NYC: The Demand for Westchester’s Suburban House Persists

New York City is amongst one of the most competitive and expensive housing markets around the globe, and it has also been amongst the most badly hit by the pandemic. Is New York still New York when you can’t eat a gold-flaked donut while watching Yoko Ono scream gibberish?

Real Estate markets have experienced a great deal of turbulence over the past few months. Certain cities and states had put into effect strict coronavirus guidelines, which caused many to flee these areas due to the economic fallout and the personal infringement they felt these guidelines had, such as the forced closures of businesses. People are moving to the suburbs, bidding up those prices, while those that choose to hang around are more likely to find alternative options for less.

Similarly, the completed sales of single- and multifamily houses, co-ops, and condos totaled 2,489 in the first quarter, up 37% from a year earlier, appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate said in a report Thursday. With that, the deals pushed the supply of listings in the county down 17% to 2,533, the fewest since the end of 2001.

Moreover, it was also seen that purchases of single-family houses gained the most among all property types, surging 44% from a year earlier to 1,528. And in the luxury category, the top 10% of the market, starting at $1.6 million in the quarter sales jumped 43%.

Despite vaccinations bringing hope for safer city life and the reopening of offices in the future, people are still clamoring for space in the greener pastures north of Manhattan. Unlike before, people now want to have both a city apartment as well as a home outside the city.

This has in turn led to an increase in competition and prices amongst buyers, with the median for all Westchester homes climbing 11% from a year earlier to $565,000. Single-family houses sold for a median of $700,500, up 9.5%. Increased demand of selling properties has carved its way into the market, in which a mere 3.1 months is all that it’ll take to sell all the properties available on the market in the entire country.

New York’s battered office market shall be the one to suffer beneath all if workers prefer working from home rather than travelling into the city each day for work. Available space in Manhattan is now at the highest that it has been in at least 30 years. With hope and new changes taking place, all we can do is hope for a better future for New York.

 

New York: The Revival of Manhattan’s Office Buildings

Disrupting the future of work was something we expected the robots to do, but then Covid- 19 entered the party in style, sweeping everyone off their feet and becoming the talk of the town. At any other time, open-space offices are usually a sight filled with bustling and activity. But with employers urged to work from home as a result of the coronavirus pandemic, things are no longer the same.

The impact of the coronavirus outbreak was very sensibly dealt with by New York City, which in the very early stages of the pandemic had shifted their staff to remote work. Due to safety concerns and remote work, office buildings across the country have remained unoccupied for the past year, and Manhattan has been no anomaly. But things have gradually begun to change in New York City. According to commercial property data platform VTS, the number of new weekly requests from companies seeking out office space climbed 57% compared to the period of July of 2020 through November of 2020.

The driving demand due to lower rents has been on the rise. In February, average asking rents for Manhattan office buildings fell to $73.12 per square foot, the lowest level since March of 2018. Therefore, taking these into account, it is not at all astonishing that a few firms are attempting to capitalize on the chance to secure a Manhattan lease at a more appealing value point.

Companies are making full use of this opportunity in trying to lock in deals before prices climb and the selection of available space dwindles. Moreover, once vaccinations become more accessible and workers are called back to work, the scoring of New York leases on low prices will not be as simple as before.

Furthermore, a lot of office space needs are being reconsidered by companies. The requesting leases are looking at 10% less square footage, on average, compared to their pre-pandemic footprints. Also, plans that include Hybrid work models and keeping few workers remote on a long-term basis are being made by tech companies once the pandemic ends. Overall, leaving them with 31% less space in their Manhattan leases.

The pandemic has taken a serious hit on office building REITs (real estate investment trusts) where Manhattan’s largest office building landlord, SL Green Realty (NYSE: SLG), has seen its shares lose more than one-third of its value. This rise in leasing activity can act as a benefit to many similar REITs.

In conclusion, care needs to be taken while agreeing to discounted rents in the context of long-term leases due to the chances of Manhattan office buildings recovering once the pandemic comes to an end as problems in the underselling space could arise from a revenue standpoint. Despite everything going on at the moment, the fact that there’s an increase in interest is certainly encouraging and comforting to many.

