Total existing-home sales—completed transactions that include single-family homes, townhomes, condominiums and co-ops—rose 3.1% from December to a seasonally adjusted annual rate of 4.00 million in January.
Amid Post-COVID and Social Unrest, Are People Still Moving into Manhattan?
Since early spring, when the coronavirus hit the New York metro area hard, headlines have been screeching about the residential flight from Manhattan and other parts of New York City.
Newspapers, online publications, blogs, and broadcast media are continuously touting the mass exodus from The Big Apple.
High-end luxury condo owners to students and young professionals sharing moderate apartments have fled the area in search of temporary or permanent housing in suburban New York or even out of state. Many also fear the recent rash of rioting and calls to defund the New York City Police Department have only added to the migration elsewhere.
However, Manhattan real estate broker Michael Shapot of Compass, believes the flight will be temporary and that buyers and renters will be coming back. “Yes, the virus did create a situation where people were stuck at home in close quarters and many did make a move to the suburbs or other parts of the country,” he said. “But, New Yorkers as a rule are a resilient bunch and I think people recognize there there’s only one New York City. Manhattan is the financial center of the country, we have the best medical and educational facilities and culturally, we’re second to none.”
Shapot and his team deal mostly with condo and co-op sales, but do handle some rentals as well. Shapot is not worried about what he calls a “knee-jerk” reaction to the recent wave of transitions from Manhattan. “In fact, a woman from France recently contacted me about finding an apartment for her daughter who wants to attend college here,” he said.
His Compass team has also experienced a lot of Manhattan residents looking to upgrade to larger apartments. “Since so many are still working from home, they’re starting to look for extra space like an office or a washer/dryer in the apartment, or some outdoor space like a terrace or patio,” he explained. “The luxury rental market is strong now and I think we’re going to see a change in people’s appetite for housing here in the city.”
Shapot said a typical one-bedroom apartment can start at about $3,500 a month, while two-bedrooms can rent for up to $5,000 a month. On average, one-bedroom co-ops can start at around $600,000, as compared to one-bedroom condos, at about $900.000.
“Very often young people just starting out will share a one-bedroom apartment,” he added. While some college students have temporarily moved back in with their parents in the suburbs, Shapot is confident they will eventually come back to Manhattan.
Landlords, he said, are also more willing to negotiate because they don’t want to have any property sitting empty. “Rental prices are down about 10% to 15% now, and often landlords will throw in a free month or some other incentive,” he said. “I think sellers are also a lot more flexible now.”
Tony D’Anzica, broker-owner of Dynamax Realty in Manhattan, has not had quite the same experience as Shapot. Also, a property manager, D’Anzica has had many tenants who temporarily fled Manhattan, and several of them have not yet returned.
“In fact, I had a tenant who postponed moving into an apartment I rented to him several months ago, and recently he just informed me that he is not coming to back to the city at all,” he said. “Now the owner of that condo unit wants to sell it instead of renting it out again.”
Another potential tenant was a Facebook employee being transferred to Manhattan. That deal also went south when Facebook announced it was allowing all employees to work from home. “Now that apartment is still sitting empty and the landlord is not getting any rent,” added D’Anzica. Still another tenant rented a one-bedroom Chelsea apartment for $4,500 a month and left in mid-March. While he’s still paying rent, D’Anzica believes he will probably try to get out of his lease.
A small Morningside Heights luxury building he manages has a total of six apartments—with four of them vacant. “People don’t like being in such close quarters and they’re also nervous about getting into the elevator with others,” he said.
D’Anzica also worries about the city’s post-rioting climate and calls to defund the New York City Police Department. Published reports indicate 64 people were shot in the city over the Fourth of July weekend, leaving 10 dead. New York City also surpassed 400 shootings in the first half of the year for the first time since 2016. In the meantime, headlines continue to blame New York’s Bail Reform program for putting dangerous criminals back on the streets.
One of the buildings D’Anzica manages in northern Manhattan was experiencing continuous theft of packages. “The person suspected of stealing was arrested three times and let out on bail each time, until finally he was caught in the act,” explained D’Anzica. “The homeless problem is also getting out of hand. There are people camping out in front of one of our buildings, and using the area as a bathroom!”
As a result, building owners are now forced to invest more in security measures such as gates and cameras. “Calls to defund the police are making things worse and I don’t see as many cops as before. Tenants are afraid and politicians are not reacting,” he added.
Manhattan Borough President Gale Brewer wants to reassure real estate brokers that the New York City Police Department is not going anywhere. “People want police protection and those who are calling for defunding the police are not living in New York,” she said. “I would never call for cutting out the police—that’s insane!”
Brewer recently met with the tenant leaders of the New York City Housing Authority to discuss police protection. “They want cops, good cops,” she added. “We need police to get to know neighborhoods again—the shopkeepers and the people who live there. When you work with the local community, you do very well.”
Brewer is also working with the New York City Mayor’s office to plan who will handle the homeless situation, which in many cases overwhelms the police department. “Yes, there are too many homeless out there on the streets and we have to determine who will be taking care of those quality of life issues,” she said.
Acknowledging that the city’s recent rash of rioting and destruction of property was “terrible,” Brewer said she is working with local Business Improvement Districts to help them get up and running again. “This was very hard on local businesses and presented a very negative image of New York.”
Despite the virus and recent rise in crime, Brewer believes Manhattan property values are still the greatest investment anyone can make. “Where else do you have Broadway, Lincoln Center, the Metropolitan Symphony and Opera, Greenwich Village, Soho, the best museums and the best food in the world,” she said. “I’ve been here 60 years and I think people will always want to the opportunity to live in Manhattan.”
In an effort to recover from all of the recent statue and monument vandalism, New York City will dedicate the first Women’s Suffrage Statue on the mall at Central Park on August 26.
“From all that’s happened recently, I know people’s fears are real, and my office is working hard to address this,” Brewer added. “I would also suggest that new residents here get involved with their local community boards, so they can help to make a difference in their neighborhoods.”
D’Anzica, however, remains concerned. “I’m really nervous about the future, and I don’t see the city coming out of this any time soon and being where it was,” he admitted. “I still think New York is the greatest city in the world and I’ve always loved it. I’m generally an optimistic person, so I do hope that it will someday bounce back.”
“I know there has been a spike in crime, but we haven’t been experiencing a lot of fear and anxiety with our clients,” said Shapot. “My crystal ball is a little cloudy now and it’s a “big unknown” for the fall, but I always believe that the glass is half full and we’ll have a strong market going into next year.”