NEW YORK CITY – Nissim Fadida, President of New York City-based Moishe’s Moving Systems, recently shared noteworthy insights on the ways COVID-19 impacted New York’s real estate industry from the moving services industry.
From his comments made in September of 2021, Fadida said that with New York being one of the first COVID-19 epicenters in the U.S., its various industries all suffered a huge blow, including the real estate sector. During the onset of the pandemic, commercial buildings across Manhattan were abruptly shut down and New Yorkers moved out of the city in droves.
Fadida pointed out that New York had the highest share of outbound moves among all other states. People were packing their bags and moving to suburbs and smaller cities. Consequently, home sales in NYC dropped and the demand for housing shifted to the suburbs.
Rentals in the city’s most expensive neighborhoods also declined during the pandemic. Fadida said that as people fled the city and potential transplants stayed away, the rental market faced extreme vacancy rates.
Fadida said there were many factors contributing to this challenge.
“All kinds of restrictions during the pandemic have made it very hard to impossible to show apartments in person,” Fadida said. “This has led to units remaining on the market a lot longer than usual. This has also led to price reductions by as much as 30 percent and many additional concessions from landlords, such as three months free on a 24-month lease.”
The Big Apple lost much of its knack of charming residents when its big-city amenities shut down. However, health and safety regulations posed further challenges that made it even more difficult for landlords to fill apartments. These restrictions have also contributed to the steep decline in contract signings.
“Most showings had to be done virtually,” Fadida added, “and virtual showings don’t attract buyers the same way as the showings in person. In addition, property managers and attorneys had to work remotely, which delayed the purchase-approval process — double the time than usual. The longer the process, the better the chance that the deal will fall through.”
Additionally, the pandemic also changed the priorities of homeowners and renters. Through what he noticed during the first 3 fiscal quarters of 2021, Fadida said that, with families performing daily functions from their own homes, people now recognize the value of having enough space for all of their activities. They need a place for the kids to play and home offices for those working remotely.
Fadida also said the city is opening up again and the pandemic exodus is slowly reversing. People are returning to New York as vaccines continue to rise and restrictions lift one after another. With Broadway opening its doors to the public in September and businesses resuming their on-site operations, this is attracting people to come back to the city as well.
Fadida also noticed that it’s not just homebuyers who are taking advantage of the abundant inventory that’s accumulated during the pandemic.
Renters who previously fled from the city are returning as well, driving the vacancy rate in NYC from 5.1 percent in August 2020 to 3.23 percent in August 2021. With prices still down from the COVID-19 impact, people are grabbing the opportunity to regain or jump into big-city living.
While these are indications that New York is getting back up on its feet, Fadida pointed out that real estate demands have drastically changed. Those who are moving back now think about living space differently.
People decide where they want to live not based on their commuting time to work — this time around, more people are migrating based on their personal needs and lifestyle preferences. They also recognize the value of having bigger apartments and outdoor spaces when viewing real estate properties, in case the need to stay home arises again.
Fadida concluded that COVID-19 has truly changed the way people live, work and play. It’s highly likely that they will no longer work, meet, shop and socialize with others like they used to. Although New York’s real estate market is showing signs of revitalization, the industry must recognize these trends and respond accordingly to stay attractive to homeowners and renters.
About Moishe’s Moving Systems:
Moishe’s Moving Systems is a moving services company specializing in local and long-distance residential and commercial moving, as well as self-storage. With its headquarters in New York City, Moishe’s Moving Systems has been successfully serving the NYC, Long Island and New Jersey areas since 1983.