Heading into the spring sales season, the housing market in the suburbs of New York has already gone into overdrive, with bidding wars becoming the norm and many homes selling within days of coming on the market.
The frenetic sales activity — a second wave after a surge last summer — has been fueled by multiple forces: historically low mortgage rates; pandemic-fatigued city dwellers desperate for more space; and many employers’ willingness to embrace remote work, allowing buyers to look in places beyond what would be considered an easy commute.
Another major factor: unusually tight inventory, as people hold onto their homes longer, which over the last few months in some suburbs has led to demand outstripping supply for the first time since the pandemic began.
Brokers across the region report long lines at open houses, multiple offers coming in as soon as listings go live, and all-cash deals ruling the day. “This is the strongest market I have seen in two decades,” said Sara Littlefield, an agent in Connecticut with Coldwell Banker.
“If there is a silver lining in this devastating pandemic, it’s that it has allowed people the freedom to make lifestyle choices like relocating, or downsizing, or moving up,” Ms. Littlefield added, “and they’re taking that freedom.”
At the same time, Manhattan’s housing market has also finally picked up. “Contract activity first broke even back in December with year-ago levels,” said Jonathan J. Miller, a Manhattan-based real estate appraiser who also monitors suburban markets. Then it rose in the first two months of 2021, he said, adding that he expected the strong pace to continue through the spring.
In a just-released February report for Douglas Elliman Real Estate, Mr. Miller found that signed contracts for all property types in Manhattan jumped 73.1 percent from a year ago. “It’s a combination of softer pricing, low rates and the distribution of the vaccine — people are feeling more safe about living in the city,” he said.
Jeffrey Otteau, the president of the Otteau Valuation Group, based in Matawan, N.J., agreed that once-depressed urban areas would recover. “I don’t think anyone expected people would leave the city,” he said, “and never come back.”
For those buyers focused on the suburbs, here’s a glimpse at what’s going on throughout the region.
Brisk could describe the weather and pace of sales in Westchester this winter, as the single-family sales market builds on its 2020 gains, from Pelham to Scarsdale to Armonk.
A shortage of single-family houses explains the heightened competition. Starting last fall, demand began eclipsing supply, according to a new report from Douglas Elliman, and signed contracts have picked up since January: The busiest brackets have been houses priced from $1 million to $2 million, with $600,000 to $800,000 a close second.
Among the crop of deals that closed this winter, the time from being listed to going into contract had shrunk to just two months, according to Julia B. Sotheby’s International Realty, though brokers say that spread can be misleading because much of the time is eaten up by overworked bankers and lawyers completing paperwork.
In actuality, some houses are finding new owners shortly after hitting “coming soon” websites.
“Buyers think they are buying at the peak, but at the same time, they’re still doing it,” said Jennifer Meyer, a Compass agent, who received an offer on a six-bedroom Tudor-style house in Pelham, listed for $1.275 million, on Feb. 26, two days after it went live.
Low interest rates and scarce inventory, which are national trends, explain some of the local spike in demand and prices. But other factors are also in play.
After spending extended time outside of New York to avoid coronavirus, lockdowns and street protests, some buyers warmed to the idea of full-time nonurban life. Troy Benson, 37, who owns a marketing firm, and his husband, Nolan Fitzgerald, 34, who works in fashion, so enjoyed the months spent in their weekend house in Orange County that they decided to stay out of the city for good.
After selling the vacation property — in two days, for 15 percent more than its asking price — as well as their condo in the South Street Seaport, the couple are in contract for a midcentury modern house by Edgar Tafel on six woodsy acres in Armonk last listed at $2.475 million.
“New York is very high energy,” said Mr. Benson, who will scale down his time in his Manhattan office to just a few days a week. “But I think a lot of people get addicted to the energy and get stuck.”
Recent converts to Westchester, brokers say, also include New Yorkers facing expiring leases on the rentals they escaped to last spring and who are now angling for more permanent addresses, further pressuring the market.