NYC Residential Market: Queens enters the $600k Club

Covid-19 is not only a global health crisis, but it has also severely affected the global economy and the financial markets. The rapid spread of the virus has had a negative impact on the financial markets all over the world, causing further economic disruption. The real estate investors have suffered unprecedented levels of loss as coronavirus further brings more uncertainties into the global market. Just like that, New York is also one of the cities that got severely affected by the global pandemic, havocking its entire real estate and residential market. New York has been struggling in numerous sectors since the start of covid-19, negatively impacting its residential market. For this reason, many people fled to different boroughs with low rent.

According to PropertyShark’s survey, Queens was found to be the most stable real estate market in NYC in 2020. Despite the decline in home sales throughout 2020, the Queens real estate market fared better than all New York City boroughs and was declared as the most active real estate market in the past year. However, the first few months of the pandemic had clear significant impacts on its residential market as it saw 26 percent fewer deals made in the market compared to the previous year.

During the start, sales in the borough more than halved, falling by 54 percent year-over-year in April, with 552 sales, according to PropertyShark. Though sales bounced back up in the early summer, hitting a 29 percent year-over-year decrease in July, sales dropped back down by the fall. In September, “confidence [in the market] evaporated,” according to the report. Sales activity that month fell by 56 percent when compared to September 2019.

However, in October, the market bounced back when home sales doubled as more buyers returned to the market, and since then, the sales have not declined. The sales have remained consistent since October 2020, reaching a peak in December 2020, increasing the home sales to 3 percent compared to the year before, the report said. Moreover, according to PropertyShark the median prices kept increasing regardless of the low home sales.

Furthermore, in the past year, the median sales price in Queens hit or rose above $640,000 three times, the report said. Overall, the average price during the pandemic in the borough was $600,000, a 9 percent increase compared to the year prior.

Overall, the other boroughs experienced similar situations making Manhattan the only borough to suffer the most as its median sale price dropped 8%. However, little by little, we are witnessing the evolution of the residential market and hope that it bounces back.

NYC’s Suburban Home Sales continue to boom

The coronavirus outbreak has affected the real estate market all around the world, and many of us assumed that normal activities would be temporarily halted. A year later, everyone is in the same boat. In 2020, as soon as the pandemic hit New York City, people packed their stuff and moved to the suburbs, and the remote work gave them another reason to leave the city. Throughout the US, the virus caused people to move out of the cities to seek larger spaces instead. For this reason, in 2021, New York City’s suburbs continue to boom because the city’s residents don’t want to move far away. After all, they might get called back to the office and are still hoping that the nightlife would return to normal. Therefore, the current situation has led to an increase in NYC’s suburban home sales.

Since there is a high demand for homes in the suburbs, the housing market is exhibiting one of the tightest markets. In Westchester County, signed home contracts have exploded since January, with most sales stemming from homes priced at $1 million to $2 million. And among sales that closed this past winter, the average time from listing to going under contract shrank to two months. Meanwhile, over in New Jersey (the northern and central part of the state are often regarded as suburban NYC), closed sales in January rose 17% despite there being nearly 44% fewer homes available on the market. Not only that, but the median sales price climbed about 20%.

Similarly, Long Island’s residential market is performing well due to an increase in buyer’s demand. On the South Shore, there’s just about a month’s supply of accessible homes to buy, whereas in other areas, there are hardly any available homes.

Moreover, in Fairfield County, Connecticut, real estate investors have seen a major surge in home sales considering the flat sales a year ago. Even though Fairfield is quite far away from New York City than popular suburban hubs like Greenwich and Stamford, the sales clearly show the extent to which the homebuyers will go to acquire a home in the respective vicinity.

Overall, the home sales in NYC’s suburbs are escalating continuously, in a progressive way. Real estate investors are facing a hard time trying to squeeze in as many buyers as possible. Hence, there’s no doubt that it is tough to get a home in NYC’s suburbs at the moment. But we are hoping that NYC’s residential market will get back on its feet in no time, and gradually suburbs would start to open up.

New York plans to convert Hotels & Office Buildings into Affordable Housing under State Senate Bill

New York City’s real estate and commercial districts have been hobbled by the Covid-19 pandemic. The majority of the population fled to the suburban to protect themselves from the virus. With coronavirus comes a huge risk of homelessness. Experiencing homelessness has always been a dire health risk, and Covid-19 has only worsened that danger.

