New York City is back

new york city central park
As seen here in Central Park’s Sheep Meadow, the spirit of NYC is alive and well.

  • New York City is back.
  • America’s biggest city is recovering as New Yorkers return and its economy reopens.
  • It’s not the same as pre-pandemic NYC, but it’s the beginning of the city’s next chapter.
  • See more stories on Insider’s business page.

I knew New York City was back when I found myself dancing on top of a booth in an East Village bar last weekend.

The night began with dinner out and ended with another bargoer’s drink on my shoe, eating pizza on the street, and an invitation from a six-pack-wielding stranger for my friends and I to drink beer and play “Mario Kart” at his apartment.

That is all to say: It was a normal Saturday night in NYC, one event in a weekend that felt very much like the Before Times. I also worked in the Insider office for the first time that Friday and hit the gym on Sunday.

Pfizer made all these adventures possible, and it seems that the vaccines are having the same effect on New Yorkers across the city.

For the past month, I’ve noticed the magical – and exhausting – things that make New York New York coming to life again: a stalled 1 train, a crowded 6 train, getting turned down by a full cab, tourists getting in my way of shopping on Fifth Avenue, trying four newly opened restaurants, the throngs of sunbathers and picnickers in Central Park, and the familiar murmurs of gossip and chatter over wine glasses on a rooftop. It’s not just a feeling: New York City’s economy is genuinely healing.

It’s also a far cry from a year ago, when New York became the center of the coronavirus in the US and everything that once lit up New York – the distant squares of office windows, taxi-cab lights, and Times Square – dimmed.

Even today, traces of pandemic NYC remain. My Saturday bar closed at midnight, and it took about four attempts to grab a late-night bite to eat at a restaurant not closing by 11 p.m. on Friday night, an insult in the city that never sleeps.

But the return of New Yorkers, lockdown lifting, and a financial boost have revived the city’s energy. NYC as we once knew it is gone, but the big city is back.

New Yorkers can’t stay away

NYC’s obituary was written countless times in 2020, prompted by shuttering businesses and the wealthy fleeing to upstate for more space or to the palm trees down south.

But the city “was just taking a nap,” Bella, a 28-year-old transplant New Yorker, told me. She joked she knew it was back after recently being catcalled by a gang of bicyclers.

Read more: Florida isn’t replacing New York after all

The data agrees with Bella’s diagnosis. The supposed mass exodus out of the city wasn’t so massive, according to recent data from USPS. According to Bloomberg, more Manhattanites moved to Brooklyn than anywhere else between March 2020 and February – 20,000 of them, compared with 19,000 Manhattanites who moved to Florida, 10,000 of whom plan to stay permanently. They’ll probably be back.

NYC also remains home to 7,743 ultra-high-net-worth individuals – more than any other city in the world, according to a Knight Frank and Douglas Elliman report from March. Mansion Global said the number of outward migrants from the NYC metro area ticked upward from 2019 to 2020 – a loss of 6.6 per 1,000 residents grew to 10.9 – but those who left for the suburbs were already returning.

Washington Square PArk NYC
New Yorkers hanging out in Washington Square Park.

City real estate, once plummeting, is rebounding. New Yorkers are upgrading to wealthier neighborhoods and fancier apartments, while there’s evidence that overseas buyers are starting to drive sales again, as are young professionals looking to buy for the first time. The number of sales in Manhattan increased by 28.7% from the last three months of 2020 to the first three of 2021, according to a Douglas Elliman report.

Brooklyn’s real-estate market is recovering the fastest, and the borough has become so popular, it now costs nearly as much to live there as it does in Manhattan, The New York Times reported.

“Whoever wrote off New York was wrong,” Kenneth Horn, the founder of Alchemy Properties, told Mansion Global. “This, of course, has been horrible. We’ve lived through a lot different, right. But people want to live in New York. People love the vibrancy.”

Late-night bars and subways

NYC hasn’t even reached its peak return of residents, but it already feels alive. A recent Bank of America Research note, from a team led by Head of US Economics Michelle Meyer, said this month would spark a dominolike return to the city, ultimately proving the mass exodus narrative was more myth than reality.

