New York City, a flourishing market for real estate over the past decade, faces acute setbacks resulting in one of the biggest blows to the market in years. Agents and clients needed to adapt to a real estate market that was entirely digital.
The coronavirus took the United States by storm, causing mass mortality and forcing citizens to quarantine, especially in more populated states like New York. However, New York was relatively successful at taming one of the most detrimental outbreaks in the nation. But, by doing so, the entire economy went under as all businesses closed or were forced to take place entirely online and digitally. New York City’s real estate market was no exception — it suffered greatly. And real estate agent Diana Brady said that the blow to the real estate market was not limited to New York City. “Overall, nationwide, we saw a big shift in people moving from cities to suburbs to go to less populated areas,” said Brady.
New York City Mayor Bill DeBlasio issued a three-month lockdown on New York where agents were not permitted to show homes to clients in person. Cindy Plehn, a New York City broker from the Corcoran Group, described these three months as “a really great learning experience” where she was able to “learn a lot more skills.”
While some profited from expanding their knowledge of the digital world, the market had no such benefit. The total number of closed sales, according to the brokerage firm Douglas Elliman, plummeted 54 percent in the second quarter — from April to June, which was also the peak of COVID-19 in NYC — compared to the previous year’s figures. That was the biggest fall in revenue in over the past 30 years. Additionally, the median sales price dropped 17.7 percent compared to last year — the largest fall in a decade. Furthermore, more than 90 percent of these sales were in contract pre-coronavirus, according to brokerage Bess Freedman.
Aerin Atinsky
Apart from the pandemic, the recent surge in crime may also be a factor. While New York City has been one of the safest cities in the United States, there have been extreme spikes in violence recently. NYPD reports say that the number of shootings had risen by 130% between June 1st and June 30th, murders increased by 30% for the month, burglaries increased by 118%, and there was a 51% increase in auto thefts citywide.
Some have even expressed a desire to leave the city due to the recent violence. As said in a report by Yahoo Finance, Instagram influencer, Kat Tanita, who lived in the city said that she “never felt unsafe up until this past month” and eventually moved out of the city. She says that “the rise in crime is what made me decide to move for my own safety.”
On the other hand, broker Cindy Plehn says, “many people outside the city are not aware of [the crime spike] yet” Therefore, from a real estate perspective, the rise in crime might only be of concern to those who currently reside in the city and wish to leave rather than new buyers coming in.
On June 22nd, the “shelter-in-place” order was lifted, and New York City went into phase two of its reopening plan. NYC brokers were again legally allowed to show homes to clients in person. As the city re-opens, activity continues to strengthen as the real estate market starts to show promising signs of a return to relative normalcy. While new leases were down 35.6% in June, a report from Douglas Elliman shows that they were only down 23.4% at the end of July. According to the data analysis company UrbanDigs, the number of new listings in Manhattan is beginning to show signs of significantly surpassing previous years. While supply is slowly but surely improving, demand is as well.
“Mortgage rates are so incredibly low that it is very attractive,” Plehn said. “Buying now with the help of Greensboro realtors is a great idea because there are good opportunities to get a reasonable price and there’s a lot of choice.” People who are planning to invest in a Nairobi property may speak with realtors from companies like sarabirealtygroup.co.ke.
In these unprecedented times, it is hard to be sure what the future holds. If a second wave of COVID-19 occurs, New York City real estate may be looking at an even bigger downfall than before. But if New York continues to quarantine and cases remain steady, there is promise that the real estate market will make a smooth upward trajectory — and New York City will return to what it once was.