Unhoused people are disproportionately affected by health conditions that can make covid-19 cases more severe and often forced to shelter, eat, and access hygiene in congregate settings where social distance is difficult to maintain. A report conducted by the Coalition for the Homeless estimated that the COVID-19 mortality rate for sheltered New Yorkers experiencing homelessness was higher (321 deaths per 100,000 people) than the overall rate (200 deaths per 100,000 people). A study modeling future of COVID-19 related hospitalizations and mortalities among American populations experiencing homelessness estimated a peak infection rate of 40%.

Given the heightened risk that COVID-19 poses to individuals experiencing homelessness has been growing at a rapid pace and suggesting responses for agencies to implement to mitigate this crisis within populations experiencing homelessness. Given the current situation, In Manhattan, the overall commercial vacancy rate increased to 13.3% in the third quarter of 2020, the highest number in 24 years, according to a report from real estate services firm Cushman & Wakefield.

Experts knew this from the start, and they have launched heroic efforts to create safe places for unhoused people to shelter and quarantine during the pandemic. Many of those programs, especially those that placed homeless people in empty hotel rooms, have been successful. Now, under the Biden administration, advocates are hopeful that they’ll be able to expand and improve those programs and treat homelessness as the solvable problem it is.

Under the new Senate bill, building owners could sell their properties to the state to allow for the construction and conversion of permanently affordable housing for people who are street homeless or living in shelters and for low-income residents. New York state could buy financially distressed office buildings and hotels and convert them into affordable housing for homeless and impoverished New Yorkers under a bill being considered in the state Senate.

The coronavirus pandemic has affected every part of New York City, from tourism to the real estate industry, disrupting the entire mechanism. Although the state-imposed an eviction moratorium during the pandemic, according to housing advocates, the city still faces an affordable housing crunch.

New York: Manhattan’s Real Estate Agents are taking TikTokers help to find Renters

Industries that rely heavily on in-person, face-to-face contact have had to adapt quickly in order to stay relevant amid the pandemic. One of those industries is real estate. Instead of hosting open houses and scheduling multiple showings in a day, agents are now resorting to delivering behind the screen, whether that’s streaming video walk-throughs for multiple clients at a time or working with other videographers to develop 3D tours.

The pandemic had an overwhelmingly drastic effect on rentals over the world thus, taking an alternative initiative became inevitably essential. Real Estate agents had to look for effective marketing strategies that could counteract the near-record vacancies. Embracing the change, agents used the power of social media to showcase available rentals to potential clients. The popularity of TikTok made it a useful marketing tool that could reach numerous people in no time. This marketing strategy was a safe option as it was free, done at the comfort of one’s own home, and saved time. With people stuck at home spending more time on social media, the intimate and unvarnished videos on TikTok drew an audience that hadn’t considered living in Manhattan before.

An agent at Highline Residential had just 5,000 TikTok followers in October of 2020, and now she’s up to more than 90,000, and deals sourced from TikTok account for her entire business. She said she fields about 45 calls a week from apartment-hunters who found her on TikTok, and she’s grown accustomed to conducting online tours for clients who might have come in person prior to the pandemic. She recently helped two roommates from different parts of America find an apartment at Hudson Yards and signed the lease without ever stepping foot inside the unit.

Alexander Zakharin, managing director at GZB Realty, has close to 80,000 TikTok followers, and contacts through TikTok now make up 75% of his business. In February of 2021, he closed a deal on an $11,000-a-month, two-bedroom apartment in Lincoln Square for a Russian influencer who found him on TikTok.

According to a 2019 National Association of REALTORS® study, 44 percent of home buyers started their search online, compared to only 17 percent who started with an agent. In all, 98 percent of homebuyers utilized the internet to search for homes. Social media has been credited as being the best source for generating high-quality leads, even better than MLS websites by 15 percent, and the more active the profile, the more eyes it will draw.

The Revival of New York City’s Real Estate Market

The global pandemic has turned the world upside down, deeply affecting the real estate market. The real estate market of NYC took a massive dip in the first quarter of 2020 when people started moving to the suburbs, and according to reports, 300,000 New Yorkers fled the city. The condition remained stagnant for quite some time, and it wasn’t until September that the real estate market slowly started climbing towards recovery. Therefore, as 2020 came to an end, we have seen a slight improvement in residential sales.

