Urban Dwellers Seeking Move from City Fuel Red-Hot Residential Market
By Brian Sweeney
The coronavirus pandemic that has swept through nearly every corner of the globe this year will have a wide-ranging impact that will forever change the world. As of this week, Covid-19, the disease caused by the coronavirus, has claimed nearly half-a-million lives, including more than 124,000 in the United States.
Those numbers continue to rise as a drug companies scramble to develop a vaccine and an effective treatment for Covid-19. By most experts’ estimates, a vaccine is likely still a year away.
On the economic front, the devastating impact of the pandemic is certain to last for years.
New York City was an early epi-center of the coronavirus outbreak, but is now in the midst of a phased reopening of its business sectors. When the enormity of the pandemic became apparent in mid-March, many metropolitan area residents felt the need to escape urban environments for the relative safety of less populated areas. The Catskill Region became one of those preferred destinations.
Many owners of second homes turned their rural residences into full-time sanctuaries. Other looking for safer havens have sought refuge at typically short-term rental properties — opting for multiple-month stays. Some upstate residents haven’t welcomed this unprecedented population influx, expressing fears of increased chances of exposure to Covid-19 and stresses on local health facilities and other services.
Unexpected boost
On the other hand, the population surge has provided unanticipated boosts for some regional businesses. Renewed interest for locally produced food has provided a major benefit to farmers. Probably no business has felt a greater impact from the pandemic than real estate.
Although real estate sales agents were only recently allowed to commence in-person showings, demand for Catskill Region property has been soaring since very early in the pandemic. Veterans of the profession are comparing the phenomenon to the post-911 attacks when unprecedented numbers of urban dwellers felt the need to flee to the country. In the nearly two decades since the attacks on the World Trade Center in New York City, much has changed. Among the most significant shifts is the advancement of computer technology. With many workers relegated to working remotely as a result of social distancing concerns, the ability to communicate from anywhere is seen as one of the key factors fueling the real estate boom.
The Catskill Chronicle reached out to several real estate professionals to get their observations of the current phenomenon.
Peggy Bellar and Meade Camp are the Catskill Dream Team, a Margaretville-based real estate company. Peggy said changes in their business were quickly apparent.
Re-evaluating
“There is a real shift in how folks are looking at their living situations and how they are reflecting on what is important, For many this ability to work from home puts a new emphasis on what ‘home’ is. The idea of the peace, the fresh air, the space and refuge of the Catskills has become very appealing,” she related.
Interestingly, the same technology that has people seeking to work from seclusion of a mountain setting has also played a key role in bringing folks to the region — even then when were restricted from visiting properties.
Peggy explained, “Before we could even do ‘in-person’ showings I did four back-to-back FaceTime virtual tours at one of our high-end farmhouse listings that resulted in a full-price sale. It was a difficult time for both agents and buyers, but people were really respectful and grateful that we were willing to figure out the best possible technology solutions available so that they could continue to look for their Catskill retreat.”
Now that properties can be shown again, Peggy said she and her staff are witnessing a tremendous amount of pent-up demand. She note that inventory is incredibly low and buyer demand is very high. She said the over one recent weekend, he company did 26 showings of a new listing that resulted in 13 offers.
Peggy indicated that setting up a remote office seems to be a theme many for many potential buyers to exploring as they re-think what ‘work’ may look like in the future.
“The pandemic has caused a seismic shift and folks are in the process of understanding what it means. However it seems clear that once things are fully open, life and work are going to look quite different. We are fortunate that our Internet access and fiber optic access has become so strong. It is a key factor in allowing people the possibility to actually consider this possibility,” Peggy explained.
She noted that large numbers of people are coming to the Catskills with the intent to have a second home and escape for the summer, while NYC and vicinity remain under much greater restrictions. Peggy said that many of these visitors are at least considering what it would look like to be here full-time.
From what she’s witnessed, Peggy expects this trend to continue.
