Fewer listings, fewer sales, higher rents: NYC real estate market gets pummeled by pandemic

Homes and apartment buildings in Elmhurst, Queens, one of the neighborhoods hardest hit by the COVID-19 pandemic. (Photo via Getty Images)

Amid the economic turmoil that the COVID-19 pandemic has wrought on New York City, the real estate market continues to take a beating.

Though there were some signs of stability, PropertyShark reported Tuesday, real estate sales in the five boroughs are down 53% in May year-over-year. That followed up a 61% plunge in year-over-year real estate sales in April.

Even so, there didn’t appear that many homes up for sale across the city. In a report released early Wednesday morning, StreetEasy found that just 717 homes across New York City came on the real estate market — an 86% decrease from the 5,095 listings added in April 2019.

“Most New Yorkers who don’t absolutely need to buy or sell right now simply aren’t doing so,” said StreetEasy Economist Nancy Wu. “The massive drop in inventory shows us that the majority of would-be sellers can wait, and are opting to do so to avoid any pressure to make price cuts.”

Driven sellers, however, weren’t afraid to lower their prices in April. The Manhattan price index that StreetEasy monitors fell 2.7%, to $1,075,336. Brooklyn’s price index was down 1.8% to $689,989, while the price index for Queens remained relatively flat at $510,345.

Those homeowners determined to make a sale amid the pandemic at least didn’t risk their broker’s health in doing so, resorting to video tours to entice potential buyers. In April, according to StreetEasy, there was a 132% increase in listings that featured a walkthrough video or a 3D Home tour from the previous month. 

The PropertyShark report offered a few bright spots. The first half of May saw “noticeably stronger sales trends” than in April, with 737 deals registered. It appeared to be a sign of “a gradual return for transactional activity.” 

The median sales price in May also stabilized at $700,000, which marked a 2% gain over the May 2019 median price. Even though pricing trends have been “firmly positive throughout the crisis,” PropertyShark’s report noted that the 2% May gain represented “the smallest year-over-year price growth” in 2020.

But by the third week of May, PropertyShark stated, it seemed the real estate market began to slow again, as just 324 sales were registered that week — the slowest 7-day period since mid-April.

Yet even as the sales market seemingly dries up, and the economy in overall turmoil, StreetEasy found that rents appeared to increase across the city during April. 

StreetEasy’s Manhattan Rent Index rose 2.5% year-over-year, to $3,308 in April 2020. The Brooklyn Rent Index rose 4.8% to $2,755, while the Queens Rent Index went up 3.2% to $2,209. The indices track monthly changes in rent for all housing types in the three boroughs.

The report cautioned, however, that upheaval amid the pandemic may have caused actual rent price growth to slow. 

Some might see higher rents during the pandemic as a tragic irony given the ongoing push to forgive or cancel rents altogether for struggling New Yorkers during the pandemic.

At the start of the crisis, Governor Andrew Cuomo ordered a moratorium on evictions and foreclosures to keep residents in their homes. Critics charge that’s not enough to spare low-income and/or unemployed New York residents from hardship and their housing costs.

More from around NYC