Within a week after the Labor Day weekend, New York City’s residential real estate saw almost 190 million USD in sales, with condos, co-ops and condops selling at an average price of over 2 million USD. However, this year saw one of the lowest number of signed contracts since 2013, with only 10 luxury contracts signed at a price of 4 million USD or more. Additionally, no co-op contract was signed at 4 million USD or above.
In Manhattan, there was a 38% decrease year over year last month for condo contracts. Simultaneously, listings increased by 30%. In Brooklyn, residential properties that were modestly priced saw a surge in sales, especially condos and co-ops. The Hamptons are usually a hot spot for the summer. This year however, it is expected to be an all-year-round destination as many affluent New Yorkers have decided to remain away from the city and have extended their rental period.
Although New York City has announced that schools will reopen on the 21st of September. The reopening of the school system was expected to bring back New Yorkers to their primary residences. However, about 40% of parents have decided to continue remote education for their children during the first couple of months of the school year. This is a huge number of people, considering that the New York City school system is one of the largest in the country. The parents who prefer remote education belong to wealthier families. As most of such families already left New York City during the earlier months of the pandemic to live in suburban second homes, the rental market will be majorly affected.
Another factor affecting residential real estate in the city is evictions. The Centers for Disease Control and Prevention (CDC) signed a declaration which stated that evicting tenants will be detrimental to public health control measures and would lead to the spread of COVID-19. Therefore, the CDC issued an order which bans residential evictions until December this year. To be eligible for this, tenants need to prove that they are unable to pay rent.
Landlords can, however, evict tenants on the basis of reasons other than non-payment. Because landlords have not been provided sufficient relief by the government during the pandemic, this order has faced criticism. In the meantime, the city has provided homeowners and landlords with a tax break until October, which includes overdue property taxes, sewer bills, as well as water bills.
The pandemic has caused a major financial blow to New York City’s residents, which has in turn had a domino effect on the residential real estate market. Although things were expected to look up after Labor Day weekend, there are several factors that will impact the future of residential properties in the city. However, the situation is gradually returning to normal, which offers hope that the residential real estate market will soon go back to how it was pre-pandemic.