As New York City goes, so goes urban centers across the U.S., according to Ryan Schneider, chief executive of Realogy Holdings.
The coronavirus pandemic has pushed city dwellers and potential homebuyers to flee dense areas like New York and parts of California for suburban locations as Americans spend more time at home than before.
While the rotation from urban to suburban life is underway in certain parts of the country, interest is growing elsewhere, said Schneider, whose real estate company owns Century 21, Coldwell Banker and Sotheby’s International Realty, among other brands.
“In every urban geography, the web traffic of people and what they’re searching for has changed, versus six to 12 months ago, to be much more suburban,” he said Thursday on CNBC’s “The Exchange.” “Even in the urban geographies where that rotation has not happened in the actual housing purchase and sales yet, the consumer searching is going in that direction and we continued to see that through the whole Covid crisis in the last three months.”
Schneider believes New York, the initial epicenter of the U.S. Covid-19 outbreak, can serve as a bellwether for the rest of the country. Millennials, now the largest cohort of homebuyers in the country, have been a key part of the newfound urban exodus in the state.
As the coronavirus lockdown kept workers and families sheltered in their homes for months, interest in home improvement projects picked up and homebuying searches in suburban ZIP codes rose double digits — double the pace of that in city areas — as early as May when the housing market began to pick back up.
The trends have had a big effect on New York City’s home rental market. Apartment listings were up 85% year over year to more than 10,000 in June, according to data from Miller Samuel and Douglas Elliman. The vacancy rate was also at a record high north of 3.6%.
While Schneider says there is a different story being told in the homebuying market, where sales were up in June and the first week of July, uncertainty still abounds. Schneider did not say whether he believes that woes hitting the rental market will seep into the sales side, but he plans to remain vigilant.
“We’re watching it closely because we’ve seen the negativity of what Covid can do, both overall and in specific geographies, like what happened in New York City, but the momentum in the purchase and sales side of the housing market has been quite strong now for a few months,” Schneider said. “We’re obviously hopeful that continues, but we’re watching the Covid situation closely.”