In some of New York’s most rural counties, the long dormant real estate market has been revived by city dwellers seeking respite.
In some of New York’s most rural counties, realtors are starting to see an increase in interest among city dwellers.
While there is no definitive data or statistics yet, Trip Pierson has noticed a change.
“Anecdotally speaking, there definitely seems to be a shift, with people with ties to the area moving out of densely populated areas,” Pierson said.
Pierson, who is the broker and owner of Mitchell Pierson Jr. Realtors in Canandaigua, said a number of recent closings on private properties have involved people from out of town, including larger cities such as New York City, Los Angeles and Chicago, to closer metropolitan areas such as Rochester.
“They’d rather live in an area that’s less densely populated,” Pierson added, emphasizing how companies’ increasing flexibility about where their workforce lives may have contributed to the increased interest.
“They can work through Zoom,” he said, referring to the video conferencing app, “and still be effective through whatever they need to accomplish.”
Mandy Friend Gigliotti, team leader with the Rochester-based Keller Williams Realty, also found an increase among people eager to move out of cities, with the consideration of school districts becoming less of a deciding factor.
“If anything, families who may have virtual schooling or homeschooling, their motivations to move for schools before are not as strong due to comfort for homeschooling or flexibility with virtual learning,” she said.
And for many prospective buyers, these decisions to move are more often than not permanent, Gigliotti added.
“A lot of their jobs also have given them additional mobility, that they were staying close to the city for work. So the fact they will no longer need to drive to work — they can move to be closer to family and the location that works for their life in general, and not just for their career,” she said.
According to Pierson, prospective homeowners “are looking to create a quality of life that we have been so fortunate to have for years in Canandaigua,” he said, mentioning how one prospective buyer from Chicago didn’t want a commute longer than 40 minutes, something Pierson said was easy enough to accomplish.
Another selling point for out-of-town buyers was the price point on many homes, Gigliotti said, which can be far more affordable than in the city.
“I talked to a family friend over the weekend who works in Manhattan for a software development company, came home to Rochester in March to get out of New York City during COVID and has been working remotely here ever since,” she said, referring to a story from another agent on her team. “The company has decided to let employees stay remote if they choose. So he’s in the process of looking to buy a home here.”
Renting has also become a popular option for many, with Pierson mentioning two renters from New York City and one from Boston who picked up one-year rentals, while keeping their apartment in the city.
“Back in March, we had an influx of people saying ‘can we rent, can we rent,'” Pierson said.
Homeownership remains rather strong, although a low inventory means high demand.
“We had a listing in Shortsville that had 33 showings and 22 offers,” Pierson said. “That is normally not the case. That did not happen a year ago.”
A post 9/11-like market
The rush comes after real estate sales were shut down for close to six weeks from mid-March through April as health officials abruptly halted commerce to slow the spread.
“It went from naught to 60 in a period of three months,” said Sean O’Shaughnessy of Coldwell Banker Timberland Properties in Margaretville, Delaware County, on the edge of the Catskill Park. “It’s a little head spinning because it happened so quickly.”
Richard Ranieri, an appraiser in Oneonta, Otsego County, said the current market is “sort of like 9/11, where people are trying to get out of the city.”
The lure: cheaper real estate and the spread of high-speed internet into less dense areas.
“Broadband is the key element,” O’Shaughnessy said, as buyers see the speedy digital connection as the critical to their escape to a rural and slower-paced lifestyle.
July numbers from the New York State Association of Realtors show decreasing housing supply and rising prices in counties within a 2 1/2-hour drive of the New York metro region.
Low rates also fuel sales
Sizable double-digit percentage price increases were evident in year-over-year median sales in Ulster, Columbia and Delaware counties, according to data collected by the state real estate association.
For example, in Columbia County, north of Dutchess, the median priced home sale was $370,000 versus $246,000 in July 2019. In Delaware, prices were up 40 percent to $215,000 from $154,000. Statewide, the increase in the median price was 4.4%.
Across the state, pending sales are up 40%.
“The volume of calls is way up,” Gross said. “The volume of showings is way up. A lot of these buyers are very picky.”
Also prompting the buying rush — plus a flood of refinancing applications — are, according to Bankrate, the lowest home mortgages rates in recent memory, averaging 3.14% for a 30-year fixed rate. That would result in a payment of $429 monthly for each $100,000 of mortgage, and 2.64% for a 15-year fixed —.producing a payment of $673 for each $100,000 of mortgage.
Is it sustainable?
Real estate inquiries in communities with names such as Andes, Bovina and Fleischmanns has not been this active since 2006-2007, said those in the industry.
“They’re now looking for places that are safe and away from everything,” said JoAnne McGibney of United Country Real Estate in Deposit.
But Ranieri, the Oneonta appraiser, wonders just how long the frothy market is sustainable. He said he’s seen some slow-down in August, hinting July activity may have been an aberration rather than an indication of further housing price inflation in face of higher demand.
“What’s on the market is being sold,” Ranieri said, saying his contacts indicates buyers are shopping for second homes, the traditional market in these outlying counties, rather than choosing to relocate entirely from the five boroughs.
These hinterland counties were often landing sports for retired firefighters and police officers. But buyer demographics have seen a noticeable change. Those in the market in these outer counties tend to be mid- to high-level corporate types who have become accustomed to the work-from-home routine, and expect it to continue well into next year.
It is now common for these rural homes to have multiple competing bids, O’Shaughnessy said.
In some ways, the price spikes, bidding wars, and brisk sales reveal dueling sides of the coronavirus pandemic. While lower-wage earners, concentrated in hard-hit industries like retail and hospitality, continue to struggle, higher-wage earners who are still employed are poised to take advantage of cheaper borrowing costs.
“The job losses are principally coming in the area of leisure and hospitality or retail sectors,” said Lawrence Yun, National Association of Realtors chief economist. “Those are lower-paying occupations so they are not really in the home buying market … The upper-income bracket, they are more stable in terms of jobs, and they’re trying to take advantage of these lower mortgage rates.’’
The pandemic may have also impacted the market because more professionals were able to work from home, cutting out the need to live close to the office and ramping up the desire for a larger, more comfortable space.
“Even as people go back to work, maybe it’s no longer five days a week,” Yun said. “Commuting becomes much less important.”
Additional reporting by Jeff Platsky, New York State Team, and Charisse Jones of USA TODAY.