COVID-19 is one reason behind real estate sales spike
Fifteen days after Connecticut eased several COVID-19 restrictions in May and prospective buyers came for a tour, Tim and Nicole Connors got two offers on their house.
One was from a New York City couple with two young children; the other came from a fellow Ridgefield homeowner looking for more space. The Connors accepted the latter, which was for full asking price.
“It actually happened too fast,” Nicole Connors said. “We were planning to rent a place in Ridgefield until the end of the school year [the couple have a son who is a high school senior] before moving to Arizona. But we thought it might be six months or longer before our house sold. Instead, we had to find a place to rent and pack up everything in a hurry.”
Other Ridgefield sellers are also placing calls to movers shortly after listing their property. Following a sluggish spring, home sales have taken off this summer.
Consider: Of the 296 single-family homes sold this year, 139 closed in the last two months (72 in July and 69 in August), according to the Ridgefield Board of Realtors. The previous high came in June, when 33 homes sold.
“As of right now there are 151 houses waiting to close,” said Lonnie Shapiro, a real estate agent with Coldwell Banker. “A few might fall out but so far we are on target to have close to 500 closings this year. In all of 2019 we had 327 sales; in 2018 we had 330.”
“We had way more supply than demand before and now that equation is flipped on its head,” said Realtor Laura Freed Ancona, who works for William Pitt Sotheby’s. “My biggest challenge is getting buyers in the door fast enough to not miss out.”
The median-sale price of single-family homes in Ridgefield was $635,000 — the same amount as it was through the first seven months of 2019. At $741,536, the average sale price is ahead of last year’s $701,412.
What’s going on? A confluence of trends, factors and developments is benefiting sellers in Ridgefield and other suburbs throughout Connecticut and the tri-state area. Historically low interest rates are luring hesitant buyers off the sidelines; the inventory of available properties has shrunk, creating demand and bidding wars; and COVID-19 has produced an unforeseen migration pattern.
“It has been very busy ever since the COVID restrictions allowing in-person showings, photography and inspections eased a little in April,” said Karla Murtaugh, a realtor for Neumann/Christie’s. “Going into March, when the pandemic basically shut everything down, we were having a banner winter selling season. The weather had been mild and sales and prices were up over 2019. When everything was halted, it created a pent-up demand — both for people who had been planning moves and for those now looking for a way into the suburbs.”
According to Ridgefield real estate agents, the exodus from the five boroughs to the surrounding suburbs — a recent New York Post front-page headline described the city as “Land of the Flee” — is more than rumor.
“It is not urban legend but suburban fact,” Freed Ancona said. “We are seeing people coming in droves from NYC to escape apartment living where close contact with people is unavoidable. People are craving larger homes and yards where they can spread out and literally breath easier.”
“Many families were thinking of eventually moving, but the virus definitely helped to speed up the process,” Shapiro added. “When a family of four is living in a two-bedroom NYC apartment and suddenly everyone is home working and going to school that can get old very quickly. The parents were working on kitchen tables and in corners of the living room and the kids were on computers needing help with their homework and everyone was getting on each other’s nerves.”
When offices closed and employees began working from home, another door unlocked for the Ridgefield housing market.
“Ridgfield and the surrounding northern Fairfield County towns like Redding offer a ton of value compared to lower Fairfield County but weren't considered that accessible to people who needed to commute to NYC daily,” added Freed Ancona. “Now that more people have been working remotely and feel that will be the case indefinitely, this area has become a great option for people who might not otherwise have considered it.”
“The ability to telecommute and not have to be in the office is definitely a big contributor to people moving to the suburbs,” Murtaugh said.
Some Ridgefield residents who went away for the summer were able to turn their homes into a three-month cash cow. In addition to the two quick offers, Nicole Connors said she and her husband were offered $25,000 a month for a three-month (June, July, August) rental of their house.
“We had an incredible onslaught of people who were looking for summer rentals in May and June,” Shapiro said. “I had never seen anything like it. I personally had a $25,000 [a month] summer rental listing that rented for $28,000 [a month] to someone who didn’t even want to negotiate. He went way over the asking rental price just to be sure he didn’t lose the house ... ”
For realtors, COVID-19 safety protocols make the process of showing a home more complicated. But they have also yielded unanticipated benefits.
“So much has changed in our industry over the last few months, as basically everything you could imagine researching about a property is online now,” Murtaugh said. “We are finding people are really doing their due diligence before touring homes in person. They have so much information at their finger tips that they are well prepared.”
“COVID-19, believe it or not, has helped tremendously my ability to sell houses,” Shapiro added. “For one thing we are taking out fewer buyers, but better quality buyers. Now I only show houses to people who are serious buyers who have to have a pre-approval letter showing they are qualified for the price range they are looking in. Most homeowners do not want children or extraneous people in the house ... so the showings go faster. I also find people are more decisive and do not want to risk losing a house due to low inventory.”
Although homes listed under $1 million still sell faster, higher-priced sales are gaining steam.
“In the luxury market, we are seeing an uptick there that we haven’t seen in years, so it’s nice to see that market healthy again,” Murtaugh said. “We are also seeing multiple offers on many properties at all price points.”
“I have at least two high-end sales right now that the buyers have never even seen,” said Freed Ancona. “It’s hard for some people to get here in time to bid on something, so they are sending parents, friends, etc., with Zoom or FT [FaceTime] virtual showings.”
Home sales usually drop in the final few months of the year, as couples with children prefer to move before the school year begins. But in 2020 the unusual has reigned, and an upending of traditional real-estate cycles might be another change.
“I see no indication of anything slowing down any time soon,” Freed Ancona said. “Without a real clear end in sight for COVID and fear of the virus ramping up again in the fall and winter, people seem even more intent on buying a safe haven.”
“Typically, home sales do slow throughout the fourth quarter, especially after Thanksgiving,” Murtaugh said. “Right now, demand is still very high and we are busy. I think because a lot of schools and businesses are still working remotely, there will continue be increased interest in moving to areas like Ridgefield.”
“Unfortunately, New York City’s loss is our gain and that is not going to end anytime soon,” Shapiro added. “Living in a high rise is not a lot of fun [in] these COVID-19 days. Usually one person can go into an elevator at a time, which means you could wait forever to get the elevator to your floor, and then you have the issue of pressing the button in the elevator telling it where to stop. Now you need gloves for what used to be the simple tasks we took for granted. All in all, many NYC families are tired of it and many were planning to move eventually anyhow. This helped speed up the process.”