs, but these suburbs look very little like white-picket-fence versions most of us envision when we think of suburban life. Instead, city residents are opting for newly developed apartment buildings and condo developments that are bigger, offer more indoor and outdoor space than their urban counterparts, and are still conveniently walkable.
“COVID-19 removed, in the short term, a lot of the things in New York that made it the reason to be there,” said CEO of Miller Samuel Real Estate Appraisers & Consultants Jonathan Miller. However, as urbanites have left the metro area for the suburbs, many are seeking to replace the lifestyles they enjoyed in the city proper rather than make a lasting change. Apartment complexes and condo buildings are popping up to meet this demand, with rural and suburban communities seeing skyrocketing demand for new units with more space, good views, and balconies.
Vacant apartment numbers in Manhattan are skyrocketing as well. In fact, there were more than 15,000 vacant units in the borough in August. This equates to a vacancy rate above 5 percent, reported real estate firm Douglas Elliman along with Miller Samuel. Traditionally, that rate has fluctuated between 1.5 percent and 2.5 percent.
“Because of COVID, renters are looking to go into the outer boroughs to get more for their rental dollar if they are staying in the city,” said Miller. “Other would-be renters in Manhattan are [now] the first-time buyers in the suburbs.” Median rents in Manhattan have also fallen about 4 percent, to just over $3,300 a month. He predicted many renters would make permanent decisions about where to live that would be driven by affordability in the coming months, which is not good news for Manhattan. “Over the past few years, we’ve passed the affordability threshold,” he said. “With the loss of the ability to comfortably use all the amenities that characterize living in a city – restaurants, retail, bars, all the cultural events that were at your beck and call as a resident of Manhattan, people are questioning it.”
There are plenty of new developments in the suburbs hoping to provide at least some of those amenities – along with increased square footage – to city-dwellers seeking a longer-term escape from the urban life. In Stamford, Connecticut, for example, which is located on Long Island Sound, developer Building and Land Technology has reported welcoming “scores” of New Yorkers to its newest tower, with about a third of all new leases coming from the Big Apple. The developer has three more buildings under construction.
“The pandemic has turned into a real driver of demand,” said Ted Ferrarone, co-president of the company. “Interest across all our properties slowed for about three weeks at first, but then traffic really ramped up.”
As one new suburbanite explained after signing a lease in one of these new developments along with several other New York friends, “I’m honestly sad to leave the city, but…we’ll have a balcony. We are paying much less for almost double the space.”
Are your properties benefiting from the urban exodus?
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