Since June 10, when Realtors on Long Island were finally granted permission through Phase 2 to go out to show property, I have noticed an increase and uptick of calls from those living in New York City asking about the benefits of moving to Long Island, Westchester and even relocating out of New York entirely to other states.
Between March 1-May 1, 420,000 (5 percent) of the wealthiest in the city left based on an analysis of multiple sources of aggregated smartphone location data by Descartes Labs, Teralytics, and from a working paper by Arpit Gupta and Joshua Coven of NYU. When Mayor de Blasio closed schools after March 15, a greater number of the richest families exited the city after learning online could be accomplished from any location. Although there currently is no data as to how many have permanently left or have returned, many have had their fair share of the pandemic and are very concerned about when it will all end. My answer is when a vaccine is created and can be distributed, which could be as little as one year or possibly more.
Although at the moment there are no statistics on how many were leaving due to Covid-19, I am quite sure that was the major reason and I expect the loss of people will be great over the next one to two years. Our job as Realtors is to educate and guide clients through the process of finding what will work best whether selling or purchasing. I do see activity in New York City for those who will weather the storm and are what I consider “diehards.” But I see others who want a change of scenery as well as to find safer, more secure towns, with excellent schools to start or bring up their families.
Although some real estate taxes in New York City might be comparable to Long Island, there could be a much greater saving over not having to pay NYC income taxes, higher auto insurance, and most critical, the cost of excellent schools. For what you could purchase on Long Island and other towns compared to the city could be a bigger benefit for some depending on their income tax bracket and allowable deductions. Although I do not hold any degree in accounting or financial planning, I do quite a lot of research and I am always absorbing and learning while providing and conveying accurate information. But at the same time, I impress upon clients to always verify all information and run it by their CPAs and financial planners.
In a New York Times column on June 19 by Matthew Haag said “those that had come to the city in their 20s and 30s looking to build a career exited in a very rapid pace as the pandemic grew worse in March and April.”
He pointed out that workers under 35 accounted for more than 20 percent of the unemployment claims filed in New York State since late March. The lion’s share of furloughed or laid off workers were in the service sector. The city comptroller said arts, entertainment and Broadway laid off 62,700 workers and the restaurant industry shed 119,000 jobs.
Sadly, this catastrophic situation that has caused those to pack up and leave will have a benefit to Long Island and other areas. However, the benefit will be to those who owned in New York City and sold, who can afford to live on Long Island or if not in many other areas just outside Manhattan or New York state. I know several young couples in my area who were fortunate enough to sell and move out of NYC in 2018 way in advance of our current pandemic.
But over the last few months, I have experienced more and more inquiries about couples and families planning to relocate permanently. There are those who have not been laid off but were given the opportunity to work from home and for this reason, which made them realize that they are able to do their job or business outside the city. For those who will be coming back to work, many companies will have to reorient their office spaces to keep a 6-foot distance between each employee (while they still will have to wear a mask) and to accommodate much fewer people. The few companies that can afford to lease larger spaces will be in the minority.
The savings of money, time, and a better quality of life are major determining factors for those who want and can afford to move while being able to telecommute and still be gainfully employed. This unique and beneficial situation opens up the flood gates of opportunity for purchasers and more business for Realtors. Not being in an office environment will pretty much eliminate any possibility of getting infected, while at the same time not having to wear a mask while working at home. Even having children will afford more quality time, while at the same time if there are relatives in the area who can babysit, it could be another avenue of savings for working couples. The impact of the migration out of New York City to Long Island and other areas will be determined over the next few years.
I want to wish all my readers a safe, healthy, and enjoyable July 4th with family and friends.
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S). Just email or snail mail (regular mail) him with your ideas and suggestions on future columns with your name, email, and cell number and he will call or email you back. For a consultation, he can be reached by cell: (516) 647-4289 or by email: Phil@TurnKeyRealEstate.Com to answer any of your questions or concerns.