NYC’s Residential Market Recovery Hinges on COVID Vaccine and its Impact on Consumers and Business
John Jordan | January 25, 2021
WHITE PLAINS—Residential brokerage experts in the New York metro region believe the home sales boom in the New York City suburbs will continue in 2021 while the recovery of New York City’s market will depend heavily on the success of the COVID vaccine and its impact on if and when residents and businesses will return to Manhattan.
Top New York real estate leaders weighed in on the region’s residential market, from the latest prices in Manhattan to bidding wars in Westchester, and shared strategies for how Realtors can take advantage of the current dynamics, at a virtual panel held on Jan. 22 hosted by the Hudson Gateway Association of Realtors, Inc. and OneKey MLS.
Approximately 350 industry professionals tuned in for “Getting the Deal Done: The State of NY Real Estate: Setting Sights on 2021 + Beyond.” The panel featured Bess Freedman, CEO of Brown Harris Stevens; Jonathan Miller, president and CEO of Miller Samuel Inc. and Joe Rand, chief creative officer of Howard Hanna/Rand Realty and executive director, Broker Public Portal. The discussion was moderated by Brian D. Tormey, NTP, president of TitleVest, a leading New York City-based provider of title insurance and related real estate services.
“We’ve all had to pivot during the pandemic and we’ve seen tremendous innovation in our industry,” said Richard Haggerty, CEO of HGAR and President and Chief Strategic Growth Officer of OneKey MLS, the regional multiple listing service for New York, in describing how the industry reacted to the state-imposed shutdown of the real estate market beginning in March 2020.
In reviewing the market’s response to the pandemic, Haggerty said, “I have been in the business for 35 years, what we saw this year (2020) was staggering.” He related that after an active first quarter, the market was all but closed in March and for several months thereafter, but pent up demand fueled a robust market recovery in the third quarter and most notably the fourth quarter in the Hudson Valley.
He related that single-family home sales, despite the pandemic, were 14% higher in 2020 in Westchester County as compared to 2019. Rockland single-family home sales ended the year 14.7% higher, Orange County posted an 8.5% increase; Putnam’s single-family home sales spiked 20% and Sullivan County sales shot up 25.8% in the same period. Bronx County was the only market north of New York City to post lower single-family home sales, down 10% for the year as compared to 2019.
“Look for a V-shaped recovery,” said Miller. “And by that, I mean ‘vaccine.’ True stability doesn’t really happen until people feel safe.”
While most of the news out of New York City has been negative, Miller added he has seen an upside as more affordability is creating a “youth renaissance” in Manhattan’s rental space.
Miller said COVID-19 “crushed” the rental market in Manhattan, noting pricing was down some 23% overall in 2020, with some sections of the borough suffering pricing declines approaching 40%.
While Miller expects pricing to be soft going forward in 2021, the rental housing market was very active in December. He revealed that new apartment lease signings in December 2020 in Manhattan were at their highest level in 14 years.
Brown Harris Stevens’ Freedman agreed, noting that of late her firm has seen pre-pandemic like contract activity in Manhattan’s residential market. “It’s looking good thus far (in 2021),” she added.
Freedman also said the vaccine’s impact on the market will be critical to New York City’s recovery. “Having the vaccine in sight is excellent. It diminishes the uncertainty. The path forward is going to be a bit tough but at least we have some resolution.” She said it is vitally important to the future recovery of the New York City market that the federal, state and city governments get control of the pandemic.
Freedman said she’s optimistic for 2021. “New York City is going to do very well,” she said. “It’s still a buyer’s market—an opportunity market—rates are low. But theaters are going to reopen, restaurants are going to reopen … I’m doubling down on my prediction for New York City in 2021.”
Rand characterized the view of some that have predicted the death of urban centers due to COVID-19 as “crazy” and in fact said that many of the people who migrated out of Manhattan to the suburbs or elsewhere were people who were going to leave the city in the next couple of years anyway and were just pushed to make the decision early due to the pandemic.
“So, I think what is going to happen is that we are going to see it (migration out of Manhattan) slow and then in a year-and-a-half from now we are going to be saying, ‘There is no one moving from the city to the suburbs. They all moved back in 2020.’”
Rand also discussed trends in pricing north of New York City and the types of properties being sold.
“COVID is impacting pricing, in the short term, in two ways,” he said. “First, all that migration from New York City to the suburbs, those are higher-end buyers. So, the mix of properties being sold is skewing higher, they’re competing and pushing prices up. Also, the economic impact of COVID is disproportionately hitting lower-income people. And that’s really unfortunate … we should be doing more from a public policy standpoint to help people.”
“Getting the Deal Done” is part of the “Be Your Best” webinar series created by HGAR and OneKey MLS, to assist Realtors and agents during the COVID-19 pandemic. The event was sponsored by TitleVest.