How will Coronavirus affect the market?

David Goldsmith

All Powerful Moderator
Staff member
How Much Worse Will It Get for New York’s Restaurants?
The last proper restaurant meal I ate before the COVID-19 pandemic began ravaging the country, upending daily life as we know it, and killing tens of thousands of Americans was lunch at Thai Diner, a downtown breakfast counter that — true to its name — combines some of the best parts of the American diner experience with dishes, techniques, and ingredients from Thailand. In practice, the combination works tremendously well, and it’s safe to assume there has never been another restaurant quite like it. On the day I dropped by, the place was jammed, in part because its owners, Ann Redding and Matt Danzer, built a truly dedicated following with their first restaurant, Uncle Boons.

That following is so loyal, in fact, that it was a bit shocking when we got word yesterday that Uncle Boons will never reopen. It was also shocking when that news was followed a few hours later with the announcement that Gabriel Stulman will permanently close his restaurant Bar Sardine at the end of the month. And in Williamsburg, it appears the cocktail-and-oyster bar Maison Premiere is a goner, as well.

Well-liked bars and restaurants have been shuttering for months now, but as this pandemic drags on with no end in sight, the pace of these announcements feels like it is only accelerating, and the profile of the affected businesses continues to grow. Taken as a whole, it’s hard to shake the feeling that we are now watching the collapse of the entire New York City hospitality industry in real time.

The data that is available is, really, incredibly bleak: Nearly 200,000 food-service workers are jobless, and now face a future without the enhanced unemployment benefits upon which many depended. Eighty percent of restaurants could not cover their full rent back in June, and things have only gotten worse since then. Nobody can say exactly how many restaurants and bars will be forced to close permanently, of course, but every available prediction currently boils down to “most of them.”

If operators have landlords who are sympathetic to the reality of the situation, they might have a shot at hanging on. Increasingly, it is clear that many landlords are not. As Delores Tronco-DePierro, who has been forced to close her popular new West Village restaurant the Banty Rooster, told us, her proposal for a new, tenable rent structure was met with a landlord telling her she isn’t in the business of subsidizing tenants’ lease agreements. (The economic fallout is going to get worse — it just is — so where do landlords think their new, moneyed, rent-paying tenants will come from?)

And while it is abundantly clear that bars and restaurants need and deserve a bailout, it is ominous that one does not appear to be in the offing. Instead, the only new solutions being offered to full-service restaurants are the ability to sell alcohol to-go and expanded “outdoor dining.” What happens when the temperature cools off and people head back inside? What happens when winter arrives and, if the predictions are correct, the infection rate begins to surge even more?

Among all of the other news, concerns about restaurants can often feel slight. These businesses are, by design, distractions from the rest of the world, and in normal times there are always issues that feel more urgent. But New York City’s restaurants and bars comprise an industry that just recently employed more than 315,000 people. What happens when they’re all jobless, and the city’s storefronts remain vacant for years? These are not slight concerns.

Speaking to New York Times restaurant critic Pete Wells, the chef Greg Baxtrom, who has radically rethought his restaurant Olmsted over the past few months, says his only goal is to make it to next spring “without losing everything.” But what really happens in March or April? There will be a vaccine, maybe, and there might be something like a renewed sense of optimism, hopefully. But in order to get there, we will first have to make it through an exhausting, maddening winter. Without some kind of help, it is only going to get worse — much worse — before we can even begin to talk about how it gets better.
 

David Goldsmith

All Powerful Moderator
Staff member
At this point practically every single news source is running some version of the "record number of Manhattan vacancies" story. I have a hard time coming up with the scenario where this doesn't lead to lower prices in both the rental and sales markets.
 

David Goldsmith

All Powerful Moderator
Staff member
The problem with using Median Price of Contracts/Sales to gauge effect of COVID-19 on sales/prices:

Let's say you had a buyer who started looking to buy an apartment in January 2020 for $2.2 million. They continued their search through August 2020 and finally bought something. What price did they buy at? Probably $2.2 million. They didn't change their price range due to decreased prices, they just bought "more" apartment. In the short term median sales price is more of a gauge of what the buyer pool is than the change in what "same unit" apartment sales prices are. Same unit sales prices could be down 5% or 25% and still leave median sales price unchanged short term, and COVID-19 effects are still certainly short term.
 

David Goldsmith

All Powerful Moderator
Staff member
One of my sellers is TOM, one is renovating in preparation to sell, and my two active sellers requested that I stop holding Open Houses a couple of weeks ago. If someone wants an appointment to see those properties in the next week or two, I will probably ask the sellers to show rather than ride the subway "unnecessarily" myself.

