When Kerry-Anne Hoffman signed the contract on her first home purchase in New York City — a two-bedroom condo in Clinton Hill with a washer/dryer and dishwasher for $1.29 million — at the end of February, she was told that it would take around two months for the deal to be done.
Even though the coronavirus was making headlines overseas, it didn’t seem threatening to her tentative closing date: April 16.
“I was still listening to the story of someone from America who was on a cruise ship and got it, and I was like, ‘Oh, what is this thing happening?’ ” recalls Hoffman, a 34-year-old project manager, who bought the Brooklyn apartment with partner Sung Choi, a 43-year-old software executive. “[There was] nothing about what’s going to happen to the market, or is the seller going to back out, [or] is this a good time to buy?”
But by mid-March, that had all changed. Gov. Andrew Cuomo’s stay-at-home order went into effect on March 20, banning all non-essential gatherings throughout New York state.
Even though the real estate industry is “essential,” activities that used to be conducted in person — from apartment viewings and open houses to appraisals and closings — had to happen virtually.
For Hoffman and Choi, that meant their closing date was pushed back to May 5. And when it finally did happen, any verbal communication took place over FaceTime, while documents had to be FedExed from buyer to seller and back again rather than being inked at a round table.
“There was a moment where I thought, ‘Is this the right time to buy? What if I lose my job? That wouldn’t be great. Should we reconsider?’ ” Hoffman says. “But the advice that we got, which made a lot of sense, was that we were still going to own. If we didn’t buy now, we’d probably put this off for at least a year, and wouldn’t we rather just start our investment now?”
Plus, Hoffman adds, “We love Brooklyn. We know we want to live here for a very long time, so whatever happens, we will ride it out here.”
Some New Yorkers might be fleeing the city for the Hamptons or the suburbs, but others are doubling down on New York City real estate. On an absolute basis, there are far fewer real estate deals happening in New York City amid the COVID-19 crisis, with transactions in April dropping by 61 percent over the same time last year, according to PropertyShark.
But the Big Apple’s biggest fans are still following through.
Still, for first-time buyers, the coronavirus has added new layers of stress to a process that’s already filled with piles of paperwork and nerve-racking interviews — not to mention forking over huge chunks of cash.
“This is uncharted territory so the norms for reviewing a package or how to do a board interview or what the move-in procedures are — [it’s] all in flux,” says Allison Chiaramonte, an agent at Warburg Realty. “Things are taking longer, and there are often unexpected steps and costs such as needing additional cleaning or security for move-ins.”
There has been one major hiccup for Liwen Zhang, 27, and Albert Louison, 26, who are gearing up to close on a $680,000, two-bedroom condo in Midwood. The pandemic and its financial fallout threw a wrench into the process of getting a loan. The couple put in an offer for their apartment in February, and had initially applied for a loan through Bank of America’s Home Grant program. But after the bank imposed a new lower income limit for the loan, the couple had to restart the application so that only one of them was the recipient.
But even with that snag, the couple pressed forward and are due to close on their condo sometime next month. “For everybody, it’s just stressful,” says Zhang, who works as an associate at a bank. “You worry about job security, and you’re taking out the first big loan in your life.”
Buying an apartment proved even more stressful for those who began looking for a pad after the lockdown kicked in. Stephanie Gerst, a 37-year-old director of solutions engineering, began her search at the end of 2019, and sent in her application for a one-bedroom co-op on the Upper West Side in early February. But after sitting on her application for a month, the co-op board changed its financial requirements and ultimately rejected her. With a hard move-out date of May 1 on her rental, also on the Upper West Side, Gerst had to find another apartment in mid-March — with the help of her broker, Warburg’s Becki Danchik — just as New York state began shutting down.
“We had been in open houses earlier that had a dozen people in and out and taking turns going up the elevator,” Gerst says. But the second time around was different; only one group was allowed in a unit at a time to maintain social distancing. Gerst and Danchik looked at a handful of apartments on March 15, before New York mandated masks, but they did pack plenty of hand sanitizer and wore gloves. “We stood apart from people, waved hi rather than shook hands, and there were fewer people out,” she adds.
Gerst ultimately fell in love with the first apartment she saw that day, another one-bedroom co-op on the Upper West Side, and submitted an application within a week of seeing it. After doing a Zoom interview with the co-op board (“It was only 10 minutes because one of guys was late and one of the guys had a bit of technical trouble and nobody wanted to start,” she says), her application was approved; she expects to close remotely sometime in June. Gerst has been staying with family in Ohio while waiting but is eager to return to the city.
“I’m not an Ohio girl anymore,” she says. “Even if I am a bit of a homebody and an introvert, there’s an energy that you get — even with COVID, hanging out your window, banging on pots and pans at 7 p.m. — that you don’t get in the Midwest.”
Gerst credits Danchik and her real estate attorney for helping to take the guesswork out of pivoting to virtual home-buying, and other experts emphasize the importance of a good team to help buyers navigate the process — especially now, as traditional methods to vet properties are prohibited.
“When you can’t physically be in a space, your broker’s knowledge of a building [and] its pros and cons and what to ask while looking at virtual tours are more important than ever,” says Chiaramonte. “The complications to a deal due to COVID-19 are new to most buyers, but especially first-time buyers, who have never been through a normal process.”
For Elaine Tsai, a 32-year-old product manager at a tech startup, that meant relying on her broker — and only her broker — to answer questions during the final walkthrough of the two-bedroom Long Island City condo with a huge private terrace. (Similar two-bedrooms have sold for around $1.2 million.) “I would have loved to bring family and had a couple of eyes on the house, but that wasn’t possible,” Tsai says. “My broker was on standby, so I could take pictures, I could do videos, I could send them, and we were able to quickly communicate.”
Tsai closed on her apartment in early May, and, as is now the norm, the process leading up to that — getting the deed, for example — was all online. “As a first-time home buyer, you’re basically making the biggest purchase of your life, and you want to be there for everything,” she says. “With coronavirus, it was like, ‘Okay, that just doesn’t make sense anymore. That’s not reality.’ ”
Now, Tsai is figuring out when she can move in — but she’s not in a rush. “I purchased this home so that I’m close to Manhattan, and so that I can have friends over, but right now I’m living with my family,” the Queens native says. “You can’t really go to the city, so do I just continue sheltering in place with my family, and continue enjoying time with them, because that’s why I moved back to New York. There’s definitely that balance.”
For Hoffman and Choi, who moved into her new place in mid-May, buying their first home during the coronavirus was a silver lining during a dark time: She was still mourning the passing of her father, who died of the deadly virus at the end of March. “Someone said, ‘Oh, you buying a place and moving just shows that life will go on, and that life is happening, and the world is still in motion, even though it doesn’t feel that way’ — and that to me was the most helpful and comforting way to think of it,” she says. “We’re still living. We have to be safe and do the right thing, but there is home ownership. There is life beyond coronavirus.”