REAL ESTATE AND JOB TRENDS ALL SEEM TO SAY SO
Lately many gurus are predicting a slow demise of the most popular and celebrated capital of the world, New York City. Though it’s not the first time that the Cassandras come out in droves to proffer such premonition, this time there seems to be an unanimous consensus about the dire condition of our patient.
Things weren’t looking good even before the Pandemic, but now they are extremely severe.
Just to name a few:
- New York is one of the cities that have suffered the most because of the pandemic in terms of death toll.
- Real estate prices were sky high.
- Taxes are among the highest in the country.
- People were moving out of NY towards less expensive alternatives (South of Florida, Nashville, Dallas, Austin).
Now, because of the Pandemic, things have gotten worse. Unemployment has skyrocketed, people unable to afford the high cost of living are moving away in droves (many of them are moving to our beloved Cleveland), many employees have found out they can as easily work from home, high earning individuals are moving towards greener pastures as mentioned above (again, lots of big money is looking at Cleveland to invest in real estate but also in other sectors).
The hemorrhage of people, jobs and businesses has started to affect the real estate sector. We have already witnessed a 50% decrease in prices of new constructions and this just seems to be the beginning.
Next is likely the crisis will hit the price of office space and commercial real estate. Later on it will be the turn of residential RE.
Just to give an idea, 7/800 sqf in Manhattan can easily go for 5 grand a month not considering utilities and HOA, whereas in Cleveland, as you can see on our site or even on Craiglist and Zillow, you can find something nice for a tenth of that ($500). So, there is obviously a lot of room for the prices in NY to go down.
And not just in the real estate market. The general cost of living in our city is 60% lower than that of New York City, you can see why people decide to move.
What do you think? Is New York terminal or it’s just another temporary crisis and in 6/12 months everything will be right back at business as usual?