I would, however, note that there are concerns that need to be balanced. Most of the people call for near-complete shutdowns are salaried.

Here in the gig economy, if I don't close deals my kid doesn't eat. And I'm in a better position than my friends in the arts are; they generally know that they can't work at all. Handing sixty billion dollars to the airlines won't help any of us.
I would really love to get an update on what happened with the 4 properties.
 

David Goldsmith

All Powerful Moderator
Staff member
Pandemic may wipe out $16B in construction spending: report
New York Building Congress slashes projections for this year and next
The pandemic has shaved $16 billion off projected construction spending in 2020 and 2021, according to a new report.
The New York Building Congress estimates spending will reach $55.5 billion this year, down from the $65.9 billion the group previously forecast. Next year, spending will be just about flat at $56.9 billion, which is also a drop from the trade group’s earlier estimate of $62.1 billion.
The group does not see 2022 as a comeback year, either: Spending will drop back down to $56.1 billion, the construction industry trade group’s report foresees.
The analysis points to the months-long shutdown of non-essential construction in the city during the pandemic, as well as the broader economic downturn gripping the region, as the source of the lower spending forecasts. Much of the drop can be attributed to decreases in spending in residential and non-residential (including office, retail and hotel) development.
Conversely, government spending on projects was forecast to increase this year and the next, despite massive pandemic-related budget deficits at every level of government and the big public authorities. The Building Congress forecasts that such spending will hit $21.1 billion in 2020, up from $19.7 billion the previous year, and then $23.1 billion in 2021. It will level out in 2022 at $21.9 billion, according to the report.

The Metropolitan Transportation Authority says it will have to cannibalize its capital program if the federal government does not answer its request for a $12 billion bailout, and the Port Authority of New York and New Jersey is seeking $3 billion from Washington.
Average construction employment between 2020 to 2022 is projected to drop 14 percent from the levels of 2017 to 2019. According to the Building Congress report, 128,200 construction jobs will be created in 2020. That’s projected to rise to 136,650 in 2021 and 140,200 in 2022.
(Source: New York Building Congress and New York Building Foundation)
(Source: New York Building Congress and New York Building Foundation)
 

John Walkup

Talking Manhattan on UrbanDigs.com
Interesting.... could land costs, construction costs, and money costs get low enough that we could see a new dev flurry despite the market? Build it now, sell it later?
 

David Goldsmith

All Powerful Moderator
Staff member
Back in June 2019 when the Rent Stabilization law changed I posited that construction costs were going to go down because of the decrease in jobs. Now with the decrease in new construction as well it's hard for me to think General Contractors and materials suppliers aren't going to get squeezed into eating some of their profit.
 

David Goldsmith

All Powerful Moderator
Staff member

New York lost $755M in real estate tax revenue this year: REBNY
Loss of high-volume transactions costs the government dearly during declines

September was the cruelest month yet for tax revenue generated from real estate sales.
The number of transactions has slumped, draining city and state coffers of vital revenue, according to a report released Thursday by the Real Estate Board of New York.
All told, the city and state have missed out on $755 million in tax revenue this year as tax receipts have fallen by 42 percent from last year. Tax revenue is responsible for 53 percent of the city’s operating budget, although property taxes, which have remained steady, bring in far more money than transfer taxes.
The biggest drop was in office sales, which fell from $1.5 billion in September 2019 to $641.9 million in September 2020 — a 56 percent decline, the report found. The size of each transaction, which can easily extend into hundreds of millions of dollars, offers a windfall in good times. But when the market goes quiet, the effect is equally pronounced in the opposite direction.

Declines in investment and residential sales — both of which were down 47 percent from the same time last year — resulted in a 36 percent drop in collected real estate transaction tax, or about $62 million.
The number of residential transactions fell 52 percent in September from the same period last year, while investment sales saw just 91 fewer transactions during the same time period.
But those missed investment sales may have cost the public $50 million in lost revenue, while the change in residential transactions accounts for a smaller loss of $12 million.
Total tax revenue from investment sales declined 48 percent in September this year compared to last, while declining just 18 percent for residential sales in the same period.

Condominium sales volume dropped 31 percent over the period, from $1.1 billion down to $779.2 million.
Transaction revenues, however, are just one piece of the real estate tax pie. Property taxes, which are New York City’s largest single source of revenue, rose from March through August by 3.9 percent to $16.3 billion, Bloomberg News reported.
As a result, the city’s tax revenue fell by 3.5 percent from March through August compared to the same period last year, a smaller drop than expected. Mayor Bill de Blasio has sworn off raising property taxes as a way to fill the budget gap created by the pandemic. He has been seeking a federal bailout to avoid slashing the city’s $88 billion budget.

