As COVID-19 rocked dense urban neighborhoods, and racial unrest fueled some violent protesting and looting over the last several months, most in the downtown neighborhoods were bracing for what could be an exodus from city life.
Young families, retired empty nesters, long-time homeowners all who had invested and rooted down in the neighborhood were crossing their fingers that people who could wouldn’t flee from city neighborhoods amidst all of the uncertainty. Some recent numbers, especially in the rental market, seem to suggest such an exodus could be happening. Anecdotal stories around the neighborhood also seem to confirm condo sales are rising in some buildings too.
However, those numbers and stories may not be what they seem on the surface, as real estate professionals said most of what is going on is just the strange new ebb and flow of life related to COVID-19.
Massachusetts Listing Service (MLS) data shows there is a tremendous amount of apartments available now in the Back Bay and South End – leading some to believe people are leaving and not returning.
As of July 19, there were 543 apartments available in the Back Bay, as compared to last year at the same time when there were 173. The average days on the market had also increased from 36 days last year to 43 this year.
In the South End, as of July 19, there were 390 apartments listings, as opposed to 100 at this time last year. The average days on the market increased from 26 to 40.
In Cambridge, there are more than 700 on the market now.
Realtor Marty Scott of Gibson/Sotheby’s in the South End has been in the rental market for 35 years, and said there isn’t so much of an exodus as late decision-making. Where people normally had decided by March or April where they would rent in September, now they are holding out and still deciding.
“It’s all happening very, very late this year,” he said. “Normally by now the market would be dying down and people would have made their choice for September 1. From the second week in June to July 4 it was total pandemonium. I did three months of business in three weeks. Then it got quiet and now we’re in Round 2. It’s extremely late for all this.”
Scott said he was busy in April and May, but not to the extent he normally would be. He said he believes most of the huge amount of inventory results from people being in lockdown and working from home. With so much uncertainty and having to stay inside in April and May, few people were going to take the chance of giving up their living situation and trying to find a new apartment. It was simply hunker down mode.
As things have relaxed with COVID-19, there is now much more of an appetite to make that change.
“I think we’ll be very busy right into August,” he said. “This is nothing like 2007 and 2008. We sas that coming slowly but surely. This year it was like they flipped a switch and turned off the world…Very few people around here have lost their job. Everyone is working from home. I would tell everyone to be cautious…There is an enormous amount of inventory on the market. They will get absorbed by Sept. 1. Some apartments won’t get chosen and landlords will feel the pinch.”
To that, Scott said he is having heart-to-heart conversations with his landlord customers as the market is dictating the situation. An apartment that doesn’t look right or is priced poorly will sit in this market.
“I’ve been having realistic conversations with landlords about this not being the year for a rent increase,” he said. “They still try to increase it and then they figure it out. They’ve been so used to raising the rent every year for so long, it’s hard for them. But they get realistic really quick. Still, I think the real estate market will be fine and the sky isn’t falling just yet.”
The national apartment tracking service, ApartmentList.com released a report last week that found Americans are not abandoning cities in the wake of COVID-19. They analyzed date from their location preferences of millions of Apartment List users, and in contrast to the popular narrative of the city exodus, there was no data trends to back that up. In fact, on their service, they found there are more people nationally looking to move to higher-density cities. The share of those wanting to move to less dense locations outside of cities has declined nationally.
Nationally, searches going from the suburbs to the central cities are up 11 percent, not the other way around.
There was a finding, however, that Boston city-dwellers had an increased interest in the suburbs – more so than New York City and San Francisco.
Scott agreed that some people are wanting to leave the city following COVID-19, but not everyone. He said many that are leaving had probably been talking about it before, or young single professionals who have moved back in with their parents.
He said in the Back Bay, with Wayfair offices closed for the near future, many are surrendering their apartments and going back with parents or relatives.
“They’re not going to be back in the Back Bay until at least January and that could likely mean June,” he said. “We’re seeing a lot of that. The young people are going back and living with their parents. That is happening, but the majority of people I know are not leaving here.”