But it’s not just transplants who are being squeezed. Last year, Marialena Pulice, 39, a school psychologist, and her husband, Chris, 39, who works in finance, made offers on 15 houses, most of which were rejected. “We were outbid, or the seller would go with somebody who had a bigger down payment,” Mr. Pulice said. “Houses were being scooped up left and right.”
Late last year, a three-bedroom house in Hawthorne, listed at $589,000, caught the eye of the couple. But their above-ask offer of $595,000 was not enough to seal the deal — at least until the first buyer backed out. The Pulices, who have a young son, have been staying with Ms. Pulice’s parents and will move into their new home this month. “I really can’t wait,” Mr. Pulice said.
“The spring market really began in October — that’s how crazy it’s been,” according to Vicki Gaily, a real estate agent based in Saddle River, N.J.
As soon as pandemic restrictions eased, Ms. Gaily, the founder of Special Properties, a division of the real estate firm Brook Hollow Group, noticed a burst of pent-up demand, largely from people fleeing urban areas. “I haven’t had a day off since,” she said.
Her biggest challenge — and the task facing other harried agents across the state — is finding enough available properties to sell at all price points.
As of January, there were nearly 44 percent fewer homes listed for sale in New Jersey from a year ago, according to the New Jersey Realtors trade association. At the same time, closed sales rose during the month by 17 percent and the median sales price surged about 20 percent.
“I’ve never seen the inventories as low as they are now,” Ms. Gaily said, noting that in Saddle River, which is in Bergen County, there are “maybe 40 homes” available right now, down from the usual range of 55 to 85 this time of year.
Farther south, in Westfield, in Union County, “we have about a third of what we should have in inventory this time of year,” said Frank D. Isoldi, an agent at Coldwell Banker Realty based in Westfield. The result, he said, has been homes being snatched up quickly after multiple bids, and often above asking price.
“The only houses on the market that are sticking around are those that are not so wonderful,” said Roberta Baldwin, an agent with Keller Williams Realty who is based in Montclair, in Essex County, where bidding wars are also more common.
To help get a leg up on the competition, one of her clients, Brian Herlihy, a 42-year-old financial analyst from Manhattan’s Upper West Side, actually devised a bidding formula last summer, based on the price per square foot of comparable sold properties. “But even then we got outbid,” he said.
Jaclyn and Zach Plotkin also exceeded what they had hoped to pay when recently buying an Upper Montclair colonial. “We paid a lot over — I don’t want to say how much,” said Ms. Plotkin, 28. “When we started looking, we were less comfortable with bidding over the asking price, but then we came to realize that we had to in order to get a house.”
The couple and their infant daughter plan to move from their Midtown East apartment sometime this spring.
Buyers throughout Long Island are likely to face continued competition, too, along with rising prices, in large part because of the shrinking supply of available homes.
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“In the last two months we’ve seen such a depletion of new inventory that sales growth has been nominal,” said Mr. Miller, the Manhattan-based appraiser who also follows the Long Island market. He noted in the Douglas Elliman report that signed contracts in February were flat from a year ago, while inventory levels, excluding the Hamptons and the North Fork, fell nearly 37 percent. “That’s a free-fall.”
(The Hamptons saw a 72 percent jump in signed contracts in February for single-family homes, according to Mr. Miller, and an almost 38 percent drop in new listings.)
On the South Shore of Long Island, there’s about a month’s supply of available homes, or even less, in some areas, agents say. “We would normally have five to six months’ worth at any one time,” said Seth Pitlake, an agent at Douglas Elliman in Merrick. “It’s not that inventory is not increasing,” he said, “it’s just that anything that comes out in the market is being scooped up.”
Mr. Pitlake’s clients, Tom and Alicia Monforte, both in their early 30s, witnessed these tight conditions as both seller and buyer. Their Great Neck co-op sold in a week, but when they began searching for a larger property farther east, in Bellmore, they found themselves in a crowded field of purchasers.