There is one bright spot: Transaction revenues were up 13 percent in September from the month prior, suggesting a recovery could be on the way.
 

David Goldsmith

All Powerful Moderator
Staff member
How will NYC real estate fare without 65 million tourists?
Visitors accounted for nearly a quarter of retail sales last year

Last year, travel organization Worldstrides organized experiences for 550,000 students and generated $650 million in revenue.
But it was forced to issue refunds as the pandemic canceled trips, leaving the largest accredited travel program in the U.S. $768 million in debt. Worldstrides and 22 other affiliates of parent company Lakeland Tours filed for Chapter 11 bankruptcy July 21.

With the coronavirus cutting off tourism like a tourniquet, the damage is spreading across economies — such as New York City’s — and real estate interests that rely on it.
“Any time that we are in a recession, hospitality within the real estate industry is the first one getting hit really hard,” said Yildiray Yildirim, the director of Baruch College’s Steven L. Newman Real Estate Institute.

More than 65 million tourists visited New York City last year, according to think tank Center for an Urban Future. And they opened their wallets upon arriving.
Pre-pandemic, tourists were responsible for 24 percent of credit card sales at New York City restaurants and bars and 18 percent of all Visa transactions at retail stores in the city. New York was home to 291,000 tourism jobs, more positions than the finance or tech sector contributed, the think tank reported.

Those jobs are evaporating as people avoid flying, international travelers are largely prohibited from entering the country and visitors from 34 states (and counting) are being told to quarantine after entering New York.

The hospitality industry has shrunk like ice on hot asphalt. Last month, dozens more hotels laid off staff in a bid to survive.
Other businesses relying on travel have been similarly hurt. Golden Touch Transportation of NY, a charter bus and limo service, will close at the end of September, according to a Department of Labor filing. Some 213 employees will lose their jobs. In March, Ovation Travel Group laid off 106 employees.

Even NYC & Company, the city’s official marketing and tourism partnership organization, laid off 77 in late April.
Although the airline industry received a $32 billion federal bailout and smaller businesses have used Paycheck Protection Program loans to tread water, the interconnectivity of the industry means that one company’s financial devastation can have a domino effect, according to Alexander Tiktin, a bankruptcy attorney at Davidoff Hutcher & Citron LLP

“If you have a travel agency filing for bankruptcy, unsecured creditors that are owed debts by that travel agency may have their claims wiped out, and that could have far-reaching effects,” Tiktin said. “For example, if a travel agency owes a substantial amount of money to one of its contractual partners, such as an airline, a cruise line or hotel chain, that entity that it owes money to may not be able to make any recovery.”

The result could be a chain reaction of insolvency across the industry, he said.
Some attractions have reopened, albeit at partial capacity, and are starting hyperlocal campaigns to ride out the shutdown. NYC & Company’s “All in NYC” encourages New Yorkers to eat out, shop and visit tourist spots.

Experts applaud the effort, but hesitate to say it will prevent doom.
“It’s not going to be the same. It’s not going to be enough,” Yildirim said. “But then the question is how to minimize your marginal losses.”
For retailers that benefit from travel, such as restaurants and stores, the past five months have been devastating.

Between 25 percent and 35 percent of revenue at Saks Fifth Avenue is estimated to come from its Fifth Avenue flagship, which is normally filled to the brim with tourist shoppers, according to a 2018 Center for An Urban Future report. This year Saks was forced to lay off staff.

Other tourist traps, including Neiman Marcus in Hudson Yards and Valentino on Fifth Ave, have closed permanently. Both cited the pandemic and changes in how people will shop coming out of it.
That kind of thinking is a concern for tourism experts: If the pandemic has long-term effects on how and where people travel, some businesses will not bounce back.

Even if travel eventually returns to normal, as John Gerner, the managing director of Leisure Business Advisors, expects, he noted that companies will have to justify the high costs of staying open in the city until then.
“If we are now in a situation where that high potential reward no longer seems as apparent, then people are really going to start looking at the cost of operating, and it’s going to put real pressure on them to find ways to economize on that,” Gerner said. “And if they can’t, then they’re just not going to be able to continue operating.”
Tourism, Engine for N.Y.C. Economy, May Not Fully Recover Until 2025
A new forecast projects a rebound in visitors starting in mid-2021 and taking at least four years to return to pre-pandemic totals.

