Many cities in the US are experiencing counterintuitive growth in property markets. As previously reported on City Monitor, data from HomeLight found that 97% of real estate markets around the country favour sellers, and real estate agents predict that the market will stay this way for some time. One of the markets with the most cause for optimism is New York.
So, what’s in store for residents in New York City? What can New Yorkers expect if they are hoping to buy or sell real estate in the city?
More people will continue to rent as home prices skyrocket
Buying a house is a huge investment, that much we know. However, if you’re hoping to buy a house in some of the more notable neighbourhoods in Manhattan, it could cost you upward of $5.5m (in Hudson Yards), but the median price is about $700,000 – which is a 10% increase year-over-year. Interestingly, the median sales price for a condo in the city is around $960,000.
If you’re a seller, these numbers may sound great, but for the average person who needs a place to live, these prices may seem astronomical. Despite this, 94% of real estate agents say that bidding wars are becoming commonplace and the prices continue to rise.
As a result of the ever-increasing cost of a house, the rental market is likely to see an uptick. In January 2020, the average rent for a Manhattan apartment ($4,210) would cost renters about 30% of their monthly income. However, renters could save themselves a big chunk of change if they opt for an apartment in Brooklyn ($2,936) or Queens ($2,412).
More homebuyers will consider buying apartments
We mentioned that the cost of a condo in Manhattan is around $960,000 depending on the size of the condo and location. However, you aren’t just getting a space to hang your hat. Condos are becoming more popular because they offer amenities that you may not get with your average apartment complex. For example, some condos will have a doorman and a superintendent available at all times. Some condos will also add a concierge who can help where the previous two cannot. The complex could feature a landscaped terrace, a game room, a place for the kids, or a gym.
People give up city life due to permanent remote work policies
Whether you see working remotely as a perk or not, you can’t deny that remote work is probably here to stay. Studies show that remote work saves employees time and money on commuting while boosting employee productivity by 5%. A study released by the Pew Research Center reveals that 71% of the surveyed 5,858 adults that currently work remotely say they’re working remotely the majority of the time. What’s more interesting is that 54% of remote workers would love it if their company adopted this work model for good.
The possibility of working remotely on a permanent basis could be the very thing that makes people consider leaving the Big Apple and setting down roots in a quieter, more affordable area. Between 1 January and 1 December 2020, 3.57 million people moved out of NYC and opted for suburban communities or moved out of state entirely. As a result of the exodus, 95% of real estate agents are seeing a higher demand for houses in suburban neighbourhoods.
A word of caution: there could be trouble on the horizon for those who need to sell their homes while buying a new one. While it’s a strong seller’s market and you’ll have no problem getting a buyer, you’re going to have to pull out all the stops in order to get your offer accepted when you find a house you want to buy.
Brick and mortar shops will fade, but restaurants and bars will not
For the past year and a half, we’ve had to stay at home. All of our shopping was done online and ordering take-out was a necessity if you didn’t want to cook. This led to smaller shops closing down because they couldn’t compete with huge US corporations like Amazon or Walmart. Sadly, small brick and mortar stores shut down and we don’t know if or when they’ll reopen.
The number of retail stores in New York City may have decreased this past year, but restaurants and bars are likely to get a second chance because people need to eat. When the pandemic is truly over, people will flock to their favourite eateries or watering holes. Even if these places don’t see the volume of patrons they did pre-pandemic, delivery services such as GrubHub or DoorDash will still be in use.
The love for New York City will never die
The past year and a half has shaken us to the core and we’re still trying to navigate this new normal. We’ll probably never go back to pre-pandemic life, but New York City is one of those places where folks will adapt and roll with the punches. Businesses will adapt and employees will embrace the work-from-home way of life, regardless if they stay in the city or migrate elsewhere.
New York City is one of the most resilient cities in the US and there will always be an interest in living there. There’s culture, shopping and plenty of things to do. While we may not know what the future will be like once the pandemic has been declared over, the real estate market will continue to thrive.