What’s next for New York real estate? Predictions and hopes for Fall 2020
A rather eventful New York summer ends.
Despite the semi-deserted city, bars and restaurants permitted outdoor eating with social distancing, which raised the spirits of those who remained. Many real estate professionals have preferred to postpone their summer holidays to try to make up for the months lost during the lockdown.
July and August saw a progressive emptying of Manhattan and parts of Brooklyn. The attention of local buyers has shifted mainly to neighboring suburbs such as Westchester, Long Island, and some areas of Connecticut where demand, and consequently also sales values, have soared. In some of these areas where the fear of a possible lockdown is less overwhelming you can buy a small house with a garden and garage for the cost of a one-bedroom Manhattan — where the fear of a possible lockdown is less overwhelming.
The number of vacant apartments in Manhattan continues to rise, reaching close to 15,000 units (source New York Times), an increase of almost 200% compared to 2019 and the highest rate in the last 14 years. Traffic in the city has visibly increased after Labor Day weekend (the holiday that marks the end of summer and the return to work) but we are still very far from pre-covid volumes.
A little consolation: in a statement on September 16, the mayor of the city announced that there will be no further increases in real estate taxes to cover the budget gap. Based on what we have seen in previous cycles, the Manhattan residential market has a great inertia: after the November elections, and with the hope of being able to keep the covid emergency under control (in New York the numbers are very encouraging today), we expect more opportunities to emerge as the new year begins.
On the office front, JP Morgan attempts a first reopening of the main office at 383 Madison Avenue, but the employees have already been sent back to working from home after the news of a positive covid test result. While the unemployment rate is falling, returning to the office still remains a mirage: a recent article in the Commercial Observer reports a quarter of the Manhattan offices are available on the market for sub-leasing.
In this climate of great uncertainty, the stable giants Amazon and Facebook made more acquisition move, respectively signing contracts for 3,700 square meters in Williamsburg (Brooklyn) and 68,000 square meters in Penn Station (Manhattan).
As we had predicted for some years now, the Bronx has been showing good results; in fact, real estate taxes and prices have always been low while rents have proved to be the most solid, supporting the pandemic stress well.