Double-decker sightseeing buses carried fewer than 10 passengers on runs around Manhattan on Monday. Big ferries arrived at the Statue of Liberty with their lower decks nearly empty. Some of the city’s largest hotels had few guests, while others were housing homeless men who had been cleared out of shelters to curb the spread of the virus.
The pandemic triggered a free-fall in tourism to New York City, one of the world’s most popular destinations. A new forecast predicts that the influx of tourists will not fully rebound for at least four years, a somber assessment that reflects one of the biggest challenges to the city’s recovery.
The surge in tourism in recent years has been a vital pillar of the city’s economy, supporting hundreds of thousands of workers across a range of industries, from hotels to restaurants to Broadway.
New York drew a record 66.6 million visitors in 2019 and was on pace for even more this year, according to the forecast released on Monday by the city’s tourism promotion agency, NYC & Company. Now the city is likely to reach just one-third of last year’s total.

The collapse of tourism has been a key reason that New York’s economy has been hit harder than most other major American cities. Hundreds of restaurants, many of which rely on out-of-town visitors, and several large hotels have closed for good. Before the shutdown in March, the hospitality industry provided as many as 400,000 jobs and drew $46 billion in annual spending.
Seven months later, at the end of October, more than 1.3 million residents were collecting unemployment benefits: The city’s unemployment rate is 14.1 percent, more than double the national rate.

The challenge of luring visitors back to New York in significant numbers could become even greater with the virus surging again. The number of daily cases in the city has surpassed 1,000 for the first time since the spring.
Even when the pandemic ends, the return of international visitors, who stay longer and spend much more than domestic visitors, is likely to be sluggish. The number of foreign tourists in the city is not likely to return to its 2019 level before 2025, the forecast shows.

“It’s going to be a very slow build initially,” said Fred Dixon, the chief executive of NYC & Company.
The revival depends on the distribution of an effective vaccine, Mr. Dixon said, which public health officials have said is not likely to happen until late spring or early summer. Until then, the flow of visitors will remain at a trickle, he said, auguring a difficult winter for many businesses.
The loss of tourism has been especially acute for less-educated workers, said James A. Parrott, director of economic and fiscal policy at the Center for New York Affairs. The hospitality industry added 130,000 jobs in 10 years before the pandemic, making it the largest employer of less-educated workers in the city, he said.

CORONAVIRUS BRIEFING: An informed guide to the global outbreak, with the latest developments and expert advice.

“The tourism boom in recent years meant that thousands of New Yorkers without a college degree saw substantial real pay increases,” he said. The predicted slow recovery “means New York City is likely to go without tens of thousands of jobs in hotels and restaurants that, before the pandemic, were providing steadily rising wages to New Yorkers without a college degree, 80 percent of whom are workers of color,” Mr. Parrott added.

Leisure and business travel skidded to a standstill in mid-March and has been on hold since then. NYC & Company estimates that 12 million people visited the city this year before the shutdown, but the total in the ensuing nine months may only reach 10 million, a figure that includes all of the nurses and other essential workers who arrived in response to the coronavirus crisis.
More than 60 hotels have become temporary homes to roughly 9,500 homeless people who were moved out of crowded shelters to prevent the spread of the virus. The $120 a night per room the city pays hotels that have taken in homeless people has provided badly needed financial relief, though in certain neighborhoods the policy has been a source of contention.
The disappearance of visitors has ravaged business like TopView Sightseeing, which organizes bus tours of the city. Overall business has dropped more than 90 percent since before March, said Jonathan Hengal, senior director of sales and operations.
Before the pandemic, tours would hold more than 80 people — often reaching full capacity at 89. Now, 35 people might show up on the most crowded weekend days, while on a Monday afternoon numbers could fall below 10, Mr. Hengal said.

“It’s been devastating,” he said. “And we don’t know where this is going. Everything’s been incredibly uncertain.”
Statue Cruises, which ferries tourists to Liberty Island, has been carrying 8 to 15 percent of its pre-pandemic loads on weekdays, said Rafael Abreu, the company’s director of sales and marketing.
“It’s much worse than 9/11 or Hurricane Sandy,” Mr. Abreu said.
Still, there were some tourists to be found on Monday.
At Duffy Square at the northern edge of Times Square, Siria Hidalgo was taking photos with her boyfriend, Luis Miranda, 32. The couple had arrived in New York on Sunday from Puebla, Mexico. Ms. Hidalgo, 33, said the combination of low airfares and pleasant late autumn weather lured them to the city.

“We’re taking all the precautions, and we’re trying to be as safe as we can,” she said. “But once the weather gets colder and if things get even worse, it’s going to be even harder to travel. So we wanted to still come while we can.”

