As of the beginning of May 2021, in New York City 48.9% of New Yorkers have received one dose of the COVID-19 vaccine, while 37% have been fully vaccinated. This coverts to 7.19 million people fully vaccinated, compared to approximately 106 million nationwide, or 32.3% of America’s total population. Though the vaccinations have slowed down from their initial surge in NYC, their apparent effects on the real estate market were what sellers and renters were hoping for.
The relatively mass availability of vaccinations seemed to provide a sense of stability to the real estate market in NYC; renters and sellers appear to now be able to gauge price and demand more easily. Additionally, according to Realtors, both average prices for rentals and sales in NYC have continued to rise these first five months of 2021, as the COVID-19 vaccinations became more and more available. In almost all prestigious NYC locations, studio apartments are now consistently renting for over $2500 per month and 1-bedroom apartments are averaging close to $3500 per month. These are more like the numbers we witnessed prior to the COVID-19 pandemics and prior to the moratoriums issued by the State of New York and City of Manhattan, which undoubtedly temporarily created downward pricing in the NYC real estate rental market.
Other housing statistics from Realtors offer the same conclusion: the stability of real estate prices in NYC have certainly increased by an upward trajectory. Steven James, President and CEO of Douglas Elliman, said there will be an immediate increase in activity once the vaccine is approved. He hinted that the best “opportunity is now” for prospective real estate investors because prices will only continue to increase proportionate to the amount of New Yorkers and Americans who get fully vaccinated. George Ratiu, a senior economist at Realtors, echoed Steven’s point by predicting “a gradual shift over the next six to eight months” in rising real estate prices in NYC.
Tag: real estate investment
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What the COVID-19 Vaccine Means for NYC’s Real Estate Market (May 2021)
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What the COVID-19 Vaccine Means for NYC’s Real Estate Market (May 2021)
As of the beginning of May 2021, in New York City 48.9% of New Yorkers have received one dose of the COVID-19 vaccine, while 37% have been fully vaccinated. This coverts to 7.19 million people fully vaccinated, compared to approximately 106 million nationwide, or 32.3% of America’s total population. Though the vaccinations have slowed down from their initial surge in NYC, their apparent effects on the real estate market were what sellers and renters were hoping for.
The relatively mass availability of vaccinations seemed to provide a sense of stability to the real estate market in NYC; renters and sellers appear to now be able to gauge price and demand more easily. Additionally, according to Realtors, both average prices for rentals and sales in NYC have continued to rise these first five months of 2021, as the COVID-19 vaccinations became more and more available. In almost all prestigious NYC locations, studio apartments are now consistently renting for over $2500 per month and 1-bedroom apartments are averaging close to $3500 per month. These are more like the numbers we witnessed prior to the COVID-19 pandemics and prior to the moratoriums issued by the State of New York and City of Manhattan, which undoubtedly temporarily created downward pricing in the NYC real estate rental market.
Other housing statistics from Realtors offer the same conclusion: the stability of real estate prices in NYC have certainly increased by an upward trajectory. Steven James, President and CEO of Douglas Elliman, said there will be an immediate increase in activity once the vaccine is approved. He hinted that the best “opportunity is now” for prospective real estate investors because prices will only continue to increase proportionate to the amount of New Yorkers and Americans who get fully vaccinated. George Ratiu, a senior economist at Realtors, echoed Steven’s point by predicting “a gradual shift over the next six to eight months” in rising real estate prices in NYC. -
Did the Economic Slowdown (as a Result of COVID-19) Actually Impact CRE Positively?
Succinctly, of course not. However, one may argue that the COVID-19 pandemic did create an opportunity for the CRE (Commercial Real Estate) market to generate innovative opportunities for at least this coming year. Some of the opportunities are lessons carried from 2020, when we saw CRE begin to show signs of gradual recovery before returning [Forbes Real Estate Council]. John D’Angelo, Deloitte Consulting’s U.S. Real Estate Leader agreed that at least a few emerging CRE trends will contribute to a recovery in 2021.
