As reported in our mid-October blog, the third quarter was record breaking.
Some interesting things are happening. First, the percentage of foreign buyers has dropped significantly from 28% of new development buyers pre-pandemic to 11% as of 3rd quarter 2021. So what is driving all of this buying activity?
Let’s take a look at the following chart, from a large national moving company:
New York City is showing over 50% more people moving in than leaving; the only major city surveyed with positive numbers. Why here in NYC?
It’s all about employment!
While substantial numbers of New Yorkers fled the city, a substantial portion of that was temporary. And many of those who bought primary residences outside the city are going to regret predicting that 100% work from home was going to be a thing (it isn’t). It’s nice to move to Connecticut or Pennsylvania permanently, but if the office requires three days a week in the office, that commute is going to start looking pretty long. And people did just that, of course:
You will see the maximum home value increase looks to be over two hours away from the city.
Employers hate work-from-home, especially financial firms.
The Wall Street Journal reports “Manhattan employers projected that 62% of their workers would be in the office by September, according to a survey released in June by the Partnership for New York City… The rise in office occupancy has been particularly pronounced in New York, where usage increased to a pandemic high of 30% during the week ended Friday, up from 21% at the beginning of September”
And while Google and Wells Fargo are not requiring workers to be back in seats until early 2022, that is right around the corner. Plus, if Google really thought work from home was going to be an ongoing condition, would they really have just dropped $2.1 billion on a giant office building in Manhattan?
And let’s not forget the City’s largest employer (the government) has mandated a return to work and a vaccine mandate for all employees.
Here’s the punchline, a theme we’ve been harping on for over a year under a steady drumbeat of dire headlines:
New York City is the center of employment for nearly every important service industry: finance, technology, consulting, law, fashion, publishing, accountancy, education, etc. etc. etc.
And New York City, while hit hard early in the pandemic, is doing the best of major cities in its transition to Covid-19 being endemic (like the flu).
“New York and New Jersey are going to be in the U.S. where I would look first for the transition to endemicity,” or the point when the virus is still circulating in the background but the disease is more manageable, said Andrew Noymer, a public health associate professor and, infectious-disease epidemiologist at the University of California, Irvine.
In other words, we are returning to normal faster than you think. And when people’s salaries are on the line, they vote with their feet… right back to New York City!