Talia Stewart, 31, held two bags from H&M as she walked through Times Square. Ms. Stewart said she was visiting from Chicago for a friend’s 30th birthday. The celebration was initially envisioned as a night out at bars in Lower Manhattan, but instead, she and five others gathered on the rooftop of a friend’s apartment building to celebrate.
“We have no idea when we’re going to be able to see each other again,” Ms. Stewart said. “So we all got tested, we all kept masks on if we were close together, but it was important to not let the pandemic ruin everything for us.”

NYC & Company counts all overnight guests and anybody who travels from more than 50 miles away as a visitor. After the shutdown, the agency abandoned its forecast for this year and beyond. Its new forecast calls for 38.2 million visitors in 2021, rising to 69 million by 2024.
But fewer than 5 million of those projected 2021 visitors will come from outside the country, the forecast predicts. And by 2024, that number will still not have returned to the 13.5 million international visitors the agency counted in 2018 and 2019.
The typical international visitor spends four times as much money during a visit as the typical domestic visitor does, Mr. Dixon said.
Given that the country’s borders have largely been closed since April, virtually all of those arriving in the city have been domestic visitors. In late summer, tourists began to dribble back, mostly for short weekend stays, Mr. Dixon said. But hotel industry officials said the quarantine restrictions that Gov. Andrew M. Cuomo imposed on visitors from most states emptied out many rooms.

Mr. Dixon said he hoped his agency could accelerate the timeline for recovery with a coordinated promotional campaign once travel begins to pick up. Doing so will be onerous, though, because the agency has laid off nearly half of its staff of 140 employees and the city cut its funding twice this year.
The recovery will also be complicated by the dilemma businesses and performing-arts organizations will face in deciding whether to reopen to lure visitors or wait for them to reappear before starting up, he said.
Broadway has repeatedly extended the length of time it will remain closed. The earliest theaters are expected to open is May 30.
“Many look at Broadway as the dinner bell,” Mr. Dixon said. “As soon as that dinner bell rings, people are going to come far and wide.”
 

David Goldsmith

All Powerful Moderator
Staff member
Tourists Are Not Coming And Residents Are Fleeing New York City

New York City has been hit hard by the Covid-19 pandemic with roughly 24,000 deaths attributed to the disease. The City is world renowned for being the epicenter of finance, fashion, media, culture and entertainment. It boasted—up until recently—a buoyant, bustling social and nightlife.

People moved to New York to enjoy the diversity of people, top-tier restaurants, museums, opera, clubs, bars, concerts, Broadway shows, a wide array of attractions, plentiful job opportunities and a high-energy, fast-paced environment. It was reported that in 2018, 65 million tourists flocked to New York City. They’d rent a hotel room and visit all of the iconic places, such as the Statue of Liberty, Empire State Building, Wall Street, Times Square and enjoy a Broadway play, music concert, shopping at upscale stores and dining out choosing from the extensive array of cuisines available.
The situation has changed dramatically. Manhattan has passed some of the strictest lockdown restrictions in the nation. All nonessential businesses were ordered to shut down. The once-overcrowded hustle-and-bustle streets looked like ghost towns. Slowly the bans were somewhat softened, but a recent second wave of the outbreak looks like there will be lockdowns once again.
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Many people found themselves stuck in small, cramped apartments, as they were ordered to stay at home. The restaurants, clubs, gyms, hair salons, museums, concerts and sporting events abruptly closed down. There are reports of increases in lawlessness and crime. There were 344 murders in New York from January through September. The presence of homeless people became more widespread on the streets of New York.
Residents started questioning why they are paying so much money for rent when they can’t avail themselves to all of the offerings of Manhattan and are afraid of going outside. As job losses became more prevalent, city dwellers had to wrestle with paying a large amount of their salaries in housing costs and taxes, while either not having a job or holding onto their positions for dear life.

Prominent companies, including Google, Twitter and Facebook, offered their employees the option of working from home for the foreseeable future. A large number of other CEOs followed suit and offered this opportunity as well. The work-from-home movement untethered people who’ve been confined to a place that only offers a reasonable commute to work. As employees are able to work remotely, they can now live wherever they’d like and don’t have to remain in New York.
Roughly 300,000 residents have fled New York within the last eight months, according to the U.S. Postal Service. This number is likely higher, as the data doesn’t include all members of the household. A large number of the people who are leaving are wealthy. They have the financial means to purchase large homes in the nearby suburbs of New Jersey and Connecticut, the Hamptons on Long Island. With the ability to work remotely, people have migrated to lower-cost, warm-weather states with low taxes.

In addition to the exodus out of New York, tourism has plummeted—due to the pandemic. Tourism is one the largest revenue generators for New York. It brings in an estimated $72 billion, but this year is different. There have always been talks of the demise of New York. Despite the negativity, the City continues to find a way to revitalize itself. It won’t happen quickly, though. The New York Times reported that it may take at least four years to see a turnaround.

