The (guided) flight to suburbia

By Marynia Kruk | August 01, 2016 11:00AM
From left: Kathy Braddock, Joe Forgione, Helen Arden

From left: Kathy Braddock, Joe Forgione, Helen Arden

Summer is traditionally moving time. For many New Yorkers, particularly families, that means leaving the city entirely. Nationwide, people aged 30 to 44 are moving to the suburbs at a faster clip than in the 1990s, according to the data analysis website FiveThirtyEight. And the New York Times recently reported that bidding wars were taking place across Westchester, northern New Jersey, parts of Long Island and lower Fairfield County, Connecticut, mostly in the under $2 million market. Unlike previous decades, the reasons to leave the city are no longer crime and blight. Instead, brokers say that many are so-called “reluctant defectors” who have been priced out of the city. NYC-based brokers are now providing seminars that give buyers a lay of the land — as well as a little hand-holding. Jessica Fields of Compass, who co-created a lecture series called “Beyond Brooklyn” when she worked at Warren Lewis Sotheby’s International Realty, said that all three events she’s held have been filled to capacity.  “I would say it was sold out, except that it’s free,” she said. “We had to cut off attendance because of space limitations.” Often, the search boils down to finding the familiar. Kathy Braddock of William Raveis said, “People are searching for what Brooklyn is and Manhattan used to be: the cheese shop, the butcher shop, the fish market, people talking on their stoops.” For more on which suburban towns are attracting the most city buyers, we turn to the experts. 

Kathy Braddock
Co-managing director, William Raveis NYC

There was a recent story in the NYT about NYC brokers teaming up with their suburban counterparts to host seminars and tours of the suburbs for Manhattan and Brooklyn families. What kinds of events have you spearheaded?

We have a program called “Raveis Escapes.” It’s designed to help people answer the questions, “Should I stay or should I go? If I go, where do I go? How do I go? Why am I going? What am I looking for?” We help people figure out the lay of the land. For instance, as you’re driving through Larchmont in Westchester County, you don’t even blink and you are suddenly in Mamaroneck, the next town over. For those who don’t already know the destination, which is many, our program walks them through all the possibilities — the traditional 75-mile radius of the tristate area. Then we help match them with the right [local] broker.

We advise clients not to focus on the specs of the house, like whether it’s a Tudor versus a modern. It’s about the commute, cost, lifestyle, activities. It’s also about whether it’s going to work for both you and your partner. We have to make sure both people are getting what they want. And the last people you have to worry about are the kids. The kids will be fine either way. No matter the square footage of the house, once they’re older, they won’t want to spend time with you.

Where are city buyers typically coming from and what are they looking for?

There is something for everybody. The question is how do you find what’s right for you. Not everyone who has $4 million wants to go to Scarsdale or Greenwich. People are individuals and families are individual. I can’t tell you a Wall Street banker wants to live in X, because that’s not the case anymore. Still, people from the West Side [of Manhattan] love going to the Hudson River towns and they always have. People from the East Side tend to go to the Larchmonts and Scarsdales. Connecticut is a bit of a mix.

People are also willing to go father than they used to go. Twenty years ago, you didn’t have smartphones, so you couldn’t do work on the train and you couldn’t FaceTime with your kids before they went to bed. Now, you don’t mind going to Southport, Connecticut. Some people work from home three days a week, meaning they can move to Poughkeepsie, which has a great train connection into Grand Central and cheaper housing. Twenty-five years ago, New Rochelle was not on the tip of people’s tongues. Now it has lots going on. It’s more of a city, you can get a bigger bang for your buck and it’s got all types of housing, including multifamily as well as beautiful homes. Yonkers has great magnate schools.

What are the biggest challenges of selling suburbia to NYC buyers?

The biggest challenge is playing shrink. We require both partners to be present. Sometimes your partner tells you something just to appease you, but they don’t really want to move. We want to hear what everybody wants,  and those are hard conversations. The first question we ask is how long the clients think they’ll stay in the suburbs. If the answer is not three years or more, we advise people to stay where they are. Work stability is very different than it was 20 years ago from both ends, the employer and the employee. In the end, 20 to 25 percent of the people we advise end up staying put. Sometimes the thinking is, “The kid doesn’t even walk yet, so does he or she really need that much space?”

Helen Arden
Broker, Douglas Elliman

What kind of services do you provide for clients interested in the suburbs?

Originally, my partner Oliver Gold and I thought we would conduct seminars. But once we started speaking to our clients, we found they felt more comfortable in smaller groups. People are intimated by big groups. They don’t want to sound foolish asking questions. We meet with one couple or a maximum of three couples. It gives us a chance to listen to their concerns. It’s been extremely effective.

What kinds of projects are you seeing, especially in suburban downtowns?

There is waterfront multifamily housing being developed [by RXR Realty] in Glen Cove on the North Shore of Long Island called Garvies Point. The developer is responding to a trend of people already moving out there. The buyers want to be near the train stations and have an easy commute. The developers are creating little cities, injecting new energy in the suburbs and focusing on downtown areas.

