A story in yesterday’s NYT (Suburban Home Sales Soar in the New York Region) highlights the buying frenzy resulting from many city dwellers wanting to move to the less frenetic pace of the suburbs. The pandemic has forced many people to work at home and with children also attending school remotely, suddenly where you live is pretty important. There is high demand for homes with little available inventory, and as a result bidding wars are breaking out with rushed (and oftentimes irrational) choices being made to get that winning bid. In the article agents are saying that people are desiring “green space” and that a lot of suburban transplants–who rented during the start of COVID–are now used to the slower lifestyle and would like to stay.
This trend of flight from the city doesn’t seem to be ending anytime soon and for investors there are some tangential opportunities to consider. Zillow (ZG) seems to be the de facto app winner for real estate marketing. All homes need title insurance and First American Financial (FAF) is probably the best in that category. NexPoint Residential (NXRT) is a solid REIT (real estate investment trust) that acquires, owns and operates multi-family properties. In the area of home improvement/construction Lowes (LOW) is performing well and should continue to do so into the future. And of course Amazon (AMZN) will fill-in-the-blanks for what’s not available locally on Main Street and through Whole Foods with their home delivery service.
“A man who procrastinates in his choosing will inevitably have his choice made for him by circumstance.” -Hunter Thompson