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COVD: unintended consequences, unexpected benefits
In NEPA (Greater Scranton PA area) the market was starting to heat up in November 2019. By January 2020 it was cooking—really moving along nicely—better than in many, many years.
Then along came the lockdown.
But what happened because of the lockdown was initially, unexpected and counter-intuitive: the market kept getting hotter! What started as a small, steady stream of out-of-area and out-of-state investors began to grow. Listings were gobbled up, and as of this writing (July 20, 20) many listings are selling OVER ASKING PRICE, within a day or three of hitting the market. Can’t remember the last time that happened in NEPA!
When we asked investors what brought them here, the answers were quite similar: they cannot cashflow in NY, NJ, CT, or many other areas, but they CAN here. Additionally, they wanted to start moving out of the major metropolitan areas, and so did many of their tenants.
A recent NY Post headline: Manhattan rents drop for first time in a decade thanks to COVID-19. That only confirmed what we were hearing from investors and end-users alike: they lost that loving feeling for being in a crowded, high-rent-with-no-cash flow, high-risk for health, safety, rioting and now ever-increasing violence-prone areas.
Even my Millennial daughters are actually talking about leaving their ‘chic’ downtown Brooklyn apartments to move to (gasp) less urban, more small-townish areas.
Everyone stay safe and well!