New York City’s housing market faces slow recovery


Samson Li | The Ticker

M'Niyah Lynn

The coronavirus-pandemic-driven shutdowns and closings have left the New York real estate market in a state where it is expected to make a gradual recovery, according to experts.

Single renters seem to have benefitted the most because they are able to get places for “dirt- cheap prices,” The New York Post reported.

Rents have been declining in New York City since March 2020, Victor Rodriguez, director of market analytics at the Costar Group, said. There is less competition when less people are trying to move.

The pandemic has served as a “now-or-never moment” for renters to find places they desire without needing to compromise their “apartment wishlist,” Brick Underground reported.

Additionally, the increase in opportunities available for renters has created a demand for people to get larger apartments.

New York City’s outer boroughs have become prime locations for renting and buying. In fact, Queens and Brooklyn have seen increases in renting because prices are low, while Manhattan, which has some of the city’s costliest locations, has seen less improvement.

“It took 100 days to sell apartments on the Upper East Side,” but properties in Borough Park were enlisted for 61 days before people brought them, Bloomberg added.

“Manhattanites are moving to the outer boroughs, and people in the outer boroughs are moving farther into the outer boroughs,” Nancy Wu, an economist at StreetEasy, said.

Nevertheless, Manhattan has still seen some price drops in certain neighborhoods, such as West Manhattan, according to New York-based brokerage Douglas Elliman. The average rental price for a two-bedroom apartment in Manhattan was $4,901 in January 2021, compared to $5,418 in January 2020.

Experts say the market is improving because owners are adding incentives for people to rent. “That is a key part of the story, that landlords are offering two to three months rent, waiving amenity fees, paying broker costs,” Rodriguez said, according to The New York Post.

There have been disparities in eviction filings for tenants who haven’t been able to pay rent. A reason for this is that landlords are prevented from evicting people because of Gov. Cuomo’s moratorium, but landlords are still filing paperwork, ABC News said.

The people suffering most from this are minorities and those in low-income neighborhoods. Many people in these communities are struggling to find employment.

Since Jan. 31, there have been 57 evictions in an area of Brooklyn with the 11226 zip code that has a large Black population, compared to only one in a largely white area with the zip code 11215, according to The Eviction Lab at Princeton University.

According to Wu, the weakening of the state’s economy allowed for rentals to be cheaper in the market.

Specifically, New York faces a projected $59 billion revenue shortfall through the next two years because of the pandemic. Consequently, this loss meant “consequences for everyone in the city,” like the MTA and renters, Wu said.

Since last year, New York City saw a large increase in the number of vacant apartments that were on the market.

One main reason for this is that people were leaving the city to move to other areas, like the suburbs, or they moved out-of-state. This left the real estate market with unclaimed housing units that are now available for cheap.

However, even with a decrease in the prices of homes and apartments, Wu said that rental demand will not return to pre-pandemic levels until jobs reopen and more people are employed.

With the progress in COVID-19 vaccines, experts are confident that the New York City’s real estate market will have a breakthrough.

If more people are vaccinated, then businesses may start reopening, which gives workers the opportunity to go into the office, Brick Underground said. This could be a way to motivate people to return to NYC.

Steven James, President and CEO of Douglas Elliman, said he expects buyers will express optimism in light of properties being bought because it is indicative of an improving market. Meanwhile, for New Yorkers that are planning to buy or sell property in the suburbs like Dutchess County, they may continue seeing a rise in prices and experience bidding wars because those have become highly sought out areas.

If the city makes a big economic recovery, there’s a chance that rents could go back up, Brick Underground said.