New Yorker interest in North Carolina real estate increased in April
New York City residents don’t appear to be as interested in searching for real estate in the Big Apple as they were a year ago, according to search data from the real estate company Zillow, and North Carolina seems to be on the receiving end of their changing search habits.
Charlotte and Raleigh — the state’s two largest cities — ranked among the top 20 metro areas seeing the largest upticks in real estate searches from New Yorkers when comparing April 2020 search data to April 2019, according to data that Zillow compiled for The News & Observer.
Charlotte ranked 13th and Raleigh 14th, Zillow found.
Jeff Tucker, an economist at Zillow, said that inward looking real estate searches in cities like New York and Boston have “shrunk pretty significantly” in the months since the coronavirus has caused widespread lockdowns and a slumping economy. Both of those cities have been hit tremendously hard by the virus.
Keeping an eye on big cities
Tucker said Zillow has been monitoring internal searches of some metro areas in recent weeks in an attempt to gauge whether people are looking to stay there in the long run. Internal searches in New York and Boston have fallen more than in cities like San Francisco and Seattle on the West Coast, Tucker said. New York-originated searches for New York City real estate fell 5.36 percentage points in April, according to Zillow.
Real estate professionals in the Triangle have been wondering whether the intensity of COVID-19 in New York and other densely populated cities could lead to a wave of people moving south. In the past two months, tens of thousands of New Yorkers have set up mail-forwarding requests to other cities, The New York Times reported.
While the data is interesting, it is likely premature to know what it means, Tucker said.
“It’s still too early to tell how much of that impact has to do with the lockdowns,” Tucker said. “Right now in New York or Boston ... I’m not sure that home shopping is important or how much of it has to do with them not wanting to settle there for the long term.”
Still, the migration from the Northeast to more suburban and sprawling metro areas was already underway.
“Migration outside of New York and the Northeast, that was a trend already,” Tucker said. “The story of the last 20 years is the growth of places like Raleigh, Charlotte and Atlanta ... all of which have been developing a more suburban layout than the pre-automobile cities of the Northeast.”
So if more New Yorkers move to the Southeast in the next six to 12 months, it would just be an acceleration of that trend. “These are the places where new homes are being built,” Tucker noted.
Tech, schools and medical businesses attracting workers
Sharon Webb, a real estate agent for Coldwell Banker Advantage who operates mainly in North Raleigh, said she and other agents have been speculating for weeks whether the coronavirus will drive more out-of-state people to Raleigh. For years, agents like her have helped workers moving here from the Northeast to take jobs at local universities, in the medical field or at one of the Triangle’s growing tech companies.
“The next six to 12 months, we are going to see a lot of (people relocating),” Webb told The N&O earlier this month. “People just don’t want to be on top of all these other people right now.”
According to Zillow, the five out-of-state cities generating the most Raleigh real estate searches in April were New York, Atlanta, Washington, D.C., Boston and Chicago.
In Raleigh, so far, the coronavirus has not slowed the real estate market as much as many anticipated it would. Home prices are still rising here, as the inventory of new homes for sale continues to shrink. And after pausing operations for weeks, internet-based real estate buyers, like Zillow and Opendoor, have resumed buying homes in the area.
Triangle home sales are up from 2019
From January through April, closed sales in the Triangle are up 6.9% compared to last year, according to Triangle Multiple Listing Services numbers.
“Overall, we are surprised by how many homes we have seen sold,” Jennifer Coleman, a real estate agent for Coldwell Banker Advantage in Cary, told The N&O earlier this month. “And when homes do come on the market, they sell very quickly.”
Coleman said a lot of people have only done virtual home tours before buying — and many of the people purchasing homes right now can’t afford to wait because they are relocating to the Triangle for work or something else.
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Zillow said it saw a 600% increase in the use of its 3D Home tour technology in April compared to February. Tucker said virtual tours used to be a niche service, but he expects it will become standard practice for the foreseeable future.
Zillow is forecasting home prices to fall 2% to 3% nationally by the end of the year — though regionally the numbers could look different, Tucker noted.
For those looking to buy a home in the coming months, he added, the lack of inventory is going to make it harder to find the perfect home and could increase competition among buyers. The real estate market, he noted, will be buoyed by low interest rates and the fact that the large millennial generation is aging and becoming more interested in buying homes.
“A lot of those millennials are in their early 30s; they have one or two little kids at home,” Tucker said. “If they are in an apartment, they are feeling cramped. A lot of people could be really hurting for more space right now.”
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work. Learn more; go to bit.ly/newsinnovate
This story was originally published May 20, 2020 at 1:28 PM with the headline "New Yorker interest in North Carolina real estate increased in April."