Manhattan Price Race – E24

– Who wants to live in cramped rooms when they have to work or study from home, and when the city’s cultural and nightlife is severely limited ?, asks housing and broker expert Cash Jordan as he shows E24 to an empty room of three rooms in the popular west side. Village in Manhattan.

This rental apartment now has a monthly price of $ 3,500, 32,255 crowns at the current exchange rate. This year this corresponds to NOK 387,060.

Before the pandemic, the same apartment rented for $ 65,000 a year, Jordan says. In other words, the rental price of this apartment has almost been cut in half since the crown crisis broke out in the American city.

– Now landlords are slashing rents. In addition, they eliminate brokerage fees and offer several months of free rent to sign longer. This department has cut those costs, and those who sign here will save $ 1,916 a month, he says, holding up the calculator so E24 can see.

Hit hard

New York was the epicenter of the United States at the beginning of the corona pandemic and one of the worst affected cities with hundreds of deaths a day. Hospital capacity exploded. The same thing happened with funeral homes and funeral homes.

The economy was and continues to be very affected. The 40 million tourists who visit New York each year are absent. Several restaurants, shops and bars have closed or gone bankrupt. In August, the state had an unemployment rate of 12.5 percent, the same month that the city also doubled the number of shootings and homicides.

All of this affects the rental and housing market, says Garrett Derderian, CEO of analytics firm GS Dataservice.

– Tourism and international investment are two main engines of the economy. When they don’t exist, the housing market will continue to lag.

It says that in the third quarter of 2020, 1,163 home sales were completed. This is a 51 percent decrease compared to the same period last year.

He also notes that prices in some neighborhoods have fallen by 10 to 15 percent.

– The number of homes on the market increased 43 percent in the third quarter. Two-bedroom homes reported the biggest increase of 55 percent, he says.

It adds that the sale price increased by 12 percent (median) compared to the same period last year. He believes this is not the result of the pandemic, but rather that the new fiscal rules went into effect in the same period last year.

More tenants than owner

Back at the apartment in one of the most popular neighborhoods in Manhattan, Jordan shows us around. The condo is on the top floor and you can see parts of lower Manhattan from the bedroom window.

Jordan thinks this apartment shouldn’t have been a problem to rent. He has worked with the rental apartment since 2008, but due to the pandemic it has not been rented.

In New York, a majority of residents pay rent rather than own, and Jordan says he has never seen a price drop as long as it does now.

– We are now in October, and this has been going on since March. Initially, New Yorkers fled the city, and I heard from other colleagues working on the outskirts of the city that the influx of people has been higher there.

– Prices here vary a lot considering how attractive it is for people to live in the city. If your school is closed and if your workplace wants you to work from home, small apartments aren’t that attractive, he says.

In general, the busiest months are from May to the end of August. Now that Manhattan is in what experts call “low season,” they are not ruling out that the prices of rental apartments will continue to fall.

– The number of vacant apartments in Manhattan exceeds five percent. They are usually between 1.5 and 2.5 percent. There was a 171 percent increase in available apartments compared to the same period last year. This has put extreme pressure on prices, which now include up to four months of free rent and paid moving costs, in addition to lowering the gross rental price, Derderian says.

Despite this, you still don’t want to call the current situation a housing crisis:

– Some markets show signs of strength, especially in outer districts. However, we will probably see a change in the market when we enter in the next few months, he says.

Although Governor Andrew Cuomo has issued crisis packages, the high unemployment rate means that some tenants have struggled to pay their rent. Recently, there have been several protests in the streets of New York with demands that the authorities must intervene.

It is not uncommon for people moving to Manhattan and New York to put furniture on the street that they do not want to take away.

But when the crown was at its worst in the city, you could see on social media that the streets almost became “flea markets” because people fled the city.

Jordan finds it difficult to predict the future and believes that the market will be governed by the will of people to live in the city.

And now that it is “out of season”, there will be more apartments on the market. It is also uncertain whether the apartment in the West Village will be rented.

– We don’t know if there will be a second wave, we don’t know if New York City will be forced to close again. All of this affects people’s decision to move to the city.