Coronavirus breathes life into real estate.
NEW CANAAN — Optimism for real estate in the area was at the forefront of a forum of four real estate professionals and Darien’s first selectman — saying the area is seeing a boom in home buying from people leaving New York City as it has been seen as a hub of the coronavirus pandemic.
There was also confidence expressed that New York City will come through the other side of the pandemic OK.
The panel was held during the virtual 4 p.m. New Canaan meeting on May 19. The Zoom virtual meeting is a new tradition every weekday since the state has been under stay-at-home orders. It is usually hosted by Town Council Chairman John Engel, an agent at Halstead Connecticut, LLC.
The panel was made up of Greg Heym, a chief economist for Halstead real estate; Steven Kligerman, executive director of development marketing for Halstead Property; Arnold Karp, a Fairfield County developer; Jayme Stevenson, first selectman of Darien; and Scott Hobbs, president and owner of Hobbs Inc.
“I think everybody is going to come out of this fine in time. I think that it is a great thing about this region, there is something for everybody within an hour’s drive,” said Heym, who writes a market report each month.
How good is it?
The real estate professionals seemed to agree that real estate in Fairfield County is benefiting from people’s desire to leave New York City — with 14 of the 16 towns in Fairfield County doing better in sales than last year.
“All of the sudden we are getting a lot of phone calls on renovations, restorations of older, tired houses in Fairfield County, Westchester County, that weren’t being looked at, quite honestly, three months ago,” said Karp, who has 12 projects ongoing in the region and is builder of The Vue, previously known as Merritt Village.
“We are seeing more people coming out from the city in order to raise their families,” said Hobbs, whose company does work ranging from small maintenance buildings up to $35 million-plus projects in the tri-state area.
“Each market is different, and New York City is run on mass transit and if you want to socially distance, it is very hard to do,” Hobbs said.
Stevenson, who has been Darien’s first selectman since 2011, said, “I think people are going to move out of the city,” and explained why.
“Healthy living, I think, is going to drive the day, at least for a while,” she said. People will want “a little bit of space, a little green grass, so you can get outside.”
“I do believe we will benefit tremendously from folks who are looking for that environment,” Stevenson added.
During “this very unusual time of eLearning, the parents are going to be shopping around for the school districts that have been able to smoothly implement a really good eLearning program,” she said.
“Nobody has a handle on what is coming in the future,” Karp said. But “we are seeing not only people that are coming out using existing inventory,” they are interested in embarking on new projects.
Some people are buying because they are “wanting to move closer to their grandchildren,” since flying is restricted, he added.
“We are not getting 3 percent a month appreciation as we did in the past,” Karp said. Yet “As Jayme (Stevenson) said earlier,” in this environment “I think people are realizing” that “a little bit of fresh air is a good mix.”
Families leaving NYC will be back
Kligerman, who represents New York real estate interests, defended the future of home sales in the city but acknowledged “business is still off 70 and 80 percent in the last six weeks.”
However, his company represents buildings with 20 units to hundreds of units, and “no one has scraped a project that I know of, no one has put anything on hold.”
“In general sales volume is down,” but New York appears on the verge of recovering. “Each week our number of virtual tour requests has steadily increased, and our number of offers has increased,” Kligerman said.
“It is undeniable that this event is going to have impact on the real estate,” he said, and he expects the impact to last the next two or three years.
“I think the giant unknown is when does New York City return to some semblance of normal, because New York City under shutdown has no museums, restaurants, ball games, theaters, and all that is very different from normal,” Hobbs said.
“If it turns to normal soon, it [the downturn] may be somewhat fleeting.”
“Our best point of reference that we have, unfortunately, is 9/11, when people fled from lower Manhattan in particular,” Stevenson said. After leaving, “the vast majority of those families actually returned to the city.”
She hedged that by saying, “This health crisis is even different than 9/11,” because people may be given “the latitude, moving forward, to work from wherever they are,” which would benefit the suburbs.
“I think once we get people” they will want to stay, because “life is easier in the suburbs,” Karp said.
“I share the optimism on the suburbs,” Hobbs said. “I think New York City will lose something in the short haul, but again, if this is relatively short-lived, under six months to a year — New York City has proven so resilient over time,” and “it is just a real special, interesting place that will continue to draw people.”
To sum things up, Engel said, “When that massive bucket [New York City] leaks a little bit of water to Connecticut,” it is enough to “profoundly” impact Fairfield County, without doing irreparable damage to itself.