How are luxury properties in these suburban towns performing compared to the rest of the market? Are prices softening?

The luxury market in the suburbs is similar to the luxury market in New York City — stagnant. Destinations like Larchmont and Scarsdale in New York, and Greenwich in Connecticut, markets with houses above $3 million, are less in demand. It’s harder to recreate Brooklyn in those types of towns. Those towns have big houses with quite a bit of upkeep and maintenance. Today’s buyers do not want that. Young couples aren’t used to mowing the lawn, cleaning the pool, or hiring people to do those jobs. These people are moving out of the city because they are on a budget. They don’t want the added costs that maintaining those bigger spaces entails.

Which markets have the best deals? And which are most popular?

Port Washington, New York, has good deals available. The under $1 million market is very, very popular. The towns along train lines with easy commutes, that’s where you see bidding wars.

What are buyers from NYC looking for?

People are looking for schools. The price of private schools in the city is ridiculous. Meanwhile, our New York City public schools are not known to be the best. So good public schools in the suburbs have been a big draw.

Christopher Capece
Senior director of development, AvalonBay Communities

AvalonBay is one of the largest rental housing developers in the country. What kind of projects are you spearheading in the suburbs now and how are those projects leasing up?

Rockville Centre on Long Island is a good example of this trend [toward urbanizing downtowns]. In 2011, we completed Avalon Rockville Centre with 349 units, and we have recently started Phase II with 165 units. The community is within easy walking distance to the train station and downtown Rockville Centre. The commute to Manhattan is just over 30 minutes, and downtown Rockville Centre has become a major destination with vibrant evening activities and shopping. Almost a third of the new units in Phase II are studio apartments that meet the needs of young Long Island professionals. Phase I is fully occupied, and we expect a strong lease-up for Phase II.

What is the market like for new development in the suburbs, and how has that changed over the last few years? Are you seeing opportunities to build in these areas, especially as NYC is becoming financially harder to develop in? 

It’s challenging to build on Long Island and other NYC submarkets where there are very high barriers to entry. Not all developers can handle the inevitable difficulties of building in these submarkets. But the high quality of AvalonBay’s communities, our
track record and our luxury amenities all combine to give us a major advantage. We’re seeing opportunities for companies like ours that have a successful track record, financial staying power and experience working with communities and local stakeholders.

How big an issue is NIMBYism in these markets compared to NYC? 

NIMBYism can be a bigger and more challenging issue in the suburbs than in NYC. On Long Island, for example, less than 1 percent of land is zoned for multifamily, so we generally need to get properties rezoned in order to build, a challenge that developers don’t generally confront in NYC.

Jessica Fields
Broker, Compass

You’re a Park Slope resident who created a real estate seminar called “Beyond Brooklyn.” How did you get the idea?

My partner Alexandra Foucard and I created an event called “Beyond Brooklyn” because when talking to clients we were finding that a lot of people were struggling with where to move. They love the sense of community we have here in Brooklyn, but lack of space is getting to a lot of people, especially people with kids who dream of having a backyard or someplace for their kids to go outside and play and more space inside their house.

Moving to the suburbs is not a new thing once you start having a family. What is unusual is that we found people didn’t know where to move. They didn’t have a connection to any particular location. If you have young children and don’t know your way around, it’s very hard to go explore Westchester County or New Jersey in order to understand how this town is different from another. So we brought in real estate agents from outside the city to present information about their communities.

What are the biggest concerns or fears city buyers have about the suburbs?

The big concern is loss of walkability. And we address that by noting that many of these suburban towns are incredibly walkable. Another big concern is lack of culture. Concerts. Book readings. Lastly, people are seeking diversity. There is a concern that everyone in X suburban town will look the same, sound the same. It’s the stereotype portrayed in movies like “The Stepford Wives” and “The Truman Show.” But what you find when you take a really big pool of ex-Manhattanites and ex-Brooklynites for whom these concerns are very important is that they recreate those missing elements in the community to which they move. They open up restaurants and create venues that host cultural events.

Which suburban areas are NYC buyers gravitating toward most? Are there any up-and-coming towns that have started attracting city buyers? Where are you seeing the least interest?

For a long time, Maplewood, South Orange and Montclair in New Jersey were called the Park Slope of New Jersey. Now, you can add Glen Ridge, another town over, to this list of destinations for people who choose to leave urban life. Westchester as a whole, and the Hudson River towns in Westchester, like Dobbs Ferry, Hastings-on-Hudson and Tarrytown, are popular with our clients from brownstone Brooklyn. In the Hudson River towns, the desirability is incredible. Every property is going into a bidding war and has multiple offers. It’s the same dynamic as we’ve seen in Brooklyn.

However, we found that Connecticut and Long island are just not as popular as destinations.

Who’s your typical client and what are the biggest challenges to selling in suburbia?

When I think about the typical client, it’s a couple who have been priced out of brownstone Brooklyn, who have one or two children, are selling in Brooklyn for about $1 million and looking to buy in the suburbs for $800,000, to budget for higher property taxes, a car and commuting costs.