New York City’s real estate professionals are hopeful that the worst of the pandemic’s impact on the market is now behind us. According to a new report, the residential sales volume in New York City jumped 40 percent during the end of 2020. The sales are increasing in the city for three consecutive months. Paimaan Lodhi, a senior VP at the Real Estate Board of New York, said, “Brooklyn saw a 90% increase, and queens saw a 70% increase. There’s a sense the market has bottomed out, and we are now on an upward trajectory.” Nonetheless, the hottest markets in the outer boroughs are Brooklyn and Queens.

In Clinton Hill, Doug Bowen of Douglas Elliman said that bidding wars are happening for townhouses on the higher end of the market. “We’re just seeing activity in the townhouse market that we haven’t since 2013,” Bowen said. “The sense of privacy and outdoor space these properties offer. Moreover, according to the Real Estate Board of New York, in the last quarter of 2020, the residential sales volume jumped 40 percent citywide while the transactions grew 50 percent. “This end-of-year surge in home sales is another positive sign that the City has begun down a long road to recovery,” James Whelan, the real estate board’s president, said in a statement.

The virus disrupted the entire sales system of NYC’s real estate. The sales volume and transactions were 10 percent to 7 percent lower than the same span in 2019, but they gradually rose from October through December.

The following list shows the increase in the sales volume of NYC’s boroughs:

  • Brooklyn: Sales volume increased 90 percent and transactions increased 73 percent
  • Queens: Sales volume increased 69 percent and transactions increased 56 percent
  • Staten Island: Sales volume increased 56 percent and transactions increased 52 percent
  • Bronx: Sales volume increased 50 percent and transactions increased 39 percent
  • Manhattan: Sales volume remained flat while transactions increased 18 percent.

Overall, the real estate market is finally regaining its strength and heading towards recovery. We hope to see a flourishing NYC real estate market in 2021!

World’s Wealthiest City for Real Estate – New York

New York City is one of the richest and expensive cities, and despite the ongoing pandemic, it still contains the largest number of ultra-high net homeowners in the entire world. Everyone loves New York, and for the sixth consecutive year, it has retained its title for being the most prominent home to billionaires globally. Billionaires from all over the world travel to buy a piece of property in the world’s wealthiest city. The upper east side and Hudson Yards are home to New York’s priciest new Residencies.

According to data firm Wealth-X’s new report and real estate platform REALM, it is evident that the world’s most wealthy 25,000 ultra-high net worth (UHNW) individuals, those with a net worth of over $30 million, have primary or secondary residences in the Big Apple. In this regard, the Big Apple also sits on the throne with 24,660 individuals, followed by Los Angeles with 16,295, and London with a respectable 14,485 individuals.

“This reflects New York’s status as a global center for finance and commerce that offers a rich blend of cultural and luxury lifestyle opportunities, high-quality education and prime real estate,” indicated the report, which tallied figures from last December.

Therefore, the number of UNHW individuals, who had secondary homes in the city rather than primary residences, is just over half of 24, 660 individuals residing in New York. A report about the world’s leading markets for wealthy people included both primary and secondary homes to provide a more holistic view of the ultrawealthy demographic’s “residential footprint.” The footprint allows organizations to gain more knowledge about the world’s residential presence.

If we take a look at other cities, L.A. came in second place with close to 16,300 ultra-high net worth individuals, including two-thirds of secondary properties. Followed by London, the first non-U.S. city on the list, came in third with 14,485 ultrawealthy individuals, and then Hong Kong with 14,235 ultrawealthy residents, and Paris takes the last spot with 7,035 wealthy residents. In New York, London, and Hong Kong, secondary homeowners were more likely to be female and slightly younger than primary residents.

There is no doubt that New York is a prominent wealthy city. According to the 2020 Forbes World’s Billionaires list, 552 of the world’s 2,095 billionaires live in just ten cities, most of which reside in the Big Apple. Therefore, the count of billionaires living in New York keeps increasing, taking the total net worth of this city to US$424 billion.