The tourist trade is a big moneymaker for New York hotels, restaurants, bars, nightclubs, taxi drivers and a host of other businesses and people who depend on the visitors. Businesses that depend upon this trade may close their doors and lay off workers. Many of these people in the service industry won’t have many other options. The absence of tourists, residents leaving and a shutdown has hurt a large number of businesses, especially restaurants and hotels.
A sobering 1.3 million New Yorkers are collecting unemployment checks and the unemployment rate is over 14%. City officials and citizens are hoping for the rollout of a vaccine. Once the outbreak gets under control, the tourists will consider returning, so will the families that left. Until then, the outlook is bleak, but New York—as it always has—will rebound and restore to its former glory. It may take some time, but restaurants will reopen and people will go back to work.



 

David Goldsmith

All Powerful Moderator
Staff member
Richard Florida is only 10 months behind me.
"Perhaps the biggest change—and the one that looks most like a fundamental disruption—is in store for the central business districts of great cities, which pack and stack office workers in canyons of giant office towers. The pandemic has turned them into virtual dead zones. While many office workers will return once vaccines are widely available, the shift to remote work means a significant number will not. This will be wrenching for the restaurants and shops that depended on their foot traffic, and for city budgets, which stand to lose billions of dollars in tax revenue."
Will Coronavirus Be the Death of Cities? Not So Fast

An urban expert on how the pandemic will give us a once-in-a-century opportunity to reinvent our cities, suburbs and rural areas​


The Covid-19 crisis is bringing a Great Reset to our cities, suburbs and communities. Not just the health crisis—the economic and fiscal crises emerging in its wake, and the wave of protests for racial and economic justice that has swept up alongside it, are altering the way we live and work in powerful ways. This Great Urban Reset gives us a once-in-a-century opportunity to create more equitable and inclusive communities of all sizes and shapes.
In the wake of the 2008 economic crash, I identified the Great Resets that remake and recharge economic systems in the wake of crises. They do so by giving rise to new ways of living and working that enable the economy to expand and grow.
I called attention to two—the rise of great industrial cities like Detroit and Pittsburgh at the end of the Long Depression in the second half of the 19th century, and the wave of suburbanization that spurred economic growth after the Great Depression and World War II. We are going through a third today, which began during the 2008 economic crisis and is being ushered into place by the Covid crisis.
First, Covid-19 will not kill off cities like New York and London. Global cities will not only survive but revive—as they did after even deadlier epidemics, economic crises, wars and natural disasters in the past—as their commercial spaces are transformed into mixed-use areas where people live and work. This is because the clustering force—of talent and innovation—is a core characteristic of this new reset. But, smaller cities and suburbs as well as rural areas also have the ability to thrive as people flock to them because of their ability to do far-flung jobs remotely.
This pandemic, like pandemics through all of human history, is not a fundamental disrupter but an accelerator of trends already under way: “pull forces” that draw certain groups, like families with children, out of cities, and “push forces” that impel others, like the young and the ambitious, techies and artistic creatives, into cities, especially as they become more affordable.
(More)
 

David Goldsmith

All Powerful Moderator
Staff member
What will happen if there is a second lockdown?

New York's rollback of coronavirus reopenings threatens rental market recovery​

Gov. Andrew Cuomo has ordered bars, gyms to close at 10 p.m.​

fresh round of coronavirus restrictions is threatening the New York City rental market's budding recovery from a record surge in vacancies.

The new rules come just after the number of new leases rose to 5,641 in October, a 12% gain from the previous month and a 33% jump from the year before, making for the highest reading since the depths of the 2008 financial crisis, according to a report from Douglas Elliman.

“The market is finally to the point where it's starting to draw inbound activity instead of outbound,” said Jonathan Miller, CEO of the New York-based real estate appraisal and consulting firm Miller Samuel. “Every time there's a lockdown, it just pushes recovery further out.”

Indeed, the September vacancy rate of 6.14% was up from 2.03% a year ago, reflecting the toll exacted by months of business restrictions and social-distancing requirements in the most densely populated large U.S. city.
 

