brown and white concrete buildingAnother concern is that the real estate industry in general is expecting to face some hard times. New York City will depend on the revenues generated from its real estate values, which in prior years had generated approximately $30 billion in 2019. This number for a percentage of the pie translated into 53% of New York City’s tax revenue. In addition, the real estate industry also employed 275,000 individuals.

The economic context of New York City unemployment stands at 14%, which is a long way from the 20% that had been reported back in June and July. It’s still there are major disparities from 2019 and 2020. New York’s hotel occupancy rate is currently just 39%, which is down from the 95% it had reported the same time last year.

There is deep concern that up to one-third of the city’s quarter of a million small businesses may never reopen. As a result this is going to have an impact not only upon the residential real estate market but also the commercial real estate market.

Residential retail sales fell 40% in July from 2019 and fell 57% in August from 2019. Commercial sales did not suffer as severely, coming in at down 28% in July and down 43% in August on a comparative basis with 2019.

Still, recent sale prices are expected to continue to fall well into next year as government and health agencies deal with the health pandemic that has so impacted the city’s economy.

In comparison, when put against the Great Recession of 2008, rents prices fell only 10% in Manhattan, and this was due to the loss of jobs and increase in vacancies.

The median rental price for a Manhattan apartment was just above $3,000 a month in September. This represents an 11% drop from the same period in 2019, but we have yet to see the full effects of the pandemic upon businesses and those they employ.

A large number of the developers who built high-end condos in the city are waiting to see if the other shoe will drop. Of the 20,000 condo units across the city that have come to market since 2018, approximately 60% are unsold, creating some concern for those within the industry. This translated into approximately $33 billion in unsold apartments.

Clearly there is an overabundance of high-end inventory, but still there are no fire sales on these apartments.

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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