The challenge is to value what they’re selling accurately. These days, it’s hard for clients to know what they have to spend. Moreover, because the market in these Westchester towns is so competitive, we advise people to have the cash from their sale in Brooklyn in order to be a competitive buyer. It’s better to avoid the contingency that they need to sell before they can buy. They [can expect to] go through a few rounds of offers that don’t get accepted. Another challenge is the learning curve of the New York City buyer. Agents expect their potential buyers to need three months of education, meaning driving around with their clients looking at properties they will never buy. The clients need to learn the geography: how does the location relate to conveniences, the train, the subway.

How are luxury properties in these suburban towns performing compared to the rest of the market? Are prices softening?

I don’t know that anyone can ever predict these things. There’s a lot of people being priced out of Brooklyn and looking outside the city, so prices are on the rise. But the markets that we advise on aren’t directly connected to the luxury housing market.

Joe Forgione
Founder and principal, JMF Properties

Traditionally, price and space have been the determining reasons for those opting to flee the city for the suburbs. As a developer in New Jersey, what other factors do you see coming into play these days?

From an economic standpoint, there’s no question that as New York City continues to become increasingly less affordable, residents are looking for other viable alternatives that appeal to their urban sensibilities. That starts with the outer boroughs, but has more and more extended further out to areas that are still geographically convenient and offer a blend of urban and suburban living. For others, it’s not so much economics as it is their stage in life: couples with young children or about to start a family, who require more living space and desire some of the family aspects of a suburban location.

In Sleepy Hollow [a project in Plainfield, New Jersey], we took a lot of time to study the demographics and decided on larger units with garages and [on making it] “over-amenitized.” We are situated between two train stations that have been recently designated as One Seat [where you don’t have to change trains] and near every major highway and great downtown shopping.

Who are the most active NYC buyers in the suburbs these days? What are they looking for?

Brooklynites seem to be on the move the most, as prices continue to escalate. For some, Jersey City may fit the bill for a similar lifestyle at a significant discount, but others are giving more suburban locations in Westchester County or New Jersey a sincere look.

When buyers and renters consider what town they want to relocate to, all have the same issues: access to the train and downtown shopping. They will not move to a town that requires them to have a second car to survive.

There’s been a movement toward urbanizing downtowns in the suburbs with more mixed-use developments. What kinds of projects are you spearheading and how are those projects selling or leasing up?

We’re currently marketing a community in Denville, New Jersey called Estling Village that features 100 townhome-style rental residences within walking distance of a vibrant downtown setting and train station with direct service to Manhattan. We designed spacious townhome-style residences with private entrances and attached or detached garages, and included a full suite of amenities that encourages resident interaction and enjoyment of their surroundings, including an onsite Zagster bike share program. We officially launched leasing in April and are more than 75 percent leased.

In Maplewood, which is more commonly recognized as an urban setting, we’ve just begun work on replacing a former village post office with a new boutique three-story building that will feature 20 modern rental residences, hotel-inspired amenities and supportive street-level retail. Called Clarus, the new property will include one- and two-bedroom residences as large as 1,200 square feet with high-end finishes. Beneath the building, a private 21-car parking garage will include an electric car charger and bike share program.

Paxton Kinol
Real estate group managing director, Belpointe

Your project Waypointe is a mixed-used development in downtown Norwalk. Who are your tenants and where are they coming from?

Historically, one-third of our apartments contain a resident who commutes to New York City. Studying the first 400 apartments leased in Waypointe, we found no concentration of any one employer except Bridgewater Associates from Westport, Connecticut. The number one industry employing our residents is healthcare, with financial services a close second. You see a lot of people wearing scrubs going in and out of our buildings.

Every NYC investment bank is represented by five to seven residents in our buildings. But in Norwalk, we have a lot of headquarters. Priceline.com is headquartered here. Kayak was founded here. There are a lot of tech jobs. Our reliance on New York is a lot less than you would expect.

How are luxury properties in Connecticut performing?

Right now, the single-family housing market in Connecticut is not very good compared to the prices people paid 10 years ago. People are having trouble selling houses. Last I heard, New Canaan had 375 homes for sale on the market. That’s an unheard of number for a town like that with amazing schools.

How big an issue is NIMBYism in your market?

Zoning has always been a major challenge in the suburbs. My friend calls it “CAVE: citizens against virtually everything.” But I’m observing a change in attitude. The people who used to oppose developments like the ones we’re building are at an age when they want to sell their houses and move into an apartment building
to have access to the conveniences. Towns that would never have conceived of having multifamily housing, where you would have to battle in court and sue the town to get building projects approved, are  now approving apartment buildings on their own.

What are the biggest challenges to leasing units to NYC buyers in suburbia?

Residents have to answer the questions Where do I fit in? Do I live in Connecticut? Do I live in Westchester County? Or do I live in North Jersey? It’s a personality thing. A where-did-I-grow-up thing. Westchester is more urban, more New York-centric. Fairfield County is more buttoned up, more conservative, it’s the Vineyard Vines-wearing group. Look at Fairfield County Look magazine versus Westchester Magazine, at the difference in the style and the advertising.