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How a vaccine could upend real estate markets -- again

November 18, 2020. Summarized by summa-bot.

NEW YORK, NY - AUGUST 19: A man enters a building with rental apartments available on August 19, 2020 in New York City. Exodus out of New York has leaded the city into a highest number of retails and apartments left to rent after the Coronavirus pandemic. (Photo by Eduardo MunozAlvarez/VIEWpress via Getty Images)

With potential vaccines on the horizon, real estate in big cities like New York could start to turn around.

Cities like New York and San Francisco have seen higher vacancy rates and lower rents and sale prices as many people, untethered from office jobs, retreated to the suburbs and less densely populated areas.

"It's not going to be a light switch," said Jonathan Miller, president of Miller Samuel, a real estate appraiser and consultant in New York City.

While widespread vaccination is still a ways off, the news alone is a good sign that real estate in cities will continue to recover as the prospect of vaccines becomes more realistic, said Richard Smith, chairman and executive director of the Foundation for the Study of Cycles, a nonprofit that studies recurring patterns in economics, social sciences and nature.

The more a vaccine brings life closer to "normal," the more city real estate markets will change, said Miller.

For those looking to buy, purchasing a home in New York will be more attractive when a vaccine makes all the things a city has to offer possible again, Miller said, including easy access to dining, theater, concerts and events.

The uncertainty of this past year has left a mark on buyers, particularly those with higher incomes who can afford a second home near the city as a refuge that requires no planes or planning, said Dottie Herman, chief executive of Douglas Elliman Real Estate.

"People have gotten used to working from home and are comfortable living farther from the city," she said.

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