New Orleans Rumor or reality? I wasn’t sure. My daughter had heard from a real estate agent who specializes in New Orleans historic districts like the French Quarter, Marigny, Bywater, and elsewhere that, contrary to nationwide home sale collapses of 50% during the pandemic, sales were booming in the Quarter. I found that hard to believe. Maybe just a one-off thing for that particular agent or your usual hawker hype or something. What was more interesting to me is that she reported that sales were driven by people leaving the Quarter with its tight spaces and brick patios for anyplace they could find, like Bywater or even farther out, where they could have a garden. Grocery store shortages and health risks were spurring a weird reactive small food sustainability movement, it seemed.
Darned if vulture capitalism as practiced by REITs and Wall Street equity funds didn’t find themselves on the right side of a lucky coin toss, even as we have noted that they have dominated and eviscerated the rental markets in cities all around the country from Atlanta to Memphis to Phoenix. Remember, these fast operators, led by Blackstone Group, swooped in and bought hundreds of thousands of foreclosed homes from Fannie and Freddie in nearby suburbs so that they could apply a coat of paint and make them rentals, sometimes to the former owners. Invitation Homes, the creature from the Blackstone lagoon, was spun off for billions, but is still the biggest operator in this space with more than 200,000 properties. American Homes 4 Rent is another big player with over 50,000 homes. According to the Wall Street Journal, after they took early hits in the stock market on expectation of rental defaults at the beginning of the pandemic, they have now surged forward, partially riding the same tide that might be rippling from the urban core, as noted in New Orleans.
Families are trying to move to the suburbs because of health concerns and in order to get more space for themselves and children to cope with stay-at-home orders now and to come. These families are also moving to rent as mortgage markets and general financial concerns make buying during this depression harder to contemplate, despite low interest rates.
Not on the short list from Wall Street, but I bet on the minds of families as well is something of a modern day “back to the land” movement, as least as far as suburbs located near urban centers are concerned. Small gardens and food security are on the list. I’ll bet more of them are like my uncle in Kansas City and want the space to have what he calls a Costco-room, where he stores all of his bulk purchases. No danger with a Costco-room of ever running out of toilet paper!
This new “prepper” sensibility might be a movement. It’s a shame Wall Street is reaping many of the rewards, but a pandemic makes all of us something of a prepper. The zombie apocalypse might be fiction, but in fact, it now seems like we are in it.