New York City Real Estate Sale Price Changes at the Height of the COVID-19 Pandemic

Overview

I set out to understand how real estate sales prices in New York City have changed throughout 2020 as the COVID-19 pandemic shut down offices, schools, and businesses throughout the city. In a place like New York City where, thanks to a relatively high density — a result of the appeal of the city’s economic activity including many amenities such as restaurants, theaters, museums, etc. and the presence of finance and marketing hubs, among others, that attract employees and customers — apartments and homes are relatively smaller than nearby municipalities. With that in mind, and as people have been forced people to retreat to their homes to carry out all of their normal activities, I wanted to understand how New York’s real estate sales prices reacted to folks’ need to spend more time at home in the midst of the pandemic. My goal was to understand if New York’s real estate market is reflecting a decreased interest in folks planting their roots here for the long-run. Assuming that real estate sales prices serve as a reasonable reflection of folks’ interest in living in New York City, I used the NYC Department of Finance’s Rolling Sales Data to glean insight into how individuals’ interest in living in New York has changed from January 2020 to August of 2020 (the latest point at which sales data is available).

Research Questions

Since New York City’s social distancing mandates largely went into effect in March 2020, I wanted to use real estate sales prices from a few months prior to that moment to capture market prices prior to when social distancing measures may have impacted buyers’ decisions. Along the same lines, I wanted to capture market prices with social distancing measures in place, and the city operating under a “new normal”. That said, I asked the following question:

Findings

How have 2020 property sales prices changed in New York City from the months of January to August?

Reflections

It is worth noting that, by virtue of conducting my analysis on property sales data, my analysis naturally misses sales that didn’t occur. This means that the data and corresponding analysis does not capture the value of properties available for sale or the assessed value of existing properties not for sale. Thus, the data may only capture a portion of the real estate market that reflects instances when owners were willing to conduct sales during the observed time period. So if it has been the case that property owners have chosen to hold on to their properties until social distancing requirements and the effects of the pandemic subside, then the transactions observed do not capture a more wholistic picture of the assessed value of properties in New York City (and the implied effects to the New York City real estate market), instead only capturing properties with owners who were willing to sell during this period. The assessed data could reflect scenarios in which the property sale prices would only be marginally affected by unexpected shocks like a pandemic, such as with the sale of blight that is already minimally valued. To account for this, future analyses should incorporate an assessment of how many sales were foregone during this period by evaluating how many real estate listings were created then removed without a reported sale during the observed period. This future analysis should be sure to account for the financial value of those foregone sales as well.

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