If you read most click-bait headlines, the Big Apple residential property scene appears on the brink of collapse. A record 67,300 rental units are vacant! Sixty percent of available new condo units remain unsold! The number of empty rentals in Manhattan is now 4.3 percent — the highest it’s been in 14 years!
Some renters, we’ve been told, have taken advantage of expiring leases to leave the city for good. A few have fled to the suburbs, buying homes sight unseen, telling real-estate brokers, “I’ll take whatever you’ve got.” One recent story even claimed that New Yorkers are fleeing the city for Philadelphia. Based on net migration from February to September, 3,750 people have left the Big Apple for Philly, leaving approximately 8,319,590 of us behind. The exodus will imperil developers’ and landlords’ ability to stay afloat, which in turn threatens tax revenue on which the city depends!
It’s time for a reality check. We’re a bigger city than the handful of ultra-pricey Manhattan buildings that “everybody left in March.” The Big Apple historically thrives on long-term change and even on upheaval. Daily doom-mongering over every market blip is like TV sportscasters’ taste for useless, obscure, moment-by-moment statistical epiphanies that have no bearing on a game’s outcome.
Furthermore, there are signs that New York City’s property market is actually alive and well.
Enlarge Image Brooklyn condos are booming, selling 37.7 percent more than in August last year.Shutterstock
Case in point: Brooklyn condos are booming. A near-record 735 purchase contracts were signed in August, according to StreetEasy — 37.7 percent more than in August 2019. The demand was across all price points.
Meanwhile, Curbed reports that rents are actually rising by 0.3 percent in Queens neighborhoods that were most harmed by last spring’s horrific COVID plague — including in East Elmhurst, Corona and Jackson Heights.
StreetEasy economist Nancy Wu offers a wise perspective: “People move out of New York all the time. The people who are moving to the suburbs to start a family there or to have a bigger place are looking now and buying their houses now, rather than renting in Manhattan for a few more years.”
Meanwhile, people haven’t stopped moving in the opposite direction, noted David Giampietro, head of moving company FlatRate Moving. “We haven’t seen that big of a drop for people moving into the city,” he said, adding that many continue to come here for jobs especially in tech companies.
Enlarge Image A co-op duplex at 834 Fifth Avenue that sold for $55 million last year was originally listed at $120 million — proving Manhattan prices were overheated well before COVID.James Messerschmidt
On the high-end of the market, the number of over-$4 million “luxury” apartment purchase contracts in Manhattan last week was the highest since March. The 21 deals were three more than in the same pandemic-free week last year, The Real Deal reported.
Soho isn’t dead despite a blight of empty storefronts. A penthouse at 421 Broome St. sold two weeks ago for $35.14 million — the neighborhood’s priciest purchase ever. Yes, it was much less than the $65 million the seller originally wanted several years ago, but so was Susan Gutfreund’s $55 million sale of her 834 Fifth Avenue co-op duplex she originally put on the market for $120 million. That deal happened last year before anyone had heard of the coronavirus.
Both “discount” sales illustrate that Manhattan’s residential market is absurdly superheated — but that was true long before COVID.
In the past, the city’s housing-market “crisis” has always been down to the scarcity of available rentals. Now, landlords have been forced to cut Manhattan rents by an average of 10 percent, and a cool-off might benefit everyone in the long run — especially millennials who moved out of the city temporarily to bunk with their suburban parents. Lower rents resulting from more empty apartments might also lure new people to town.
It took years for the dust to settle on the downtown housing picture following 9/11 and decades for the scene to come into focus after the scary 1970s. We must let time do its work in this most horrific season as well.
So, if you’re afraid your New York City home will soon be worthless, don’t jump off the Hell Gate Bridge just yet.