Will New York Real Estate Recover? issue brief
Urban PolicyHousingNYC
Introduction
New York City is well on its way toward reopening. The city has weathered the storm better than some critics had feared, and even the fiscal situation of the city has held up surprisingly well. However, the pandemic has left important challenges in its wake for the next mayor to address.
The biggest of these changes revolves around the future of remote work. In the last few decades, Gotham has reinvented itself as a finance and tech hub for educated and skilled workers. Paradoxically, their jobs are the easiest to do remotely, but they have been, in practice, performed by workers willing to pay high premiums for urban density. [1]
Though the pandemic has not fully released its grip on America, signs of an incipient boom are everywhere: in surging demand for workers, imports and, above all, houses. Residential property prices rose at an annual rate of 12% in February the fastest pace since 2006 buoyed by rising incomes, low interest rates and the belated plunge into housing markets by a crisis-battered generation of millennials. A clear preference for large but affordable suburban homes over pricey city-centre flats seems to be emerging. That covid-weary Americans might be eager for suburban life is hardly surprising. Yet the latest pursuit of leafiness and expansive floor plans contains hints of a potentially transformative shift in how Americans choose where they live.
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HOUGH THE pandemic has not fully released its grip on America, signs of an incipient boom are everywhere: in surging demand for workers, imports and, above all, houses. Residential property prices rose at an annual rate of 12% in February the fastest pace since 2006 buoyed by rising incomes, low interest rates and the belated plunge into housing markets by a crisis-battered generation of millennials. A clear preference for large but affordable suburban homes over pricey city-centre flats seems to be emerging. That covid-weary Americans might be eager for suburban life is hardly surprising. Yet the latest pursuit of leafiness and expansive floor plans contains hints of a potentially transformative shift in how Americans choose where they live.