- With more companies allowing their employees to work remotely for the foreseeable future, people are flocking to
real estate apps scrolling for homes with more space. - Zillow has seen a tremendous uptick in visitors to their site.
- While many users are just scrolling aspirationally to pass the time in cramped quarters, some are looking to take advantage of low interest rates to buy their first homes.
- With so many people having the same idea, demand is high and inventory is low, and buyers are getting less than they expected in the
suburban andrural markets.
When her friends were fleeing Brooklyn to homes in upstate New York at the beginning of lockdown, Janet Huang and her boyfriend decided to stay put.
In the months that have passed though, she's found herself longing for an escape, constantly being seduced by ads for spacious homes and greenery.
"We decided to stay in New York because we really like our apartment. We started seeing that everyone was escaping to their cottage houses. People were on Long Island, or upstate," Huang said. "My boyfriend's mom got a cabin in Pennsylvania."
Seeing friends and family having rural hideaways to ride out the pandemic makes Huang jealous, she said, so she started clicking on a few listings for available properties. The more she clicked, the more ads she got and now it's like a hobby stealing her attention at home and, sometimes, while she works remotely.
It even prompted a weekend trip upstate to visit homes on the market, dreaming of a different life.
"We didn't go to the open houses, but just stared at them from the outside," she said. "Now we just spend a majority of our time looking at listings and I fantasize about conforming to cottage core life and becoming a dairy maid or something."
Huang's story is consistent with how many
Walking down a New York street, it isn't uncommon these summer afternoons to find masked young professionals seated together, iced coffees in hand, mulling over houses for sale on their phones.
Whether there is a real intention to abandon the convenience of city life for more space — or just curiosity about how far their urban salaries will go elsewhere now that working remotely is an option — people have been turning to real estate apps and websites at unprecedented rates since the beginning of the pandemic.
Jeff Tucker, an economist at Zillow, told Insider that traffic on the site in June was 50% higher than it was the same time last year. While it has mellowed a bit since then, it remains around 30% higher than normal.
"We are absolutely seeing a flood of extra traffic on Zillow and Trulia," Tucker said. "I think that certainly a lot of that is motivated by people interested in more space. A lot of renters are thinking about buying their first home at the moment."
Data collected by Zillow shows that there has been a significant increase in traffic from browsers in the New York metro area looking at homes in the regions of Stanford, Connecticut, Kingston, New York, the Catskills, and the Poconos.
And while there definitely are people, like those who Huang knows, who are leaving the city, Zillow data shows that even more people living in New York City are looking to buy their first home there.
In July, 66.3% of the people who are in the New York metro are looking for other homes in the same area.
To Tucker, that means that renters might be looking to take advantage of record low interest rates to buy their first townhouse or condo in the city.
Unlike in years past, people in New York have stopped being interested in other cities, like Atlanta or Boston, and are either looking at the suburbs or areas not too far from where they already live.
"The state isn't really showing an exodus, there might be localized cases, especially in the priciest parts of Manhattan," Tucker said. "But at the metro level, the share of New Yorker traffic looking at New York increased."
The great escape isn't as inexpensive and effortless as it might have initially appeared
When scrolling through homes, Huang was most attracted to large multibedroom places in rural areas that are listed for a fraction of the price of a studio apartment in Manhattan or Brooklyn.
One place that caught her eye was a 40-room mountain view home in Stanford, New York, that was listed at only $89,000.
At that price, she thought about how to build a new life, restore a historic bed and breakfast, and use the income to pay off her mortgage.
Living there would be far more peaceful than having to wait in line at Trader Joes in Brooklyn for three hours, like she would have had to do early in the pandemic, she thought.
In reality, though, Huang realizes that venture probably isn't as easy as a Netflix holiday-themed special might make it seem.
In fact, while there are some exceptions, people who are buying houses in the current market aren't typically getting a deal at all, realtors told Insider.
While there was a brief point in early spring, when home prices were low, demand is high and inventory is very low.
"There was sort of a widespread idea, I think, in the spring where people thought they'd get a really, really good deal by buying a home in the midst of the pandemic, but because everyone sort of had that same idea, it sort of was a self-canceling prophecy," Tucker said. "There was maybe a window where prices were a surprisingly good deal in May, but that window seems to have closed."
That's the case in Sonoma County, California, where realtor Margaret Schrock has seen record sales since January.
Sales have been on the uptick in recent years, where people in San Francisco are looking for more space and the outdoor lifestyle, but the pandemic has put it into overdrive.
The draw prior to the pandemic was the affordability and the lifestyle, particularly for people with young children who said 'We can have a yard and we can have nice schools," Schrock told Insider. "Now so many of the buyers I'm representing are people who realize 'we can work from home and don't need to live in these urban areas."
Her clients have worked in a broad array of industries, including tech, law, education, and business, she said.
Recently there were 18 offers made on one property that was selling for $650,000.
"To get 18 offers is really ludicrous, we really don't see that," she said.
Some people are looking for walkability and being a part of a neighborhood, while others are desperately seeking out space and privacy so if they need to shelter-in-place again, "they can have their own bubble," Schrock said.
Home offices are also key, she added.
The demand for homes in the area is so high, though, that many people are getting less than they expected for their price point.
"The demographic that has changed is that there are more buyers in the luxury price point," she said. "It's kind of crazy because among my colleagues, so many of us are representing buyers looking at homes above $1.5 million that were sitting months ago. We just don't have enough inventory because of that buyer demand."
Schrock said that the most important part of working with clients these days is to educate them about value.
"I'm educating them that just because we're outside of the city doesn't mean we're super affordable," she said. "A lot of people say they want acreage, and a house, and they want to raise alpacas. That's great, but what's your budget?"
That's the case nationwide, Tucker said. The average listing price of homes that are being viewed on Zillow is about double the national average home price of $252,000, he said.
In June, for example, the homes most commonly viewed were around $530,000.
"That definitely gets at this idea that people are doing a bit of aspirational scrolling," Tucker said. "The freedom to up and fly away from cities is something that only the really wealthy are seriously considering."
If you're looking to buy, it might be worth it to wait
Schrock and her husband already own a home, but before the pandemic struck, she had been considering investing in a second property.
Now that she sees firsthand the demand for homes right now, and knows that she won't get the best value, she's decided to hold off.
"We haven't seen the economic fallout of COVID-19. We have so many businesses struggling to stay afloat, like restaurants, bars, hair salons," she said. "They just can't make up that lost revenue."
"There are a lot of people who will be in distress, struggling to make mortgage payments," she added.
Schrock said that as time goes on, it's possible the housing market will shift in the buyer's favor.
"Our goal is to maybe just wait it out," she said.