In his recent State of the City address, Mayor de Blasio set a goal of having 5 million New Yorkers vaccinated by June. It's a pace that will drive a broad recovery and allow for the beginnings of a return to the office for those employees currently working from home.
But the extent of crisis-induced structural changes remains uncertain, a fact that will slow investment decisions at a time when business creation and expansion is sorely needed. One key consideration will be changes to the region's workforce as a result of pandemic-related migration.
To help you understand those changes, we've devoted this issue to Covid-19's impact on the region's housing market. Using data provided by Zillow, we've looked at home listings and sales to explore trends prior to and since the pandemic. Here's what we know:
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Data Spotlight:
NYC Metro Residential Sales Trends
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In 2020, more supply and softer demand led to an unusual (and potentially temporary) reprieve in pressure on NYC's for-sale housing market. Conversely, Covid-19 has exacerbated pressure on the housing market in the surrounding suburbs, further threatening the affordability of the NYC Metro region.
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While NYC's inventory has increased moderately since 2019, a more significant trend has been the decreasing availability of inventory in the surrounding suburbs.
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Since January 2019, NYC has experienced a slight uptick in for-sale inventory. The rest of the NYC Metro, more prone to seasonal fluctuations, saw an overall decrease in inventory compared to pre-Covid-19 levels. In December 2020, the NYC Metro's inventory was the lowest of any month in the past two years.
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Government-ordered business restrictions caused inventory to dip significantly across the NYC Metro in the spring of 2020. With the easing of restrictions in June, inventory grew in the NYC Metro suburbs but still fell below pre-pandemic levels by the end of the year. NYC's inventory was up before Covid-19, and even more so through the fall, but leveled off by December.
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Despite a late-year acceleration, there were fewer homes sold in 2020 in most areas of the NYC Metro.
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Total home sales were down across the NYC Metro in 2020, except in Connecticut, where sales were up compared to 2019. The decline of home sales was most pronounced in NYC, but residential sales make up a smaller portion of overall real estate activity in the city than in the NYC Metro suburbs.
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In the six months prior to Covid-19, home sales trends were consistent across the NYC Metro. Restrictions on business activity affected sales region-wide in the spring and early summer, then accelerated through the end of the year. In NYC, however, sales remained below 2019 levels by the end of 2020. In the suburbs, the late-year acceleration was not enough to compensate for declines in March through August, except in southwest Connecticut, which rebounded the fastest and grew sales the most.
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The confluence of depressed inventory, increasing demand, and higher prices points to a troubling direction for housing availability and affordability.
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As documented in our 2019 report, The Geography of Jobs: Second Edition, the NYC Metro was building less new housing in the decade after the 2008 recession than in the years prior, most notably the suburbs. Even before Covid-19, there was a mismatch between housing and job growth that exerted pressure on the NYC Metro's housing availability and affordability. In the face of the pandemic, that mismatch is heightened and the suburbs have fallen further behind in their efforts to support the region's housing needs.
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Data for this research brief were prepared by Zillow Group, Inc and provided to DCP for analysis. It is important to note that this report does not capture rental activity of the effects of temporary relocations. It provides a snapshot of the effects of Covid-19 on the NYC Metro's for-sale housing market and is representative solely of the inventory posted on Zillow. It therefore does not represent all housing inventory available for sale or reflect the overall composition of the NYC Metro housing market. Sales data were only available through November 2020. For more information about the geographies covered and definitions of terms, please refer to the Appendix section of the research brief.
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Have questions or want to connect about our research?
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Planning News from the Region
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Did you know that almost half of NY State's electricity comes from fossil fuels? In New York City that share is even higher. Requirements for in-city generation and intense congestion in the state's transmission network make it especially hard to bring clean energy to the city, a reality that will only grow with the closure of Indian Point.
To meet the city's goal of powering government with 100% renewable electricity, Mayor de Blasio recently announced his commitment to secure a deal to construct a transmission line that will connect the city to Canadian hydropower and other renewable electricity sources. The connection will provide carbon-free baseload power to support additional renewables and will offset local gas plants, reducing the city's greenhouse emissions and improving air quality.
Clean energy is an important component of sound economic development policy. Job creation is another. The latter is the focus of a major piece of economic development legislation recently signed into law in New Jersey. A number of new programs seek to aid in main street recovery and the growth of urban centers such as Paterson and Atlantic City.
The New York State Senate has advanced its own major legislation, a package to combat housing discrimination across the state. The bill follows an investigation that largely affirmed the findings of a recent Newsday series which documented widespread violations of the 1968 Fair Housing Act on Long Island.
The State of Connecticut's Department of Housing, meanwhile, just released this major study of the challenges to the state's housing supply. The study's authors recommend proactive investments, the prioritization of resources based on need, and our personal favorite, a commitment to regional planning.
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What We're Thinking About
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While we've focused on residential sales trends in the NYC Metro, Zillow has been exploring similar issues on a national scale. Their research found that while suburban homes were selling faster by the end of 2020, value growth and sales volumes in urban areas have largely kept pace with those in suburban areas, New York City and San Francisco being the lone exceptions.
Housing demand is part of the reason the nation is facing a 50-year low in inventory, but restrictive zoning codes, especially in more mature, higher density markets, also squeeze supply. For a visual depiction of what that looks like in Connecticut, check out this first-of-its-kind, interactive map.
Speaking of interesting visual takes on the region, we thought you might enjoy these fascinating, interactive maps of New Jersey. Our favorite shows the dramatic expansion of that state's urbanized places over the last 30 years. You can read more about their creator here.
Finally, with the change of administrations in Washington, there's been a renewed focus on fair housing. If you didn't already see it, this memorandum from President Biden signals his administration's willingness to work with communities to end housing discrimination, and to lift barriers that restrict housing and neighborhood choice.
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NYC Metro Region Explorer
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NYC Metro Region Explorer continues to work for you. Click the image above and you'll see there's considerable variation within NYC Metro housing markets when it comes to owned versus rental housing. In NYC, for instance, just one-third of homes are owner-occupied, whereas on Long Island that number is 80%. It's for this reason that the residential sales figures in our latest report are more representative of our region's suburbs than they are of the city itself.
If these or related issues are of interest, don't forget to bookmark the Explorer on your browser.
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Does the NYC Metro Explorer facilitate your work? If so,
reach out to us directly
to tell us more, and how we might make it even more useful.
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Upcoming Planning Events
Across the Region
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About Us
NYC DCP's Regional Planning Division was borne out of
OneNYC, the Mayor’s long-term plan for the city, which highlighted the need for the city to work with neighbors across borders to promote a sustainable and equitable future for our shared region. You can read more about our team and our work here.
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