David Goldsmith

All Powerful Moderator
Staff member


Mayor Bill de Blasio stressed for the second time in two days Tuesday that believes a full shutdown akin to PAUSE in the spring is needed to curb the current COVID surge. It's the latest indication that harsher restrictions may come soon.
De Blasio says he has been in close contact with the office of Gov. Andrew Cuomo, who would make the ultimate decisions on any new COVID rules. But the mayor did offer up a suggestion -- one that involves a shutdown right after Christmas. It's not clear if Cuomo is on board with that idea or how long any such shutdown might last, but the mayor says he's hopeful it would just be weeks.
"Clearly these numbers are going in the wrong direction," de Blasio said Tuesday. "Unfortunately, and I don't say it with anything but sorrow, but I do think it's needed. We're going to need to do some kind of shutdown in the weeks ahead, something that resembles the PAUSE we were in in the spring."
That would mean essential work only and no outdoor dining, though the mayor said there could be some minor differences to the early pandemic closures.
"If we implement that with some good luck and hard work and the vaccine starting to help us we could be out of that in a matter of weeks," he said.

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The mayor's comments came a day after indoor dining was shuttered once again in the city by order of the governor. While no decision has been made -- at least publicly -- at this time, an apparent alignment between the mayor and governor on the issue is enough to raise eyebrows about the immediacy of new closures.
On Monday, as he celebrated the first vaccine dose in New York and confronted critics of his indoor dining closure, Cuomo warned that the state (or various regions within it) could be headed to total shutdown if current trends hold.
"If we do not change the trajectory, we could be headed to shutdown. That is something to worry about," the governor said. "We go back to where we were."
Cuomo has said he would order a shutdown if any region in the state appears on track to hit 90 percent hospital capacity within 21 days. No region is there yet. He says he authorized the dine-in closure in New York City to try to prevent that worst-case scenario. While the city's hospitalization and positivity rates are lower than most other regions in the state, the density that makes it one of the world's most vibrant places also makes it more vulnerable to exponential spread.
"The virus spreads much faster in New York City," Cuomo said. "Anyone who doubts that wasn't here in the spring or has the shortest memory imaginable."
The numbers amid this latest surge aren't nearly as stark as they were in the spring by any means, but new daily cases have been on the steep incline for weeks. Hospital admissions have been rising more slowly, a consequence of the flood in cases. More than 1,700 patients were hospitalized in the city with COVID-19 infections as of this weekend, almost triple the number a month ago.

Some patients will die, a tragedy the former epicenter of the national COVID crisis can least afford. The city has confirmed nearly 17,000 COVID deaths since March and likely has thousands upon thousands more fatalities that never were definitively linked to the virus but could be attributed to it in some way.
Cuomo reported more than 100 new COVID fatalities statewide Tuesday (128) for the first time in months.
This latest surge is expected to swell more before it ebbs. Cuomo and others, including Dr. Anthony Fauci, agree that the numbers locally and nationally will continue to increase well into January. The objective, Cuomo says, is to lessen the blow -- hence a revised winter plan that prioritizes hospitalization rates but also factors positivity rates, risk level of economic activity, transmission rates and population density into the equation.

Meanwhile, the U.S. continues to battle a crisis that appears only on track to intensify over the course of the next month or so despite the promise of a vaccine. To date, the country has confirmed more than 16 million COVID cases and topped 300,000 deaths, according to NBC News data.
Dr. Robert Redfield, the head of the Centers for Disease Control and Prevention, has warned the U.S. could see its tragic toll near 450,000 by February without aggressive actions to contain the anticipated holiday surge on top of the surge that has been underway for well more than a month across the nation.

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David Goldsmith

All Powerful Moderator
Staff member

NYC Residential Sales Take A Big Nose Dive In 2020, Study Finds​

Residential sales across New York City dropped 32 percent year-over-year in 2020, according to a new report by Property Shark.​

Demand in New York City real estate has plummeted as the coronavirus pandemic has led to many people fleeing the city for more budget-friendly locations that offer more space and better "bang for their buck."
In fact, more residents escaped from New York over the last year than from any other state, according to estimates released by the U.S. Census Bureau on Tuesday. New York City accounted for the bulk of the state's population loss, The Buffalo Chronicle reported.

As residents flee the "Big Apple" for greener pasture, this has forced real estate sales in many parts of the city to take a nose dive, a new study revealed. New York City rents have also fallen more this year than they did during the Great Recession, according to StreetEasy's November 2020 Market Reports.

"We expected the rental market to match the weakness seen during the Great Recession, but the fact that the market has surpassed that level in less than one year shows how serious the crisis caused by the pandemic has been," said StreetEasy Economist Nancy Wu in a news release.


In a separate report by Property Shark's annual ranking of NYC's Most Expensive Neighborhoods, residential sales across NYC dropped 32 percent year-over-year in 2020.

Median sale prices across the city revealed a rather even-keeled mixed bag, the Property Shark's study found. Overall, prices increased by only one percent year-over-year, resting at $660,000. However, a more granular analysis shows that, while 26 of NYC’s priciest neighborhoods posted price increases between 0.5 percent and 44 percent, the other 25 saw decreases ranging from 0.25 percent to 40 percent.

