New York City has always been a place of opportunity and significant growth as long as anyone can remember. Millions of Americans have moved in the city from the suburbs causing the period between 2010-2020 to be termed “The decade of the city” by the Brookings Institution.
With this unprecedented growth, New York City has become a thriving hub of culture and innovation. But in recent years, the trend has started to change.  People who moved to the cities in their early 20s are now raising a family. They have reached this new life chapter, and are considering a change.
At the same time, the cost of living in New York City and its 5 boroughs has increased drastically and made some areas unaffordable. Many residents cannot afford to buy a home, and rent takes a significant portion of a person’s income. Rent cost in Manhattan was about $4,211 per month, according to a recent survey, prior to COVID.
As NYC residents started to have their own families a migration started to smaller metropolitan areas and small towns. Folks were looking for more affordable places to live and more space than what New York City was able to offer. 2nd tier cities like Hoboken, N.J. and Jersey City, N.J. have seen explosive growth in recent years.  In fact, Jersey City, N.J.  saw a population growth of about 9.17% population from 2010 to 2018 as people fled New York City. Bloomberg even noted a 2,700 person per week exit prior to COVID.

COVID-19 increases the NYC exodus

The coronavirus and the pandemic lockdown quickened that process. NYC residents experienced the disadvantages to living in a high-density area during a major disease outbreak. Residents were essentially stuck inside a high-rise apartment or a townhouse with limited space for months, and realized that the high-density city is the perfect place for a virus.
NYC dwellers realized the city’s pandemic disadvantages and saw the advantages of moving to a place with less density and a larger piece of land.  For example, a recent study that six in 10 Americans would consider moving away from densely populated areas to protect themselves from a potential second wave of COVID-19.
To further explain this trend we searched online to find what real estate professionals were saying about this NYC exodus. Here are a few quotes of interest:
Normally, real estate purchases in New York City boroughs account for 75% of the total purchase volume, but that trend has not continued in 2020. In the spring of 2020, sales in outlying New York City areas (like New Jersey, Upstate New York, and Long Island) experienced significantly more growth than urban areas. The pattern is most noticeable when compared to New York City  zip codes.

Growth in the Remote Workplace

Part of the reason that people have the ability to move out of New York is the increased use of teleworking. The teleworking trend started well before the pandemic and the lockdown, but the COVID crisis quickened the process. During the lockdown, estimates show that about 50% of the workforce worked from home. Many NYC workers want the opportunity to continue even if their office is reopened.  A recent study found that 29 percent of NYC workers expect to continue working from home when the pandemic ends and 27 percent believe they will be able to work at home at least part of the time.
Retirement is also part of the trend to move to more rural and suburban areas. This has been happening for several decades as the baby boomers retire but the pandemic could increase the trend. The coronavirus impacts older people to a greater extent, and some are concerned about going back to an office in an urban area. As well, many older Americans have lost their jobs, and they are deciding that now is the best time to retire.

Low housing inventory creates shortages

In recent times, supply is the challenge for many people who are looking to move out of New York City. Housing demand was already tight in many of suburban areas (like New Jersey, Long Island, Connecticut, and other tri-state areas), but the exodus from New York City put immense pressure on the already limited supply. One of the reasons for this is because homeowners may be hesitant to put their homes on the market due the huge amount of uncertainty.
“I think it’s the beginning of a shift in household behavior,” said Ken Leon, director of equity research at research firm CFRA. “These are residents of high-rise living, in mostly urban markets, who are more actively looking for the suburbs for single-family homes — both for growing families because the millennials are aging and also for safety in terms of COVID-19.”
That has led to many people to build a new home or renovate an existing home instead of moving right in. Many home buyers are looking for a piece of vacant land to build a custom home or are interested in moving into a subdivision currently under construction. The growth is particularly strong for people who are first-time home buyers who are looking at the entry-level market. Some research has shown that the demand for new construction in 2020 is being driven partially by renters who want to purchase a home outside the city.

What can you do if you live in post-pandemic New York City?

You essentially have three choices if you are considering leaving post-pandemic New York City.
  • Option 1 is to look for a home which meets your needs today, without being concerned if the market is high or low.
  • Option 2 is to wait until the market cools off, before leaving New York.
  • Option 3 is to stay and enjoy the many benefits New York City has to offer.
If you do ever decide to leave post-pandemic New York City, we would be happy to help you find your dream home in New Jersey.

“Coming from Manhattan, we (my partner & I) were a bit uneasy in doing a full renovation at our NJ home. Frank at Home Architect Studio proved to be an excellent advisor on our journey to a new suburban home. “

~J.L.
Maplewood, NJ