2020 is a Tough Year for Manhattan Real Estate
The news right now about the New York real estate market couldn’t be worse. The state is reeling from a plague of bad events that could conceivably topple the state and city governments.
The work at home, Corona Virus exodus from Manhattan doesn’t seem to be stopping, and with the fall season just ahead (without a Corona Virus vaccination), the vacuum from exiters is something property owners can feel. It’s a similar situation in other housing markets in 2020, but NYC’s plight is making property owners nervous.
13000 Empty Apartments in Manhattan
CNBC’s Robert Frank discusses the glut of unsold apartments in Manhattan.
While NYC and the state of New York had a good month in June, it may have come at the expense of homeowners fleeing Manhattan, Bronx and Queens to new locations away from the dense city.
Douglas Elliman reports the NYC July 2020 vacancy rate has jumped 2.3% since last July and that median rental prices have fallen 7.6% YoY. New lease signings are down 23.4% and condos are on the market 2 days longer.
The Big Exit from Manhattan
The reason for the flight is undoubtedly the Corona Virus shutdown and recession along with sky high rents that fewer renters can afford currently. But the defund the police movement and the violence of those criminals last month certainly frightened a lot of Manhattan residents.
President Trump has created executive orders to give those waiting for evictions a stay of execution, and more financial aid for New Yorkers. As the months pass however, the ticking time bomb may become louder.
Governor Cuomo made a nationally televised plea for New Yorkers to come back to the city which really didn’t help the matter. Given the economy and employment will be tighter in the next 6 months, those who have sold and left, or closed their businesses will find the lower cost of business elsewhere hard to give up.
New York State Home Sales Stats June 2020
The graphic below shows a 34% drop in sales and 20% drop in listings although across the state, home prices rose 3.2%. It’s almost as though New York hasn’t climbed out of the Corona Virus recession yet.
Manhattan and NYC are a World of Condos
Most residents of NYC and Manhattan don’t own their home. They rent, and with such high vacancies, we can see rents dropping in the months ahead. Currently landlords are giving 1 to 2 month concessions on leases. This likely won’t stop condo prices from plummeting through the fall.
Zumper reports that rents in NYC dropped 1.7% for one bedroom apartments to $2840 per month, and down .3% to $3200 per month for two bedrooms making it the most expensive city for renters.
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Housing Market Forecast – copyright Gord Collins
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