On a somewhat positive note, nine of NYC’s 54 priciest neighborhoods did actually experience an increase in the number of sales during this past year — seven in Brooklyn and two each in Manhattan and Queens, the study reported.

Here's a look at the top 10, along with their median price-points:

  1. Hudson Yards: $4,504,000
  2. TriBeCa: $3,157,000
  3. Little Italy: $2,750,000
  4. SoHo: $2,463,000
  5. Hudson Square: $2,100,000
  6. Theatre District-Times Square: $1,807,000
  7. Central Midtown: $1,790,000
  8. DUMBO: $1,625,000
  9. Flatiron District: $1,593,000
  10. Cobble Hill $1,491,000
Overall, sales activity decreased in 43 out of 54 — or 80 percent — of NYC’s priciest neighborhoods, the Property Shark's study found. While Hudson Yards had the largest drop in sales with an 85 percent decrease, Manhattan’s Lower East Side was also hit hard with a 67 percent drop in sales. On its heels were Chinatown and Greenpoint, where sales decreased by 62 percent and 55 percent, respectively.
 

David Goldsmith

All Powerful Moderator
Staff member

“A garbage year”: The state of Manhattan’s luxury resi market in 2020​

Contracts signed declined by 31% in 2020

Donna Olshan isn’t mincing words when it comes to the state of Manhattan’s luxury residential market in 2020.
“I just consider 2020 a year you can throw out,”Olshan said. “It’s a garbage year.”

It’s a sentiment that rings true on multiple levels, and in the context of Manhattan properties priced above $4 million — which Olshan has tracked since 2005 in a weekly report — the numbers are irrefutable.
According to her latest report, which looks at the year as a whole, there was a 31 percent decline in signed contracts in 2020 compared to last year.

And the past few years haven’t been that great: There was a steady decline in contract volume between 2013, when 1,372 contracts were signed for townhouses, condos and co-ops, to 2020, when just 645 similar deals were inked.
Given the pandemic, it’s hard to treat 2020 as a regular year. After the state locked down in the spring, luxury deals slowed to an average of four per week. Though the market later rallied, it wasn’t enough to get close to the 935 contracts signed in 2019. From a data perspective, “this will go down as one of these years with a big asterisk after it,” Olshan said.

The co-op market was particularly weak, with just 133 contracts signed in 2020 compared to 222 last year. Condos did better with a total of 418, though that was still a big drop from 595 last year. In 2015, when the condo market was at its peak, 904 contracts were signed.
Among the condos that went into contract, the average asking price was $2,733 per square foot, down from $2,802 last year and $2,825 in 2015.

When the pandemic first hit, many brokers (well, townhouse brokers) predicted single-family homes would come out a winner. After all, why would you want to stand in a crowded elevator to get to your apartment when you could walk right into a spacious home?

But in the luxury market, at least, those predictions may have been overblown. In total, 92 townhouses priced above $4 million went into contract in 2020, down from 114 last year. “What bears out is that cheaper townhouses sold,” Olshan said.
The average discount between the first and last asking price across all the properties types was 12 percent, up from 10 percent last year. But Olshan said that the full spectrum of discounts given in 2020 won’t be clear until all the properties that went into contract have closed.

Among all the downward-facing figures, there was one data point that increased this year: the size of homes that went into contract.
As New Yorkers grew accustomed to working from home, they sought out bigger properties. The average condo size of those that went into contract this year was 2,953 square feet, up from 2,874 square feet the year before.
 

David Goldsmith

All Powerful Moderator
Staff member
Looks like the media might finally be catching up with me.

Price cuts spur deals as glut of luxury homes lingers​

January rents were down 15.5% in Manhattan and 8.6% in Brooklyn from last year​


New York’s real estate market had a rough year in 2020 and price cuts portend a tumultuous 2021.
January rents were down 15.5 percent in Manhattan and off 8.6 percent in Brooklyn from the same month last year, according to StreetEasy, Bloomberg News reported. Home prices also were lower by 6.2 percent in Manhattan and 5.4 percent in Brooklyn.

The price cuts appear to have triggered more deals. Pending sales, or sales under contract, increased 31 percent in Manhattan from January 2020. In Brooklyn, pending sales increased 17 percent during the same period.

More sellers will likely be offering price cuts in light of a massive glut of apartments and homes sitting on the market, according to StreetEasy economist Nancy Wu.
This is especially true in the luxury sector. While January saw a 57 percent increase in high-end contracts from the previous year, Wu said inventory for luxury homes is still near all-time highs.
 
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