NYC Real Estate Market Crash , Retail Rents Plummet, Shopping Districts Turn into Ghost Towns.
News has been out for months. New York and other megacities like London, Dubai, Singapore, etc. are emptying up. They were too expensive to survive in, but once the pandemic hit, many more started leaving due to job losses and lack of incomes. As a double whammy, almost no one is coming in.
And no Giuliani is coming to the rescue this time.
This crime and anarchy driving people out of town are what happened in New York City, the 1970s and ’80s.
This time it is different. New York is a centralized concept; its entire reason for thriving is the need to be near the beating heart of money. But in the Zoom era, location means zip. The city as a target-like concentric fortress of location as capital and coolness is going the way of the dodo.
New York City commercial real estate deals have hit a brick wall as the pandemic continues to roil the local economy.
According to the Real Estate Board of New York, investment sales dropped by a 32% drop in transaction volume and a 54% plunge in total consideration compared to the first half of 2019, and a record low since the Real Estate Board of New York began reporting the data.
Apartment buildings suffered the biggest drops in prices, at 50% on average. Offices and hotels saw decreases of 28% and 37%, respectively, while prices for retail properties were flat.
Next, most properties have mortgages, and many cannot take great hits to the price – without having all the equity wiped out. These buildings are heading towards foreclosure. Foreclosure for larger pieces of real estate is very different than losing your home. The lender has the right to appoint a receiver and essentially take control of the asset. The borrower loses his financial right to the building fairly quickly.
We were top of the market in pricing before COVID hit. And New York was top pricing in the United States, along with the Bay Area. Really expensive real estate, even in the boroughs.
COVID will perhaps have a permanent mark on New York, combined with very ineffectual leadership, the city is in steep decline.
Cuomo and DiBlasio have stuck the knife so deep into New York it may never recover. Demographics mean the next mayor will be worse than DiBlasio, as hard as that is to believe. Detroit is going to look like a paradise compared to New York if something doesn’t change soon. Maybe we could sell it to the Chinese or the Saudis and at least get some law and order?
Why does anyone want to live in the largest concrete jungle in the world, where everything is closed, and there’s nothing to do. And the risk of turning a corner only to encounter a violent mob, with no police presence to protect you.
Once out of that dump, people will not go back.
You can buy a crap ton of land up in Montana and live nearly dirt cheap with your own runway!