New York City has always been a bustling place that many have flocked to, which has led to the city’s consistently high-priced real estate. However that all changed in March of 2020 when the Sars-CoV-2 virus spread throughout the world, causing everyone to stay home. Interestingly, there was a large number of New York City residents (just under 4%) who decided to flee the city, and New York state lost a large number as well (1.8% total). As a result, real estate prices were reduced to attract anyone willing to buy in the declining real estate market.
Landlords who were desperate to find tenants lowered prices drastically in what is referred to as “Covid deals.” However, as vaccines were rolled out and people returned to normal life, landlords realized they could raise rent prices, and they did so opportunistically. In 2021, Bloomberg found that landlords increased rent by up to 70%. The result is that 44% of available apartments in New York City are due to tenants who got Covid deals and cannot pay the exorbitant fees. This has caused almost 5% of New York City apartments to be vacant.
New York City’s median sale prices for homes have risen dramatically despite Covid-19. In the second quarter of 2020, the median home price in New York City was $675,000 and today it is $830,000. And in New York State, the median home sales price went from $379,000 in 2021 to $429,000 in 2022, an increase of 13%. Although the cost of homes in New York State has risen significantly, the inventory of houses has shrunk by 14.3%. Furthermore, homes in New York City are selling faster than before, with an average selling time of 49 days, down from 80 days last year.
Real estate prices will continue to trend up as more people want to come to New York and are not spooked by the rising cost of living.
Photo Caption: New York City skyline
Photo Credit: Pixabay