As residents continue to leave the high-density urban areas such as New York City for areas less populated and with lower rates of virus infections, they’re finding places such as the suburbs of New Jersey and upper New York.
National figures have been slow to reflect this migration but a recent report published by Redfin discovered that 46% of homes in adjacent regions were sold within the first two weeks that they were on the market for the week ending August 2nd. This is the fastest level recorded since 2012.
On a comparative basis, June 2019 reported, only 32% of homes were in contract within 2 weeks.
In addition, Redfin reported that sellers are receiving 99% of the list price. For the period studied, homes were on the market for 49 days, which is the lowest number on record.
In New Jersey, that trend is not what was reported for the last period in June, were homes we’re staying on the market longer than they had been in 2019. But statewide in New Jersey, the months supply of inventory has collapsed from 6.2-months supply to 3.4-month supply, a 45% drop.
New York Turning into No York
This is no blip on the screen; people have left and are leaving the Big Apple in significant numbers and we don’t know when they’re coming back.
What was reported to be 10,000 vacant apartments in Manhattan has increased by 30% to over 13,000 vacant apartments, according to Douglas Elliman.
Compounded by the number of vacancies is the drop in the number of new leases signed, which fell by 23%.
It’s not only the shortage of potential renters but also the drop in rents being charged in the city – which, according to some reports, have fallen by 10%, and now landlords are now offering an average of nearly two months of free rent to attract potential tenants. This would never have seemed possible a year ago.
The pandemic has produced a great deal of trepidation, especially within those rentals with families. Parents are very concerned about allowing their children to return to the classroom.
This clearly is not going to end in the fall; New York City’s prime real estate strip, the Upper East Side, fell the most, with a drop in the number of new leases signed by 39%.
There is clearly a concern that the small landlords who own many of these rentals may find it difficult to pay New York City’s property taxes, which represents a large percentage of the city’s total revenue pie.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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