Firstly, global CRE Corporations are researching how to attack the following:
• Continuously evolving behavioral trends post COVID-19
• Establishing more secure building spaces
• Optimal efficiency
• Improving in recognizing challenges, vulnerabilities, and risks at the early portfolio level
CRE Corporations especially should be working extra hard to familiarize themselves with the results of this research as these are important trends that will likely impact the CRE market as a whole. Those who understand these trends will be able to provide their clients a better experience with access to this knowledge and, therefore, result in steady sales.
Secondly (and in fact surprisingly), due to the pandemic, lockdowns have led more companies to have their employees working from home. While it may seem like there would be no use for office space in 2021, there are actually several opportunities in the CRE market for commercial offices that were not there before. Vacancies in high-traffic areas make this the perfect time for commercial owners who are looking to expand.
While many businesses are still waiting to bring their employees back to the office, there are undoubtedly several good reasons for having an office in a post-COVID environment. In an office, employees have more space to work collaboratively, increasing cooperation and efficiency. CRE owners and investors would be wise to acknowledge the fact that even during the pandemic, there are still business owners out there looking for affordable office space and certainly have this in mind as they make their investment decisions this year.
Finally, when it comes to e-commerce, an already growing sector prior to 2020, boomed during the pandemic [Forbes Real Estate Council]. In response, retail stores and third-party logistics businesses are not only growing or optimizing their fulfillment center footprints, but many of them are also switching from a “just-in-time” inventory model, to a “just-in-case” approach as they aim to prevent the shortages of goods encountered throughout 2020. As this trend continues, many online shops nationwide will need to lease a warehouse for their growing businesses. This will certainly lead to a steady increase in leasing opportunities in the CRE market that both owners and investors should take advantage of. -
Did the Economic Slowdown (as a Result of COVID-19) Actually Impact CRE Positively?
Succinctly, of course not. However, one may argue that the COVID-19 pandemic did create an opportunity for the CRE (Commercial Real Estate) market to generate innovative opportunities for at least this coming year. Some of the opportunities are lessons carried from 2020, when we saw CRE begin to show signs of gradual recovery before returning [Forbes Real Estate Council]. John D’Angelo, Deloitte Consulting’s U.S. Real Estate Leader agreed that at least a few emerging CRE trends will contribute to a recovery in 2021.
Firstly, global CRE Corporations are researching how to attack the following:
• Continuously evolving behavioral trends post COVID-19
• Establishing more secure building spaces
• Optimal efficiency
• Improving in recognizing challenges, vulnerabilities, and risks at the early portfolio level
CRE Corporations especially should be working extra hard to familiarize themselves with the results of this research as these are important trends that will likely impact the CRE market as a whole. Those who understand these trends will be able to provide their clients a better experience with access to this knowledge and, therefore, result in steady sales.
Secondly (and in fact surprisingly), due to the pandemic, lockdowns have led more companies to have their employees working from home. While it may seem like there would be no use for office space in 2021, there are actually several opportunities in the CRE market for commercial offices that were not there before. Vacancies in high-traffic areas make this the perfect time for commercial owners who are looking to expand.
While many businesses are still waiting to bring their employees back to the office, there are undoubtedly several good reasons for having an office in a post-COVID environment. In an office, employees have more space to work collaboratively, increasing cooperation and efficiency. CRE owners and investors would be wise to acknowledge the fact that even during the pandemic, there are still business owners out there looking for affordable office space and certainly have this in mind as they make their investment decisions this year.
Finally, when it comes to e-commerce, an already growing sector prior to 2020, boomed during the pandemic [Forbes Real Estate Council]. In response, retail stores and third-party logistics businesses are not only growing or optimizing their fulfillment center footprints, but many of them are also switching from a “just-in-time” inventory model, to a “just-in-case” approach as they aim to prevent the shortages of goods encountered throughout 2020. As this trend continues, many online shops nationwide will need to lease a warehouse for their growing businesses. This will certainly lead to a steady increase in leasing opportunities in the CRE market that both owners and investors should take advantage of.