I have been thinking about this question for the last 5-6 months, and everyday, both positive and negative thoughts come into my head about the future of Hudson County. I am honestly a very optimistic person and I still think I am optimistic about NYC and Hudson County over the long-term but I think we are headed into a nose dive in the next 3-5 years. Remember this is specifically for this area (Hudson County/NYC). It is funny when I look back on pre-pandemic comments. One of them is "I don't see Hudson County Real Estate ever slowing down unless something drastic happens". Well I think we all know what that drastic thing was.
Let's face it, New York City is not doing so well right now. Companies are not urgent to go back to their 100-200k dollar monthly office rents and to be quite honest people do not want to go back. I had a friend the other day complaining to me about the thought of going back to work, and I think higher ups at other companies are thinking the same exact thing. Some people hate working from home on a regular basis and believe me the boredom, repetitiveness, etc is very annoying. But, I think people like the benefits that come with it as well. Working from home people can spend more time with their kids, prepare meals & food for the family, get everyday things done at a timely schedule instead of dragging your feet home to be left with a pile of laundry, being able to get a few minutes extra of sleep, the list can go on and on.
Why do I bring this up? Well, this culture change we are about to experience is nothing like we have ever seen before. For the first time in history we are going to have a massive change to digital and electronic working setups from your own home. This technology has been around for a couple years now, but coronavirus has given the mass population an excuse to finally put this home style working life into the main screen. And guess what, the verdict is in, and people love working from home. There are downfalls, as mentioned, but there are also downfalls to commuting to an office and I think there are more positives than negatives in working from home. This is just my opinion, but now companies are committing to becoming carbon NEGATIVE in 2021, including one big four Accounting Firm a company with over 300k people worldwide.
Let's backup because that is pretty shocking to me. One of the big 4 accounting firms is committing to be carbon negative with over 300k people commuting worldwide everyday? That would be absolutely impossible. The hidden message here is we are going to keep our employees home.
Let's move on.
I wanted to outline that for you to help you understand the current environment of the professional world. NYC is so heavily populated because of the business that happens there. It is the financial capital of the world. Take away the people that create the finance district of the world, you are getting rid of the financial district. This directly affects Hudson County, where most people live and commute to the city. With nowhere to commute, people are moving all around the country. Bosses are moving to Flordia, Vermont, Upstate NY, etc etc.
Well, if you put all the pieces together we are not on a good trajectory. To me coronavirus created a much bigger issue at hand and I think it is going to heavily affect the NYC and Hudson County area for many years.
Let me know what everyone thinks! Would love more insight from talented individuals with an inside view.
This is spot on. The number of people that we have flocking up to Vermont from New York and New Jersey (among metropolitan areas) because they can now work from home is astronomical!
@David Flores i commute to NYC from Rockland county everyday, about 25 miles. Thankfully, the pandemic did not effect my line of work but it did increase the value of my house. People are flocking away from the city to the suburbs. Since staying home indefinitely is the new norm people want a nice suburban home with elbow room. As for Manhattan, i still find it to be a sad ghost town although it has made my commute and parking a dream. I can find a parking spot on the street and save $600 per month on garage parking. Pre pandemic street parking is basically unheard of in Manhattan (uptown exception). So, $600/month save on parking and a 15% increase in house value..Hey, at least some good came out of this for lots of people. Some not so lucky. Now bosses realize that you can stay home and work and downsize staff as well.
Yeah 100% agree. Suburbs are enjoying appreciation right now. NYC and hudson county though, are deff not. I dont want people to summarize hudson county as all of Jersey, im sure some will on this forum but yeah I am specifically referring to hudson county/nyc area.
Thanks so much Anthony, appreciate the insight!
Hi David. You bring up some valid points for a good discussion. I had similar thoughts at first but then I underestimated the fact that we are talking about New York City here-- the greatest city in the world. If one person moves out, someone else will move in. The market will correct itself for sure but IMO the City will endure as we are talking about the national and global population who I am sure will jump right in during this deleveraging downturn.
My educated speculation...