By the end of May, restrictions lifted include: most industry capacity limits, the limit on residential outdoor gatherings, the mask mandate for vaccinated people, and the midnight outdoor- and indoor-dining-area curfew for bars and restaurants.

Read more: The urban exodus out of New York City and San Francisco is more myth than reality

As a city dweller, I no longer have to order food with my Moscow mule, and I can resume my love-hate relationship with the subway again 24/7. I can book a ticket for Broadway in September, listen to crowds roar during a Knicks game at Madison Square Garden, and start checking out library books.

As Gov. Andrew Cuomo of New York wrote in a Tweet announcing some of these reopenings earlier this month, “NY is coming back!”

new york city subway
The subway is resuming its 24/7 service.

Now, while the state of New York officially reopened in May, Mayor Bill de Blasio has announced that he’s eyeing a full reopening for the city on July 1 and plans to eliminate remote learning come fall. But the Legislature unwinding many of the lifts has made it feel like city is already back in action.

Offices, too, have jumped on the reopening spree. Wall Street is preparing for its summer return in a matter of weeks, with both Credit Suisse and Goldman Sachs asking their employees to come back to the office starting mid-June. Over in tech, Facebook is gearing up to bring its employees back to its New York City offices.

“I haven’t had hope for any return to actual normalcy until now, seeing people both indoor and outdoors without masks, and it’s really starting to hit me that this wasn’t actually going to be forever,” Kelsey Peter, a 27-year-old nonprofit worker who stayed in NYC when the pandemic hit, told Insider.

Cash is flowing

The boomerang migration, uptick in real estate, and economic reopening are all helping cash flow again in a city made of money.

Card spending was up by 38% in the NYC metro area compared with the previous year and 17% compared with two years ago for the week ending May 22, according to BofA Research.

Spending on brick-and-mortar retail in NYC by local households hovered around 70% by the end of 2020, as compared to a 74% pre-pandemic trend, indicating a minimal drop from outmigration, BofA also found, while in-person spending on restaurants has improved. As of mid-April, it was still down 30% compared with two years ago but a major improvement from the 70% drop at the end of January.

NYC’s finances are also in better shape than expected. While the state’s tax revenue collected over the past fiscal year was $513.3 million lower than the previous year, the state was fearing a $3 billion bigger drop, New York Comptroller Thomas DiNapoli told Bloomberg, and a large chunk of that came from the city.

times square new york city
Crowds are back in Times Square.

And President Joe Biden’s stimulus package included $5.6 billion for NYC, which Insider’s Juliana Kaplan reported likely saved catastrophic cuts to the city budget. This sentiment was largely confirmed at a City Council hearing in March, when Department of Finance Commissioner Sherif Soliman said this federal aid had given the city a “shot in the arm” financially and his office was optimistic for a “full recovery.”

At the end of April, de Blasio announced a $98.6 billion budget, $10 billion higher than previously planned, to help jump-start the city’s recovery. “These investments are about bringing the city back, and they just can’t wait,” he said in a press briefing, according to the New York Daily News. “Sometimes you have to spend money to make money.”

Read more: Millionaire New Yorkers are now set to pay the highest taxes in the country

However, long-term budget challenges still loom. Some experts have said there’s no guarantee NYC will be able to continue funding de Blasio’s budget, calling on him to do more.

But NYC is also set to get another injection of money beginning next year, now that Cuomo has finalized a budget that would have millionaire New Yorkers pay 13.5% to 14.8% in local and state taxes – the highest taxes in the country.

NYC’s next chapter

To say NYC 2021 resembles NYC 2019 would be inaccurate. Several aspects of the city still aren’t quite “normal.”

Tourism may not fully recover until 2025, plenty of the wealthy did permanently move or have yet to return, and central business districts like midtown aren’t their typical bustling selves. The amount of Manhattan office space available is the highest it’s been in 30 years, and rents also haven’t reached their pre-pandemic norms, signaling that NYC’s population still isn’t what it was. Urban areas stand to see an estimated 10% drop in spending from an economy where more workers are remote – and even more in cities like New York.