In terms of demand, Peggy said there’s always been a historical sweet-spot of the “charming cabin on five acres” and that desire is unchanged. However, she said there’s been a dramatic increase in interest across the board, at all price points.
Between the lack of inventory, and the deep pool of prospective buyers, The Catskill Mountain Chronicle asked if many homeowners were getting the urge to take advantage of the demand.
This has been happening somewhat, according to Peggy. However, she pointed out that it’s been an odd time because many potential sellers who are second home-owners here have decided to use their houses for themselves and many homeowners have been reluctant to list too soon as they are exercising caution with people entering their homes.
“That being said we are getting calls, putting up listings, and selling them quickly!” she added.
She said that most buyers are primarily looking for existing homes, but her agents are starting to talk to more people who are considering land purchase.
In terms of pricing trends, Peggy said properties are constantly being adjusting as the demand increases. She said most new buyers are looking for a specific thing: they want as turn-key as possible (so they can get in and start using it), and are not looking for a project, and they will absolutely pay for that type of listing.
She said that, so far, this type of activity has not spread across all types of listings. She said there’s not yet been a rush for land, for large redo projects or even properties at the highest end.
“So far,” Peggy commented, “this rising tide hasn't really lifted those boats. It may come later in the summer?”
Longtime Margaretville attorney Carey Wagner said the amount of work in his office has increased dramatically in the weeks since the state started reopening.
“Real estate has started to boom like it hasn't since 2005. Many deals are being made the day a property is listed, often for more than the asking price,” he related.
Carey noted that after he closed his office on March 20 due to the pandemic, business continued at the usual pace, but the process was completely different. Whereas he used to meet clients at the closing; now, almost all closings have no clients present.
“Sometimes it's just me and the title company; other times, I give executed documents to the other attorney in advance and simply get a check for my client after the closing. So, the process has become more efficient, but less personal, which I miss. But I imagine this will continue as my practice continues,” he stated.
Ready to buy?
Christine O’Shaughnessy is a licensed real estate sales associate and works out of Coldwell Banker Timberland Properties’ Margaretville office. During her 15 years in the business, she has never seen anything like the current market.
The Catskills are hotter than ever right now! We are experiencing rather low inventory and I see listings go contingent at a faster pace than usual, not to mention multiple offers and bidding ‘wars,’” she commented.
However, she cautioned that the high rate of interest does not always coincide with economic realities.
“I would say that Covid-19 has certainly created a knee-jerk reaction and some folks have been rushing up to ‘buy’ properties and may not even be in a financial position to do so. I ask for pre-qualifications, or proof of funds, from everyone prior to showing them anything at all,” Christine explained.
She related that, when things first started, she took a pause, as did many folks. She kept in touch with prospective sellers as well as buyers, and said e-mails certainly did not stop coming in, just at a reduced rate for a while.
“Drive-bys were something that I encouraged as well as getting their financials in order. Once Phase 1 was in place, it allowed me to still conduct business as far as setting up showings, just in a very different way than I am used to,” she pointed out.
Asked if she envisions the continuation of the brisk pace of interest, Christine sees a lot of positives for sustained interest.
“There is no crystal ball for real estate, but with that being said, the Catskills have so much to offer at prices that are reasonable compared to some other areas,” she noted. “Many buyers who I have been working with are actually looking to move here full-time and work remotely with trips to the city, as needed. I have past buyers who have been referring me to their friends, coworkers and even family members. The word has gotten out, and it shows.”
Christine said that many prospective buyers are looking for, what she terms, the “Catskills Package” — a house with some land and privacy. She also sells a good number of village homes and said she’s noticed a higher percentage of buyers looking at them.
She pointed out the convenience of a village home suits many people as far as location, municipal hookups (sewer and water) and noted that many people like to feel a sense of community. She added that some older buyers seem to like not having to always drive everywhere and having a nearby country store and pretty park are important considerations.
“Primarily, buyers are looking for a key, in my opinion. I do sell land, but certainly not as much as homes. As far as building goes, with Covid-19, it seems to have become a bit more challenging starting from scratch,” stated.