I am confident New York City is not dead but it did get the kick in the balls that it desperately needed. My wife and I moved to Union County in 2015 because we wanted to buy, couldn’t afford what we wanted to buy in the City, and didn’t want to pay NYC rents, so we found more affordable living in Jersey. I used to commute in daily as I property manage in Manhattan, Brooklyn, and Queens. I now go in three days a week and work remotely the other two (really four days) but I kind of have to be in the City due to the nature of my job.
Anecdotally, most companies don’t have the infrastructure or the desire to allow people to continue working remotely indefinitely for a multitude of reasons (i.e. training new employees, collaborative team efforts on new initiatives, company culture, supervision, etc.). Bigger companies may implement larger work from home initiatives but the employees living in the City are more concentrated within small businesses than they are within conglomerates.
These employees and business owners may move within an hour radius or so for better quality of life, but at the end of the day, their high paying jobs/businesses will largely dictate the need to be in more frequently. Furthermore, I love the city, it’s food, drinks, culture, entertainment, and hustle and bustle and believe it to be incomparable; I am not alone with this feeling and it’s what attracts many people.
I do think NYC will continue to see a downward shift in residential sales and aggressive rental prices for the next 12-24 months but eventually it’ll come back. It’s too desirable, interest rates remain low, and the stimulus and inherent inflation will prevent it from taking a perpetual nosedive. Hudson County will likely be ok but I am not nearly as informed on the market as we only have a couple properties there in which I am virtually never involved. Personally, I’m looking for multi-family in New Jersey within an hour or so vicinity of New York due to the aforementioned.
Hudson County, as well as NYC, isn't dead. Like @Drew Donovan said, it definitely got a kick in the balls.
Bill DeBlasio just announced yesterday that he's having 80K workers that have been working remotely to begin the process of returning to the office May 3rd. It's a symbolic gesture to get the city's economy moving again as well as an indication that we all have to begin resuming some semblance of modified-normal lives. There was also an article stating that employers are facing a new challenge with hybrid work arrangements where offices are barren Monday's & Fridays yet crowded Tuesdays through Thursdays. How do you manage such a work environment and still maintain safety protocols? Not to mention the issues with commuting in during the week.
I've had this fear in the back of my mind that multi-family housing will experience a correction of some sort; espeically across the NYC/Tri-State area. The target market for the units that are being created (younger folks/Millenials) will eventually want/need something more than an 800sf unit. Their going to eventually pair up and either want a family or a place with more space and more for their hard-earned money. From what I've read, those same people may bypass the starter-home and go right for the next level up.
Sorry for the random stream of consciousness; Honestly I think HC and NYC don't have a lot to fear long term.
Median sales price for single family homes in HC was up in February by 23.3% YOY. For townhouse and condos it was down 7.7% but the number of closed sales was up 30%. The sales market looks pretty strong.
I would look into the amount of single family homes in HC. Its not NYC but it is certainly not a suburb. Townhouses, condos, and apartments over run the area by a large margin. That being said as you pointed out there has been negative appreciation as of late. My worry is this continues.
I would also challenge your home sale population having increased. I believe people are moving, yes, but i don’t believe that has any correlation with how your investment does. Movement can be good or bad.
I don’t mean to challenge you but i have been in finance for many years and its very easy to present or skew numbers to fit a storyline.
No there hasn't been negative appreciation as of late. The median YOY for townhouses and condos was up in October, September, November, December and January. It's down for February so the YTD median is down 2%.
Number of single family homes sold was down 47.4% YOY. Townhouse and condo was up 55.3% and it's up 31.4% YTD. And yes you're right there are many many more townhouses and condos so the the number of total sales is significantly higher YOY. Not sure how you think that movement can be bad.
Please feel free to challenge these numbers. I'm not trying to skew any data or fit any storyline. This is the only data on this thread. The rest is largely opinion and anecdote.
@Jason Lee , that would be very surprising to me. Those are some intense increases YOY. Do you have a link or some kind of reference you can point to? I would love to read into what you are and get a different angle on it.