New York City remains the most populated city in the US, with over 8 million people as of 2020. However, if current population change rates remain, the city may not hold this coveted title in perpetuity. At the onset of 2022, a National Movers Study found that, of the moves in the state, 63.1% were moving out while 36.9% were moving in.
Bloomberg likewise reported in June 2022 that, despite the NYC market having improved from its pandemic dredges, more people are still moving out of the city than moving in.
UrbanDigs, a data research firm focused on NYC real estate, paints a detailed picture of the market. Their weekly report from Oct. 24, 2022, compared local supply and demand over a four year period from 2019-2022. Supply levels that week sat at about 7,500 available properties, the same year-over-year point as in 2019 and 2021. However, all three points paled in comparison to where supply sat in 2020; before the end of that year, available properties eclipsed 10,000.
2020 simultaneously saw the lowest (approx. 6,000) and highest (just over 10,000) levels of supply. Conversely, demand was at its lowest during 2020: between May and October 2020, pending sales in NYC fell and remained below 2000.
This is easy to explain because of the COVID-19 pandemic; people were moving out of the city. Vacated properties freed up supply, but many understandably preferred not to live in a city. This is also supported by demand in 2021; it started at similar rates to 2020, but spiked around March-April 2021 and peaked, higher than any other point in this four year period, during July 2021, at which time fear had fallen thanks to the vaccine.
The New York City market has returned to a point of, if not stability, at least normalcy. What hasn’t returned, however, is all the people who departed the city during that time.
In the aforementioned Bloomberg report, many Manhattan expats moved away entirely, to cities such as Boston, Miami or Los Angeles. However, others remained closer to home, opting for areas such as New Jersey, Connecticut or Suburban New York counties such as Westchester and Suffolk.
A July 2022 study by the Hudson Gateway Association of REALTORS® tracked migration patterns from NYC to the Hudson Valley. During the first months of the pandemic, a total of 48,642 people from the five boroughs of New York City moved into the Hudson Valley, and 15,248 moved out of the region and into the city, for a net gain of 33,394 people in the Hudson Valley.
Now, the Hudson Valley has not proven immune to the problems on either a statewide (per Hudson Valley Magazine) or national level. Nancy Felcetto, a broker with Brown Harris Stevens, said that her local market faces the same problems agents and buyers across the country face: “The market is trying to find a balance, given interest rates, lot of cash buyers…but interest rates effect psychologically because you may want to borrow later.”
However, Felcetto added that the buyers of the Hudson market are highly varied: from old money to west coast expats, from widows to empty-nesters. Barbara Abram of Corcoran Legends Realty in Irvington, New York, concurred: “ every type of … you have people who want to stay in Westchester, people coming up from the city, relocating from California…” When asked if she’s noticed NYC residents moving to Hudson Valley, or vice versa, Felcetto said, “It’s both.”
A report by Piece of Cake Moving and Storage found that in 2021, the Hudson Valley and Westchester were more popular destinations for New Yorkers than Long Island. Of the Long Island expats, 15% chose Southampton and East Hampton, despite these towns only making up 3% of Long Island’s population.
Richard Rawdin, a longtime Hamptons-based seller with Coldwell Banker Realty, said that while his market remains a luxury one, the pandemic changed the reason many buyers wanted homes in the Hamptons. “A lot of people who were second home buyers became first home buyers so I would say that probably 70% now are primary residents, 30% are secondary residents,” said Rawdin.
What about buyers who left New York entirely, but stayed in the Tri-State Area and the orbit of New York City? Ginny Bonamarte of William Raveis, who sells in both Fairfield County, Connecticut and Westchester & Putnam Counties, New York, has that perspective.
“Now that Covid is kind of on the outs, we are not seeing as many New Yorkers move to Connecticut, which we had an influx during those 2 years. I think it was over 30 thousand New Yorkers moved to Connecticut, Fairfield County in particular and Litchfield County.”
Based on U.S. Postal Service Data (via Bloomberg), the number of New York-to-Connecticut migrants was even greater at around 50,000. Bonamarte added that, comparing the Westchester and Fairfield markets, the latter is the more active. Why? The constant reason why people choose where to live: taxes.
“I would say overall Connecticut has lower taxes than New York, especially Westchester County, where I do a lot of my business, Westchester and Putnam, and I think people are ok with moving over the border to Fairfield County to save the money,” said Bonamarte.
Speaking to Bloomberg, Connecticut Governor Ned Lamont painted a picture of satisfaction from those who moved from the Empire to the Nutmeg State. However, there is another wrinkle, one also concerning taxes. Connecticut residents who work remote for New York based companies owe a tax debt to both states. Unlike Governor Phil Murphy of New Jersey (another popular destination for New York expats), Lamont did not seem eager to change local tax laws to counteract this.
In another sign of people split between the two states, Bonamarte said New Yorkers who bought second homes in Connecticut are a common type of seller she meets:
“We’re also seeing the buyer’s remorse of, now that the pandemic is over, the people who moved from New York are trying to sell because they don’t want to maintain the two houses… people who already have the two houses, they’re selling the second.”
This buyer’s remorse is supported by national trends; a Clever Real Estate survey in August 2022 found that 3 in 4 of pandemic era buyers regret their purchase.
If this buyer’s remorse will cause a widespread return to the city remains to be seen. However, it’s clear that for their own satisfaction, buyers shouldn’t be hasty about where they choose to move.
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