The only drawback to the current rush of interest, according to Christine, is limited inventory. She said she’s lost count of how many buyers have contacted her looking for something in the $200,000 to $300,000 range.
“I always like to start early in my conversation, that inventory is low, things are moving faster so if they see something today that looks great, get in the car tomorrow and meet me for a showing,” Christine commented.
With high demand and low supply, Christine has witnessed a growing number of homeowners putting their properties on the market. She noted that a number of these are quite overpriced by ‘optimistic’ owners. She pointed out that pricing too high is OK, if there’s a cash buyer. However, a bank appraisal is required, owners need to keep that some deals will not move forward due to lack of comparable sales.
Christine said that, with the escalation of interest, prices have certainly gone up we’re clearly in sellers’ market. As we enter the historically prime selling season, she looks forward to seeing how things develop.
“The summers are always a busy time for us in real estate, but this has been a particularly strange and busy one. I wish us all to stay safe and enjoy the beauty of these mountains and remember to take a step back and take a deep breath,” Christine offered.
Associate Real Estate Broker Jill Ogden is perennially honored as being one of the top producing agents worldwide for Coldwell Banker. She works out of the Coldwell Banker Timberland Properties office in Delhi.
With the onset of the pandemic, Jill has witnessed the unprecedented interest in the region’s real estate.
“The Catskills Region that we work in has always been a mountain retreat for many, as well as a wonderfully scenic area to live in full-time. Since the pandemic, the demand for properties out here in the country has skyrocketed. It seems like anyone and everyone who was casually looking for a rural property prior to the pandemic, maybe waiting to purchase if just the right property happened to come along, has now made it a top priority to make a purchase now,” Jill related.
She indicated that many potential buyers are not just looking for a getaway, but having had the experience of needing to work from home and, with the realization that this is indeed a possibility, have decided that there is no time like the present to go ahead and make their home/workplace a much more picturesque and natural setting, and relocate to the Catskills.
“The area has such a mix of properties, with ‘something for everyone,” where everything from small land parcels to million-dollar luxury homes are selling. Proximity to the NY metro area is a factor in pricing and demand, with some still making a commute and many still using the area as a weekend getaway needing to be able to make the drive back and forth within a 2.5-3.5-hour timeframe,” she noted
Jill said while in-person showings were on pause, sales agents relied on video walk-throughs and video calls to sell properties, but now that they are fully reopen and people are emerging from their isolations, demand and urgency has escalated. In a market that had been leaning for a while towards the advantage of sellers with already low amounts of inventory, the heavy demand has created a market now where multiple offers are being received within days or sometimes even hours of a property coming on the market.
She noted, “Calls for ‘highest and best,’ and winning bids far over the asking prices have become the norm. I expect this will continue for some time as this pandemic has motivated many to re-evaluate their lifestyles and what is most important. More and more people are discovering the charms of what we love here: scenic landscapes, inspiring mountain views, peace and quiet, fresh real food from local farms and markets, and small towns – each with their own appeals, culture, wonderful people and opportunities.”
One such person the Catskill Mountain Chronicle spoke to asked that his name not be used, but shared his story for deciding to relocate.
The buyer said he I moved from Baton Rouge, LA to Brooklyn around 10 years ago. After a few years of settling in he got a bit stir-crazy in the city and drove up to the Catskills for a weekend getaway and fell in love. Since then, he’s visited in all seasons - originally camping in the state parks and then increasingly leveraging short-term rentals.
He explained, “When Covid hit and work from home was mandated, there was no doubt about where I would head. I originally booked a place in Delaware County for two weeks, which has since turned into three months. After chatting with my friends who got a place in the fall of 2018 as well as their realtor, Reg Oberlag (fellow LSU grad), I started looking in greater earnest around mid-April. Once the market heated up in June it was clear to me that it was time to make the move I've always dreamed of! In anticipation of the rumored bidding wars and following a failed low-ball tactic, I made an offer on a place at asking price and it was accepted.”
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