August 31, 2020
Last week, I caught up with a friend who lives in New York City. He told me that, rather than renewing his $2,000 per month lease for his small apartment in Manhattan, he is buying a home in Connecticut. When I asked him how he would handle a 90-minute commute he explained that he has been given no timeline on when his company will return to office working. Would he miss the walkability of Manhattan? In his brusque, recently acquired New York manner, he retorted, “Where is there to walk to?!”
He is far from the only former Manhattanite to be upping sticks and looking for a home outside the city. Though he is leaving the city for good, others are keeping their urban apartments and buying a second home upstate or in commuter towns. Whereas a second home would previously only have been used a handful of times a year for vacations or long weekends, many people are now spending much of their time in their “holiday” home. This pandemic has even given led to a revised name for such homes: they are now known as “co-primary”. The affluent seem to have moved away from trading up in the big city, to buying into this “co-primary” concept. For the next year or so this cohort will likely reside mostly in their new homes outside the city, and only use their city apartments occasionally as pieds-à-terre when they need to go into the office, meet clients or see friends. CNBC quoted one New Yorker as saying, “You move to the Hudson Valley and, once every two weeks, you have a two-hour commute. The rest of the time you’re commuting from your bedroom to your desk to the refrigerator.”
Realtors in areas like Connecticut, the Hamptons, and Hudson Valley are finding themselves busier than ever. The same is true for realtors in southeastern beach towns to which some Atlanta residents are migrating. Another driver for this second home boom is the difficulty of renting – many urbanites used to be able to escape for weekend trips to rental homes at the beach, but supply has been low since March because the families who used to rent out their second homes for additional income are now living there.
One last real estate trend we are seeing during this pandemic is the need for more space. Large home sales in the U.S. (homes with 3,000-5,000 square feet of livable space) are up 21% from last year. Families living in small studio apartments or townhouses are finding the small space does not work when they are spending all day there, with parents working and children learning online. Many cite the primary need for a larger home being the desire for a designated room (or two or three) to work. Others simply want more outdoor or recreational space.
While many real estate sectors like office, hospitality, and retail have had a tougher time this year, the second home market is doing just fine.