Rural real estate heats up as New York City dwellers face COVID-19 reality

Rob Anderson, an electrician for Consolidated Edison, has been mulling the purchase of a second home for years. The pandemic made him pull the trigger.

Anderson and his son, a New York City police officer, are closing in on the purchase of a log cabin on five acres in northwestern Sullivan County community of Long Eddy, a rural and forested community in striking contrast to their Queens neighborhood.

"With everything that's going on, with the riots and the COVID, I wanted a safe haven," the 52-year-old Queens resident said. "It's mayhem here right now."

In some of New York's most rural counties, the long dormant real estate market has been revived, at least temporarily, by city dwellers seeking respite as many workplaces go virtual, blunting the need for easy commutes.

While some are buying second homes, others are pulling up stakes and moving their lives to rural settings they believed were out the realm of possibility just a few months ago.

In the past, home buyers seeking relief from city living decamped to the suburbs — Westchester, New Jersey, Long Island. Now, it appears, those seeking exile from the city in a post-coronavirus world are extending their searches beyond the traditional suburbs, bringing them to counties better know for agriculture and the source of the city water supply than urban sprawl.

"COVID made them realize they could work from home; the next question was where do I want my home to be," said Chris Gross of Upper Delaware Real Estate in Hancock.

A post 9/11-like market

The rush comes after real estate sales were shutdown for close to six weeks from mid-March through April as health officials abruptly halted commerce to slow the spread.

"It went from naught to 60 in a period of three months," said Sean O’Shaughnessy of Coldwell Banker Timberland Properties in Margaretville, Delaware County, on the edge of the Catskill Park. "It's a little head spinning because it happened so quickly."

Richard Ranieri, an appraiser in Oneonta, Otsego County, said the current market is "sort of like 9/11, where people are trying to get out of the city."

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The lure: cheaper real estate and the spread of high-speed internet into less dense areas.

"Broadband is the key element," O’Shaughnessy said, as buyers see the speedy digital connection as the critical to their escape to a rural and slower-paced lifestyle.

July numbers from the New York State Association of Realtors show decreasing housing supply and rising prices in counties within a 2 1/2-hour drive of the New York metro region.

Low rates also fuel sales

Sizable double-digit percentage price increases were evident in year-over-year median sales Ulster, Columbia and Delaware counties, according to data collected by the state real estate association.

For example, in Columbia County, north of Dutchess, the median priced home sale was $370,000 versus $246,000 in July 2019. In Delaware, prices were up 40 percent to $215,000 from $154,000. Statewide, the increase in the median price was 4.4%.

Across the state, pending sales are up 40%.

"The volume of calls is way up," Gross said. "The volume of showings is way up. A lot of these buyers are very picky."

Also prompting the buying rush — plus a flood of refinancing applications — are, according Bankrate, the lowest home mortgages rates in recent memory, averaging 3.14% for a 30-year fixed rate. That would result in a payment of $429 monthly for each $100,000 of mortgage, and 2.64% for a 15-year fixed —.producing a payment of $673 for each $100,000 of mortgage.

Is it sustainable?

Real estate inquiries in communities with names such as Andes, Bovina and Fleischmanns has not been this active since 2006-2007, said those in the industry.

"They're now looking for places that are safe and away from everything," said JoAnne McGibney of United Country Real Estate in Deposit.

But Ranieri, the Oneonta appraiser, wonders just how long the frothy market is sustainable. He said he's seen some slow down in August, hinting July activity may have been an aberration rather than an indication of further housing price inflation in face of higher demand.

"What's on the market is being sold," Ranieri said, saying his contacts indicates buyers are shopping for second homes, the traditional market in these outlying counties, rather than choosing to relocate entirely from the five boroughs.

These hinterland counties were often landing sports for retired firefighters and police officers. But buyer demographics have seen a noticeable change. Those in the market in these outer counties tend to be mid- to high-level corporate types who have become accustomed to the work-from-home routine, and expect it to continue well into next year.

It is now common for these rural homes to have multiple competing bids, O’Shaughnessy said.

In some ways, the price spikes, bidding wars, and brisk sales reveal dueling sides of the coronavirus pandemic. While lower-wage earners, concentrated in hard-hit industries like retail and hospitality, continue to struggle, higher-wage earners who are still employed are poised to take advantage of cheaper borrowing costs.

"The job losses are principally coming in the area of leisure and hospitality or retail sectors,''  said Lawrence Yun, National Association of Realtors chief economist. "Those are lower-paying occupations so they are not really in the home buying market ... The upper-income bracket, they are more stable in terms of jobs, and they're trying to take advantage of these lower mortgage rates.’’

The pandemic may have also impacted the market because more professionals were able to work from home, cutting out the need to live close to the office and ramping up the desire for a larger, more comfortable space.

"Even as people go back to work, maybe it’s no longer five days a week,'' Yun said. "Commuting becomes much less important."

The three-bedroom, two-bath cabin under contract by Anderson is a short ride from the Long Eddy exit on Route 17, right in his sweet spot — a two hour drive from his home in the Whitestone neighborhood of Queens.

"COVID just pushed me over the edge," he said.

Charisse Jones of USA TODAY contributed to this report.

Jeff Platsky covers transportation and the economy for the USA TODAY Network New York. He can be reached at JPLATSKY@Gannett.com and followed on Twitter: @JeffPlatsky

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This article originally appeared on New York State Team: Rural real estate heats up as New York City dwellers face COVID-19 reality