What is NYC Mansion Tax?

The NYC mansion tax is a residential real estate transfer tax imposed on property purchases with a cost over a predetermined dollar sum, and for most New Yorkers, the Mansion tax is one of the potential closing costs when purchasing an apartment, co-op, or private home. The Mansion tax was put into effect in 1989 by New York state governor Mario Cuomo, and it was implemented to improve the state’s budget when the economy was plunging.

The Mansion tax remains unchanged until the mid of 2019, which stated that a fixed 1% of the purchase price would be charged for all residential sales of $1 million or more. The new mansion tax enacted in April 2019 has changed into an 8-tax bracket ranging from 1% to 3.9%.

The new Mansion tax required by New York State for properties between $1 to $2 million remains unchanged, which is 1%. But the new rates for the real estate tax kicks in when you purchase a residential property priced at $2 million or more, starting at 1.25 percent and capping out at a total of 3.9 percent for properties sold at $25 million or above. For example, if you are purchasing a condo or co-op for $2.5 million, you will have to pay the New York mansion tax at a rate of 1.25 percent, or $31,250, in addition to the other closing costs associated with your purchase.

NYC is one of the expensive cities to live in the world, and buying a property in NYC is quite burdensome because sometimes you have to use all your savings to pay for the taxes and fees. The Mansion tax is the kind of tax that is unavoidable, and therefore the easiest way to reduce your overall closing costs is the commission rebate. The commission rebate lowers your cost budget by nearly 2%, giving you the best opening to avoid the Mansion tax. If you’re buying a fully furnished co-op or condo, you can sell the furniture to pay the tax or buy it without the furniture.

Let’s take a look at NYC’s Mansion Tax Rates in 2021:

  • 1.00% for purchases $1,000,000 to $1,999,999
  • 1.25% for purchases $2,000,000 to $2,999,999
  • 1.50% for purchases $3,000,000 to $4,999,999
  • 2.25% for purchases $5,000,000 to $9,999,999
  • 3.25% for purchases $10,000,000 to $14,999,999
  • 3.50% for purchases $15,000,000 to $19,999,999
  • 3.75% for purchases $20,000,000 to $24,999,999
  • 3.90% for purchases $25,000,000 or greater

Hudson Yards: NYC’s Largest Private Real Estate Development remains vacant

The pandemic plunged the United States into a recession and left New York’s real estate market eerily deserted. As soon as COVID-19 hit the country, people started fleeing to the suburban to protect themselves from the virus. The residential and real estate market in the suburban increased first time in many years. Families moved to the suburbs, upgraded to large houses, and took advantage of low mortgage rates and flexible remote work policies. And rich families moved to their summer homes in the Hamptons.

Moreover, the United States’ largest private real estate development, Hudson Yards, sits like an abandoned home. The $25 billion property, which extends to 28-acre from Chelsea to Hudson, looks like a barren land. Its anchor tenant, Neiman Marcus, filed for bankruptcy and closed permanently, and at least four other stores as well as, several restaurants have also gone out of business.

When Hudson Yards was inaugurated in 2019, as the largest private development in American history, it aspired to transform Manhattan’s Far West Side, but now its future looks bleak. Hundreds of condominiums remain unsold, with no customers at the mall, and The office buildings, whose workers sustained many of the shops and restaurants, have been largely empty since last spring.

The second phase of Hudson Yards, including eight additional buildings, a school, more luxury condos, and office space, has now been put on indefinite hold. The project was supposed to be finished by 2024, but due to the current situation, the developer companies are seeking federal financing for the 10-acre land and now don’t have an estimated completion date.

With the pandemic forcing white-collar workers to stay home — and keeping foreign buyers and tourists away — it is not clear when, or if, demand will reignite for the vast supply of upscale aeries and blue-chip office space crowding the city’s skyline. “The challenges facing Hudson Yards aren’t unique,” said Danny Ismail, an analyst, and lead of office coverage for the real estate research firm Green Street. “All commercial real estate in New York City has been impacted by Covid-19. However, I would argue that post-pandemic, Hudson Yards and the area around it will be one of the better office markets in New York City.”

The whole nation is assuming that the hub of international companies will regain its stature, but we don’t know if it will be the same as envisioned.

 

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