AMERICA’s CITY: More than New York City
Where we choose to live, work and play have been put to the test with Covid. Rather than list tired data points found on countless news portals and opinion sites, the following Spring 2021 overview can be helpful in understanding the current and potential state of the American economy as it relates to art and real estate.
The Post-Covid lifestyle:
Paris, like London, was once displaced by New York as the go-to global art and cultural hub. New York City transformed global opportunities in the arts. And with it, real estate for work and play refined further. New York City last year – Dead! Jim Altachur’s highly touted opinion piece set a public awareness for the “city’s” exodus. Seinfeld, numerous property owners, and cultural icons rushed to the CITY’s defense.
A year later, the flight from urban centers to detached single-family residences continues. Likewise, the relocation from high tax states to lower-cost environments remains in place. New Yorkers who planned on retreating South have used Covid to find their new home in South Florida or out West. Retail, constrained by high rents, limited foot traffic, and neighborhood improvement districts out of touch with digital marketing initially, advanced further online because of Covid. Empowered new merchants and large established brands resorted to services like Shopify. They accelerated the simplified purchase process found online. Work from home (WFH), became a business model that has focused many corporate cultures to re-evaluate. From major businesses like JP Morgan Chase to established restaurants and retailers, the remodeling of the way work is done remains under a serious microscope. The opportunity is great for those involved in the arts and in real estate,
Focus on The Home:
At home, WFH continues to repurpose once-forgotten spaces. Those in cramped quarters, to begin with, seek more space. Remodels and new home builds are underway throughout the country. The shortage of available properties has caused values to rise. Last year in Denver’s Central Business District, there were 110 units available with 35 starting at or above $1 million. This year the count is 125 and 32 respectfully.
As the year evolves new supply will come online. Those negatively impacted professionally have been supported by federal eviction moratoriums. Workouts and additional openings will increase slightly from the already low national foreclosure rate. An increase is most likely not anything similar to what we experienced in the 2006-2009 financial crisis. The end-of-year shift back to a new normal will leave home buyers and sellers with a supply favoring the seller willing to meet demand.
Urban living will continue to have value for singles and empty nesters. What will restore life in urban centers? The conveniences of the city – avoidance of traffic, reopening of venues, restaurants, and ultimately close-knit communities anchored by high achieving schools. The urban victors? City planners and public officials who have a grasp on the national homeless crisis. Cities that fail, like Los Angeles, Chicago, and San Francisco currently, will lose to expanding cities similar to Austin, Denver, and Phoenix. Across the country, the imperative need to rebuild and replace infrastructure will guide housing demand – urban and suburban. Nationally, the homeless crisis will have to be met by a public-private partnership focused on restoring cities and renewing confidence amongst property owners.
Vaccinated and Open for Business:
Repurposing home and office spaces will accelerate in the coming months ahead. As Covid evolves and populations vaccinate, the trend to work from home ensures that families will demand more space as the family core solidifies. Value will remain available in urban centers as once necessary office space shifts to modern living and work formats. “America’s” city is far from dead. Like New York, cities will transform to meet new living and work conditions.
For residences, the first wave of home improvements has already come to the tail end. Certain families will surely relocate. Covid babies will spur an uptick in residential demand for some; those empowered by WFH will upsize their living situation. Having a second home as a getaway will be an opportunity for some. Others will actually expand where more solitude and privacy exist. Non-shared spaces will be preferred to open sharing formats. WeWork and the like will further transform as major companies repurpose their office formats. Young and old seeking simplified living and work conditions will replace the havoc caused by rushed Covid policies nationally.
Technology has and will continue to enable the WFH movement. Expect meeting and gathering after work to rekindle nightlife and re-establish new favorite finds for dining, art, sport, and culture. Miami may be an example. While New York and Los Angeles rethink their public policies and economic goals, outdoor-focused states will gain a nimble and mobile workforce. Travel will grow for pleasure and less for business in the short term. Living and working from anywhere will enable the home to be both a central refuge and for some an asset to leverage through VRBO/Airbnb services.
Covid’s toll on interpersonal relationships has indeed pushed many to their wits end. The importance of certain in-person events and meetings will unquestionably return. The home culture of 2020 though will drive demand for open indoor and outdoor space. The condensed living needed with everyone home and working will further the “right sizing” movement for the American residential lifestyle beyond Covid.