“We would put in an offer only to find out someone else offered $40,000 over the asking price,” said Ms. Monforte, a clinical social worker, adding that “every free moment was devoted to looking.”
The couple recently found a house at the end of a long day of hunting. “It was the last house we looked at out of seven,” Ms. Monforte said. The home — a 2,200-square-foot, five-bedroom high ranch with a $649,000 price tag — had just been re-listed after a previous deal fell through. “After five minutes we knew,” she said, “and in two hours we put in an offer for the full ask that was accepted.”
Similar scenarios of stiff competition are playing out on the North Shore. Mr. Pitlake’s Roslyn colleague at Douglas Elliman, Maria Babaev, who specializes in the so-called Gold Coast, recently listed a five-bedroom, split-level in Roslyn Pines that “needs lots of work.”
In just one showing, she said, “I had 27 groups of buyers coming in and received eight offers, three above asking.” The winning bid: 10 percent above the $999,000 list price. Ms. Babaev said more expensive homes were selling faster than usual, though she was quick to add that all property types needed to be competitively priced to garner any interest.
And what do buyers want? “They want green space,” said James Gavin, an agent with Laffey Real Estate in Manhasset, “and a lot are asking for a home office and then a pool.”
In Fairfield County, towns that struggled with flat sales a year ago have seen major bounces.
There are also far fewer houses to go around than at any time since the pandemic began, which is starting to cut into sales volume, according to Douglas Elliman. In February, there were 510 signed contracts, versus 623 in February 2020. Greenwich, though, has posted huge gains in the new year: February saw 108 signed deals as compared with 42 a year ago, according to Elliman.
Gains were perhaps expected south of the Merritt Parkway, whose popularity derives in part from regular train service. Indeed, in the past two months, Westport saw 33 sales of single-family homes priced from $1 million to $2.5 million, compared with 19 sales last winter, according to William Pitt Sotheby’s International Realty.
But points north were strong as well. Ridgefield had 18 similar sales, according to Sotheby’s, up from six, and New Canaan had 55, up from 11; countywide, there is almost no difference between list and closing prices.
But as potential sellers cancel plans to downsize because of suddenly back-at-home children or over worries about finding new homes, supply has been crimped, and the steady stream of New Yorkers searching for homes into the county have created cutthroat conditions.
“Briefcases full of cash are coming in. It’s been crazy,” said Alex Ramsey, 38, a financial-services worker who for the past year has been trying to relocate his family from their four-bedroom house in Stamford to a five-bedroom in either Westport or New Canaan. One house they liked had 45 showings in two days, Mr. Ramsey said, “and a line of cars with New York plates filling the cul-de-sac.”
Six of Mr. Ramsey’s offers have been rebuffed so far, with the most recent in January, when he failed to connect on a Westport house despite offering a 10 percent premium: “There seems to be so much irrational behavior.”
A year ago, the Noroton Heights section of Darien had 67 active listings but there are only 17 today, said Sara Littlefield, a Coldwell Banker agent, who canceled an open house for a shingle-sided 1950s five-bedroom, listed $1.595 million, because she got four offers beforehand.
Pre-Covid, buyers asked to be 10 minutes from train stations. But now, because they don’t have to be in the office as much, if at all, that requirement is moot. “Working from home is the future,” Ms. Littlefield said, “and a lot of people seem OK with it.”
Yet even as buyers are acting quickly, speed can lead to problems. Susan Klein, and her husband, Noah, retired residents of White Plains, N.Y., had their hearts set on Westport when they began looking last June. After two failed purchases, they swooped in last month with an all-cash offer for a four-bedroom house, listed for $1.749 million. And it seemed to do the trick; a contract was in the works.
But a rushed title search missed problems, and on Feb. 24, the Kleins walked away. (The seller upped the price to $1.849 million a day later.) “This frenetic market forces you to make very quick decisions,” Ms. Klein said, “which you may need to change.”