The city’s vaccination rollout could also pose a challenge to the progress made so far. While nearly 61% of NYC adults have at least one dose of the vaccine, that still leaves about 39% who aren’t vaccinated. Vaccination rates are slowing across the state as a whole, leading de Blasio to offer weekly incentives for getting vaccinated.

The contagious coronavirus variant spreading throughout India and other parts of Asia may also bring with it a risk of some form of lockdown returning later this year. On Thursday, UK Prime Minister Boris Johnson said that the country’s full reopening could be delayed because of the variant, despite a successful vaccination campaign similar to America’s.

baby brasa's nyc
Brunch at Baby Brasa reviving that NYC energy.

And while NYC is never going to return to its 2019 economy, just as America itself won’t, that doesn’t mean that the city has lost its luster. Much like it did after the Great Depression and 9/11, NYC is entering the next chapter of its life – and that’s starting now, in line with the race for a new mayor come November.

BofA noted potential for some recovery in the near term, as NYC remains a “premier city for young renters given status as economic, financial, and cultural centers.” The pullback in rents, it said, has also helped make NYC living more affordable and enticing for young professionals.

Read more: It’s starting to look like New York City will be just fine

As the city was once America’s coronavirus center, NYC’s reopening serves as a metaphor for the country’s pandemic progress. It’s also revived the city’s intangible energy.

For some, this part of NYC never died. Even when the city felt empty, Peter said, there were so many people looking out for each other.

“You would get used to seeing the same vendor’s face at the wine store or at the coffee shop when you’re getting to-go,” she added. “That was all during the worst of it, and things only got better from there. It was always a community.”

As someone who also rode out the pandemic out in Manhattan, I agree with Peter. My local bodega owner, the friendly parking-garage attendant on my street, and a fellow parkgoer and his five poodles became the faces I’d typically see during my pandemic routine. With endless options to experience the city again, I’m back to encountering strangers and forgotten faces on the regular, from my waiter at Lil’ Frankie’s to my hairstylist and colorist, so much so that it’s getting somewhat exhausting.

That can mean only one thing: New York is back.

Read the original article on Business Insider

Two NYC mayoral candidates think the median home in Brooklyn sells for less than $100,000. Only Yang guessed correctly.

donovan mcghuire brooklyn housing 2x1
New York City Democratic mayoral candidates Ray McGuire (left) and Shaun Donovan (right).

  • Two NYC mayoral candidates were way off target when asked to guess home prices in Brooklyn.
  • Democrats Shaun Donovan and Ray McGuire were off by around $800,000 on the median sale price.
  • Andrew Yang was the only one who answered correctly during his interview with The New York Times editorial board.
  • See more stories on Insider’s business page.

A pair of Democratic New York City mayoral candidates offered drastically low estimates when asked about the median housing price in Brooklyn.

Ex-Citigroup executive Ray Donovan estimated that the middle figure was around $80,000 to $90,000. Former Housing and Urban Development Secretary Shaun Donovan guessed $100,00. Both were wrong – by some $800,000.

The question from Mara Gay of The New York Times editorial board took the pulse of how familiar the candidates are with the Big Apple’s affordable housing crisis.

“In Brooklyn, that number has gone up now,” McGuire said. “It depends on where in Brooklyn.”

Gay reiterated that it’s the median for the borough, meaning the price at which half of homes are more expensive and half are less.

“It’s got to be somewhere in the $80,000 to $90,000 range, if not higher,” McGuire said.

To that, Gay said: “The median sales price for a home in Brooklyn is $900,000.”

McGuire did, however, correctly estimate that the median rental price for an apartment in Manhattan is $3,000 per month.

Donovan, who ran the Department of Housing and Urban Development in the Obama administration from 2009 to 2014, ended up offering an even lower figure.

“In Brooklyn, huh?” Donovan said in his interview. “I don’t [know] for sure. I would guess it is around $100,000.”

When Gay pointed to the $900,000 figure, Donovan asked if it included apartments. He later emailed the Times saying that his estimate referred to the assessed value of homes in the borough, adding “I really don’t think you can buy a house in Brooklyn today for that little.”

Frontrunner Andrew Yang ended up getting the figure spot-on when he was asked the same question.

