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For everyone who’s wondering about the status of the real estate industry — this entire year has been a big question mark, or maybe an endless string of curse words. However, the real estate market is not in as much trouble as it appears.
If you’re wondering what to do next, I believe you should do exactly what you would do in the absence of a pandemic. You may Rent, Own, Sell apartments in NYC. However, you must do this with an open mind, as some areas of the country are more substantial and healthier than others.
Here’s how we think Covid-19 will impact NYC Rent this 2021
While certain areas, such as the inner city, are experiencing difficulties. The real estate industry in the suburbs and the rural regions are thriving. Based on the report released by the National Association of Realtors on August 21, 2020. Existing-home sales in the United States increased 24.7 percent in August, one of the best showings on record.
New York City’s housing market is one of the most expensive and competitive in the country. It has also been one of the hardest-hit areas by the COVID-19 pandemic, with the worst job losses among the country’s major metro areas.
However, buyers have made a strong comeback since the economy reopened last year, resulting in a busy fall and inter-home-buying season. New York has been recovering economically from the pandemic’s effects. While apartment rents have decreased due to high vacancy rates, strong buyer demand has altered the dynamics of the residential sales market, which had been cooling for nearly three years.
According to the NYSAR’s annual report. New York was a seller’s market in 2020 for most housing segments, as inventories remained historically low. At the sale, sellers received an average of 98.4 percent of their original list price, a 1.1 percent increase year over year. If the percentage is less than 100%, the home was sold for less than the list price.
A high list-to-sell ratio indicates a seller’s market, in which sellers have the upper hand in negotiations with buyers. In comparison to the previous year, active listings decreased by 22.6 percent in 2020. Reduced inventory exerts upward pressure on home prices. As a result, the overall median sales price increased by 11.6 percent year over year to $310,000.
Many industry experts have been predicting a solid property appreciation in New York in 2021. 2021 will be a fantastic year for property owners as the city prepares for a lengthy recovery. Diverse business sectors have been expanding in distinct ways and at varying rates. Current trends indicate that the New York housing market is hyperactive during the winter, with sales exceeding normal levels.
First, those who live in cities are taking advantage of the price reductions to upgrade to larger or newer apartments. The second group consists of New Yorkers who fled the city during the pandemic’s early stages in March or April but have returned. The third group consists of couples and families who have sold their suburban properties for significant price gains and are now venturing into the city for the first time, taking advantage of the lower prices.
Landlords and brokers agree that there is a complete recovery in NYC real estate that will occur anytime soon. Though NYC continues to have a near-record number of vacant apartments, there is still price reductions and rental increase in NYC.
Numerous landlords and buildings are also withholding vacant apartments from the market out of concern that they will further oversupply.
Rental growth is being driven primarily by wealthier renters, as the pandemic has largely escaped the economic fallout. In comparison, low-wage workers and service workers have been hit the hardest. Leases for three-bedroom apartments, which rent for an average of $8,000 per month, increased 171 percent in December from a year ago.
Simultaneously, effective rents for the smallest studio apartments fell 19 percent, while new leases saw much smaller gains.
The strength at the high end, fueled in part by the surging stock market, is reflected in the apartment sales market. While overall apartment sales decreased by 21% year over year in the fourth quarter. Sales of apartments priced over $5 million increased by 23%.
NYC Rentals have a consistent relationship with the patterns towards unemployment. The more the lower-wage earners have been disproportionately affected, there will always be a big hit with rentals significantly.