Wednesday, August 19, 2020

New York City: The State of Play

Hot off the wires, here is some information about the current exodus out of New York State. We note, as some commenters remarked yesterday, that many people from many states around the country would prefer that New Yorkers stay where they are.

The New York Times reports on the apartment rental crisis. More apartments are now vacant. More landlords are decreasing the rent. 

Here is the Times data:

There were more than 67,300 units available in July across the city, according to StreetEasy, the most apartments available in any month since the listing site started tracking rental inventory in 2010.

In June and July combined, more than 120,000 apartments were for lease, a nearly 26 percent increase over the same months in 2019.

The surge in supply has driven down rental costs across the city and forced landlords to offer generous concessions, including up to three months’ free rent and paying the expensive fees brokers command.

The spike in available units has been most stark in Manhattan, where office towers are mostly empty, residents with second homes have largely not returned, and many retail stores are closed or have gone out of business.

The median rental price there in July was $3,167, a 10 percent drop from July 2019, though New York still has some of the highest rental rates in the world.

The vacancy rate in Manhattan climbed to 4.3 percent in July, the highest percentage in at least 14 years and surpassing past records set in June and May, according to Jonathan J. Miller, the president of Miller Samuel Real Estate Appraisers & Consultants.

As for commercial real estate, the Wall Street Journal takes a look at the situation at the iconic tower called the Empire State Building. Over on 34th Street things are not looking so good.

The Empire State Building, New York’s most famous office skyscraper, has come to reflect much of what ails the city and its commercial real estate during the Covid-19 pandemic.

The iconic tower looks vulnerable to losing office tenants as more companies embrace remote work or cheaper satellite offices outside city centers. Some in the industry say it is worse off than many peers because the building relies on smaller office tenants, which tend to be more at risk during a downturn. Its retail tenants face challenges with many of the building’s employees not back to work. Tourism, a major source of revenue, has all but dried up.

And finally, Joshua Chaffin in the Financial Times (no link available) reports from the Connecticut suburbs. He addresses the question of whether companies will follow workers by relocating to areas outside of the city.

Whereas the city was previously a highly desirable place to work and to live, such is no longer the case.

But coronavirus has, almost overnight, thrown this dynamic into question by rendering some of these cities’ great attributes — their density and cultural offerings — unappealing or off limits. That is prompting an exodus to suburbs that had wilted in their shadows.

Real estate brokers in Connecticut are seeing their business expand exponentially:

“It’s unlike anything I’ve seen and I’ve been doing this for 20 years,” says Carolyn Fugere, a Sotheby’s broker in Stamford. In July, the number of single-family homes under contract in the wider Fairfield County rose 63 per cent compared to the previous year. The value of those contracts was up 104 per cent. Reports of rising crime in a fraying New York City, Ms Fugere adds, are prompting young families to “accelerate life decisions”.

How many families are leaving New York?

On the other side of the ledger, Real-Page, a property analytics company, recorded a net loss of 6,786 households in the New York metro area in the second quarter. It had gained 3,730 in the same period a year earlier. (Los Angeles lost 6,347). The flight has been so dramatic that Governor Andrew Cuomo recently pleaded for New Yorkers to come home.

“We’ve already picked up data that it’s happening,” says Jacques Gordon, global strategist for LaSalle Investment Management, noting that the property firm was seeing similar shifts outside London and Paris. “The bigger question”, Mr Gordon asks, “is whether it’s permanent or temporary”.

For my part, I am guessing that it's permanent. So said James Altucher the other day, and I suspect, with him, that the declining quality of life, the increased incidence of crime, the degraded school system, has persuaded people to pick up and leave.

Optimists will claim that a new mayor will set the city right. But then again, the people who vote for AOC are not likely, in the long run, to vote for a mayor capable of setting the city right.


Giordano Bruno said...

The great migration is well underway. The populations are going to relocate so we can better prepare for two separate nations, under one government, that hate one another. Cities filled with leftist lunatics and bums, and the rest of us settled into the outlying areas trying to stay away from the Morlocks.

The greatest red pill of the all? Being poor and having to live with certain demographics because your job/income requires it and you don't earn enough to move into a better part of town. That certainly describes my journey in several dangerous parts of several cities. I have it on good authority that Vietnamese, Koreans and Chinese are saying the same thing in their local languages behind bulletproof glass.

Now that demographic part of town has moved into the other parts of town and the elite class that proclaims their undying love and admiration of certain demographics, but works especially hard to remove themselves and their kids from those demographics, is considering the suburbs post haste. Maybe they should call this "the great hypocrite migration."

urbane legend said...

The Great Hypocrite Migration.

I like that, GB.

If we are paying attention, we have learned two things: how worthless democrat politicans are when leadership is required, and how little NYC meant in the grand scheme of things.

370H55V said...

"Optimists will claim that a new mayor will set the city right. But then again, the people who vote for AOC are not likely, in the long run, to vote for a mayor capable of setting the city right."

Agree completely. Who's the new mayor gonna be coming out of a city GOP that is almost non-existent? The unpleasant reality is that being "woke" is a hardcore religion with these people and they would rather die than not be perceived as "anti-racist". And unfortunately they take their pernicious ideas with them to their new locations and ruin it for the rest of us.

Let us face reality: This is a leftwing country now, and all the election readings point that way. The entire Squad won their primaries (a couple of which were hotly contested), Kim Gardner won her primary for DA in St. Louis overwhelmingly, and the mayor of Portland is challenged from the LEFT by an outright antifa supporter with a good chance of winning.

And if that weren't bad enough, their victories extend to corners formerly considered hidebound reactionary. Upright Mormon Salt Lake City hasn't had a Republican mayor since the 70s. Dallas County TX elected a Soros-clone prosecutor. And North Carolina chose as its governor the AG who not only refused to defend the state's transsexual bathroom law, but actually filed a brief in opposition to it.

Can anyone reading this really believe that Frank Rizzo could get elected mayor of Philadelphia today? Or even Rudy Giuliani in New York?

The Left has gotten everything they wanted through violence, threats, and intimidation. Now they have the electorate behind them. As someone once said, people vote socialism in but have to shoot their way out.

Giordano Bruno said...

Asshole, I agree with every word. The old republic is about to die and we are here to witness it expire. Pay attention, there is everything to be learned right now. What you see here can be extrapolated to answer most of the riddles of the past. These events show us what really happened in our rearview mirror. History is about to rhyme.

Anonymous said...

Another thing that makes migration to smaller centers desirable is that with internet, you don't have to miss out on cultural content and interactions. The appeal of big cities was that with all the people rubbing together, there were opportunities to meet other for advancement and sex. Young people like big cities because of the opportunities to flirt and hook up.

Now, going to a small center you can have more safety and scrutiny of your neighbors. You have full access to information and cultural content. Less hassles and aggravation. You can also hook up on internet just as well.