“This is, like, blowing my mind, this question,” Yang said in his editorial board interview. “So median home – could be any size, right? So some of them would be very substantial. But you’re looking at the median, so you have to, like, whittle down. I would just say that the median – it’s going to be something, like, much higher than it should be. So the number that popped into my mind is $900,000.”

“That’s exactly right,” Gay replied.

“No way!” Yang said. “I was going to go with $800,00 or $900,000.”

Other candidates in the field overshot the figure, with City Comptroller Scott Stringer pegging it at around $1 million, and attorney Maya Wiley offering the highest estimate at $1.8 million. Meanwhile, Brooklyn Borough President Eric Adams guessed that it was $550,000, while non-profit executive Diane Morales put it at $500,000.

Kathryn Garcia, former commissioner of the city’s Sanitation Department, said the median housing price in Brooklyn was $800,000. She received the Times endorsement.

Read the original article on Business Insider

I’m a millennial who bought a Brooklyn apartment this year, and I was only able to because of the pandemic

Moving, milennial home ownership
Moving: It’s no fun at all.

  • Late last year, in the middle of the pandemic lockdown, my wife and I bought a Brooklyn apartment.
  • After graduating college into the financial crisis, the odds of homeownership were not in our favor.
  • The pandemic forced banks to offer historically low mortgage interest rates and allowed us to buy an apartment.
  • Visit the Business section of Insider for more stories.

For the last decade, as friends and relatives bought homes, my wife and I paid rent.

More specifically, we paid rent in New York City – which is to say we paid a lot of money in rent. So, so much. I try not to think about it, honestly.

We did it because we love living here, and Brooklyn is home. I considered it a necessary evil of living in the greatest city in the world.

But this January, just after the most uneventful New Year’s Eve in New York City history, we closed on a one bedroom Brooklyn co-op apartment. If you’d asked me in January 2020, “Will you ever buy a home in New York City?” the answer would’ve been simple: “No, not unless we win the lottery.”

Real estate prices in New York are notoriously high, of course, but that’s just one of several issues facing potential buyers. Not only is it expensive, but it’s extremely competitive. Before the pandemic hit, just going to see an available place in Brooklyn meant competing against people with, frankly, a lot more money than me. I am never going to outbid someone who makes $500,000 annually.

So, how did a couple of avocado toast-eating, cold brew-swilling, MacBook-using millennials manage to buy a home in Brooklyn?

Millennial homeowners
The avocado toast tastes so much better when you make it in the kitchen of the home you own.

It boils down to several key factors:

1. We are immensely lucky and privileged.

My wife and I graduated from college directly into the 2008/2009 subprime mortgage-spurred market collapse that led to a massive recession. Unlike so many of our peers, we were both tremendously lucky to get jobs directly out of college doing what we went to college to do: I am a journalist and my wife is an environmental scientist. I consider myself particularly lucky in this respect, as the media business isn’t known for its stability.

We are also both white Americans, which confers a variety of privileges throughout our lives. Literally everything was easier because of these factors, and must be acknowledged up front.

Because we were lucky enough to have steady employment for years after college, we had good credit scores from years of paying bills on time. That steady employment history coupled with good credit scores meant we were easily pre-qualified for home loans at low rates.

Notably, we don’t have kids, and we saved money steadily for several years before beginning this process.

2. The pandemic.

QUEENS, NEW YORK - MARCH 30: Two members of the Fire Department of New York"u2019s Emergency Medical Team wheel in a patient with potentially fatal coronavirus to the Elmhurst Hospital Center in the Queens borough of New York City on March 30, 2020. New York City is the epicenter of the coronavirus pandemic in the United States, putting historic pressure on a world-renowned healthcare system as the number of confirmed cases in the area grows. (Photo by Robert Nickelsberg/Getty Images)
Two members of the Fire Department of New York Emergency Medical Team wheel in a patient with potentially fatal coronavirus to the Elmhurst Hospital Center in Queens, New York City on March 30, 2020. New York City was the epicenter of the American coronavirus outbreak.

Above all else, the global pandemic was the most immediate reason we were able to buy an apartment.

