Robert GaccioneDirector of Commercial Lending
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As rental prices are steadily climbing, inventory and mortgage rates have remained low during the COVID-19 pandemic. The unprecedented circumstances have sparked a change in how people want to live. More than ever before, people are longing for additional space and more natural surroundings for the sake of their mental health and well-being as many are envisioning how they can work from home more in the long-term.
Resilience Found in the Market for Second Homes
The coronavirus pandemic has not only pushed apartment dwelling New Yorkers to seek more space and nature outside of the city, it has also untethered them from their downtown workplaces as companies have embraced remote working. The result is a phenomenon that boasts the benefits of “co-primary” homes:
“Secondary homes are more popular than ever. People may own or rent smaller homes close to their office. Buyers are realizing that they may not have to go to their office each day. Virtual jobs are in place and employers are seeing the positive results...Expansive, private yards and especially those with a pool are surely a winner! Bidding wars are more common than ever with some homes going in one day with five different competing offers. Everyone is enjoying being close to beaches, beautiful neighborhoods and homes.” (Pat Mayer, Diane Turton Realtors)
For those that are confident financially, instead of trading up in the city or simply purchasing a second seasonal home, these residences function more as equal homes to their current address. As the mindset shifts in how people think about a primary residence, we are seeing people lengthen the tether that connects work and home, allowing them to spend more time in an alternate residence. However, homes boasting traditionally desirable amenities have proven to have a tight grasp on their desirability:
“Whether someone is looking to purchase a vacation home for their own family or if they are looking to purchase a Vacation Rental with income potential, I usually direct them to the current towns with attractions and areas to kayak, paddleboard, restaurants, dog parks, running or cycle paths, and more.” (Kaycee Cavicchia, Jersey Shore Realtor)
A New Way to View New York
A new poll commissioned by Zillow and conducted by the Harris Poll has identified the top reasons why Americans are considering moving as a result of spending more time at home due to social distancing orders. The top three reasons cited are a desire for more outdoor space, wanting a home with more rooms, and wanting a home that is more affordable for the square footage it provides. The draw to enjoying a desirable location while getting the best bang for your buck has allowed Sullivan County to step out as a viable neighborhood those looking to purchase a second home near the city:
“Sullivan County has always been a Catskill Mountain Lake region; it is a second home market. Sullivan County offers more value as you receive a bigger property with less taxes than surrounding counties. It’s nature at its best and just a stone's throw to NYC!” (RoseMarie York, Stepping Stone Realty)
The shelter-in-place has and will forever change the way we see our homes as the value of privacy and personal space has increased tenfold in light of the recent pandemic. As a result, while second homes were once seen as a bonus, many buyers are now considering them to be an essential:
“This year has truly made people aware of the importance of family, friends, and enjoying life. The Hamptons, with all of its natural beauty, is the perfect place to own a second home and take joy in the ‘New Normal’. Walking the beaches, watersports, fishing or just relaxing at home has never been so appealing.” (Lisa Skoff, First Hampton International Realty)
Many are seeking both a change of scenery and different home characteristics when looking for a second home. The caveat is that affordable homes with more outdoor space and rooms are typically found outside of urban cores, which has led to a resurgence in the popularity of the Hamptons as well:
“The rebound in the Hamptons, after nearly two years of weakness in 2018 and 2019, shows how the coronavirus is remaking the real estate landscape, as affluent people flee big cities for the suburbs and vacation communities. While the Hamptons has long been the summer playground of the Manhattan elite, brokers say the current wave of buyers are making the Hamptons their main home, returning only occasionally to the city for meetings or events.” (Robert Frank, CNBC)
Consistently High Demand in New Jersey
For qualified borrowers with secure income or assets, now is a fine time to buy a second home in New Jersey. With interest rates hovering near record lows, buyers that are able to lock them in with a fixed-rate mortgage today can benefit from those low rates for decades to come:
“The demand for Shore homes is quite high. Both the rental and sale markets are strong. We are seeing multiple offers on many listings and homes that are priced appropriately are selling quickly...Overall, the high level of demand seems likely to keep inventory levels down for now. Presently, it’s a sellers market and it appears that it will remain so- at least until Election Day.” (George D’Amico, New Jersey Realtor)
The COVID-19 pandemic has reinforced the resilience of the housing market, and unlike prior downturns, the luxury and second home markets are leading the recovery. Quarantine orders and social distancing have put a new value on the extra space, prompting renewed interest from high-end buyers to find a second home that’s within driving distance of their primary residence.
The Desire for Properties in Pennsylvania
Outside of urban epicenters, second homes still represent a significant share of the market. As buyers are increasingly finding themselves able to work remotely, properties that were originally viewed as seasonal homes are able to be realigned closer to their primary residences:
“With businesses shifting to more flexible work from home options, millennials in New York and Philadelphia are looking for weekend properties within a few hours of their city. The Poconos is an increasingly booming market, with low inventory and many listings selling quickly with multiple offers.” (Christy Bennett, Coldwell Banker Preferred)
With circumstances that many have compared to post-9/11, low interest rates have led to a level of attainability and affordability of second homes that is seldom seen. The result? Buyers are taking advantage and they’re spending less time shopping around than ever before.
Continued Development of Florida’s Gulf Coast
The importance of inquiring with a real estate office when searching about an area where you’re looking to purchase has proven to be undeniable. While some areas on the Atlantic coast may be still navigating social distancing orders, areas along Florida’s Gulf Coast are ramping back up:
“Real estate is booming in areas such as Tampa Bay, which is why it has proven to be one of the safest ways to protect assets during a time when the economy shows such uncertainty as it is presently experiencing. Those purchasing are not only looking for a property to safely use for vacation purposes but have high hopes for long term appreciation.” (Julie Lasky Mueller, The Boutique Real Estate Company)
Ultimately, you are the only one who can decide if purchasing a second home right now is the best move for you. If you have the finances, confidence in your income, and believe a new or second home would improve the quality of life for your family, now could be a great time to make such a purchase that might bring solace in the days to come.