© Provided by Business Insider Alexander Spatari/Getty Images
The Delta variant is no match for New York City real estate, which is hotter than ever after a pandemic slump.
In January, both rents and sales in NYC plunged, according to a report from StreetEasy: rents in Manhattan, Brooklyn, and Queens all had their largest year-over-year declines on record, while median home prices fell at the fastest annual rate on record.
It was just the latest of many predictions that New York City was fated to fall from the pack of global supercities and lose the self-proclaimed status of greatest city in the world. But the prospect of New York City with (relatively) cheap real estate became irresistible.
Almost every piece of housing market data from the last couple months is making it clear that NYC real estate had a hot vax summer, even if the Delta variant’s onset in August diminished that feeling in the wider economy.
The rare window of opportunity in one of the world’s most expensive housing markets allowed many residents who fled the city when the pandemic first hit to return and take advantage of a more affordable market. They were able to upgrade to luxury apartment rentals and buy homes below asking price.
An economic reopening during May, followed by the return of workers as some offices announced reopening plans over the summer, further helped real estate rebound.
Buying a home in NYC is as expensive as ever again
Video: Here’s a first look at new Plaza Midwood development (WCNC-TV Charlotte)
Here’s a first look at new Plaza Midwood development
Click to expand
Properties in Brooklyn began to bounce back first, followed by Manhattan’s comeback. As Insider’s Natasha-Solo Lyons reported, the “COVID discount” was over as brokers anticipated a busy market through the summer.
They were right. While the highly contagious Delta variant could have threatened the city’s real-estate revival, by the end of August the market entered a cutthroat phase more intense than it was before the pandemic for both sales and rentals.
In the second quarter of 2021, the median sales price of condos and co-ops had risen to its highest level in eight quarters – to $1.65 million and $820,000, respectively, according to a sales report from brokerage Douglas Elliman and real-estate appraiser Miller Samuel.
“Since April, I don’t think we’ve ever done this many transactions in such a tight period of time,” Jeff Adler, a broker with Douglas Elliman, told The Financial Times.
Renters are feeling the pain, too
On the rental scene, landlords are “trying to make up for time and money lost during the pandemic’s lull by raising prices and erasing discounts,” Nancy Wu, a StreetEasy economist, told Insider’s Taylor Borden. StreetEasy said it saw activity exceed pre-pandemic levels in July. Compared with July 2019, the platform saw 59% more visitors, 63% more rental-listing views, and 76% more inquiries on rental listings.
New leases in Manhattan were up 54.7% in July compared with July 2020, according to separate Douglas Elliman and Miller Samuel report. There were more new leases signed in July than in any other July since at least 2008.
But it’s not just the influx of urban dwellers re-staking their claim in the city after an economic lull. A competitive housing market marked by soaring prices has priced some aspiring homeowners out of buying, leaving them no choice but to rent and add to the demand. When homes are more expensive, renting becomes more expensive.
While this may not be good news for anyone looking to land their dream NYC pad, it is good news for the city’s economy. Formerly the epicenter of the coronavirus during the spring, NYC was hit hard last year as its wealthiest residents fled and local businesses shuttered their doors temporarily and permanently.
The Delta variant may have delayed the resumption of Manhattan office life, but real estate is pointing toward the inescapable conclusion that New York is roaring back.