If it weren’t for the coronavirus pandemic, the housing market wouldn’t have been in the gutter. If it weren’t for the coronavirus pandemic, we would’ve had to compete with crowds of interested buyers. If it weren’t for the coronavirus pandemic, mortgage rates would’ve priced us out of the market.

It’s horrifically sad that this is the case, but it’s very much the truth. We locked in a 30-year fixed-rate home loan at a 2.75% interest rate. That is a historically low rate, and enables us to afford the monthly payments. In fact, our monthly payment is just a touch higher than our last rent price.

Unlike rent, though, our mortgage price doesn’t increase over time. If we choose to move, we can sell the place and are likely to earn some money on the sale thanks to Brooklyn’s already rebounding real estate market. The benefits of homeownership over renting, at least in this respect, are so profound that they’re almost comical. In 10 years, when our mortgage is the same but average NYC rent prices have increased dramatically, we’ll really feel the difference.

3. Timing was critical.

In mid-August 2020, about five months into pandemic lockdowns, a really obnoxious piece was published in the New York Post where a former hedge fund manager Manhattanite declared New York City “dead forever” because he saw a video of Black Lives Matter protesters trying to break into his skyscraper. It was part of a gaggle of trend pieces that summer in which panicked rich people speculated that the pandemic would be the end of New York City.

That struck me as the perfect time to start looking for apartments: If the rich are fleeing, and the home loan rate is low, I figured, maybe there would be a chance for us.

It turns out that was more or less accurate: We only saw five, maybe six places, and we saw them at our leisure. Because of the pandemic, all showings were by appointment only, so there was no pressure to outbid other buyers on the spot.

Also because of the pandemic, a lot of people in our situation – married millennials in their mid-30s – were fleeing to the suburbs. It was as close as Brooklyn gets to a buyer’s market for a young-ish couple.

In the end, our offer was accepted for (slightly) below the listing price. For what we paid for a one bedroom apartment, we could own a pretty nice suburban home. But we don’t want a pretty nice suburban home, and we didn’t have to settle for one.

Got a tip? Contact Insider senior correspondent Ben Gilbert via email (bgilbert@insider.com), or Twitter DM (@realbengilbert). We can keep sources anonymous. Use a non-work device to reach out. PR pitches by email only, please.

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New York City home-buying has begun to rebound after a year of exodus during the COVID-19 pandemic

manhattan new york
Alexander Spatari/Getty Images

  • People are moving back to Manhattan and taking advantage of lower prices in the process.
  • Manhattan home-buying increased 2.1% in the first quarter this year from the same time last year.
  • Prices remain lower than before the pandemic, new data show.
  • See more stories on Insider’s business page.

People are buying up real estate in Manhattan once again after leaving en masse amid the COVID-19 pandemic that hit the city hard.

For the first time since the beginning of 2020, the number of sales topped the year-ago total, according to a report by Douglas Elliman Real Estate brokerage that was first covered by Bloomberg.

Apartment sales in the borough increased 2.1% in the first three months this year as compared to the same time last year when the pandemic struck the city, the report said.

The rebound in March alone was the strongest since 2007, as about 1,500 homes in Manhattan were under contract for sale, according to a report from The Wall Street Journal that cited real-estate analytics firm UrbanDigs.

Buyers are taking advantage of the lower prices, too, with most of those sales closing at or below the asking price. The median rate was $780,000, which was a 3.8% drop from the same quarter a year ago, the Douglas Elliman report said.

Read more: Brooklyn is winning the pandemic. Eager homebuyers are propelling a real-estate surge as Manhattan lags far behind.

The west and east side of Manhattan, as well as downtown, had the strongest sales compared with last year, as upper Manhattan and Midtown had fewer deals, the WSJ said.

Six months into the pandemic, real-estate experts had estimated lower prices and higher vacancies could be the new normal for the city, even if it wasn’t as drastic as during 2020.

With businesses allowing employees to work from home during the pandemic, many people were able to move to outer boroughs for more space and lower prices. Brooklyn proved resilient amid the pandemic, as its sales began bouncing back in the last three months of 2020.

Many others during the pandemic fled to the suburbs, and might stay as companies begin to offer long-term work-from-home options.

Read the original article on Business Insider