New York is having a difficult time right now. Although the latest tax reports from local governments are relatively high, considering everything that we have been going through, they were largely so due to first quarter collections prior to the deepening effects of covid. Through the quarantine mandate Governor Anthony Cuomo set in place, many purchases that were previously taxable were less in demand while demand for others that were either made online or otherwise had lower tax benefits (to the local governments). You can read more about the details on a recently published article here.
After Reading So Come Back...Otherwise TLDR!
One thing that could potentially offset some declines in sales tax collections is increased internet sales. Over the past two decades, consumer spending has been shifting from traditional brick-and-mortar shopping establishments to online marketplaces. This trend appears to have accelerated in the middle of March, in response to the pandemic.14 (pg. 3)
I believe this has changed the landscape of New York City Real Estate. With higher federal spending, local debt mounting, and a high unemployment rate; next quarter might have disastrous results. Not only could this create less of a demand in the intermediate to long term future for commercial property, but perhaps also create a parabolic surge for work at home careers, low-overhead healthcare, technology, and etc. On the bright side, perhaps there will be a leveling off of exorbitant rent or sale pricings for such commercial properties. Or, there might be more use variances for residential zones for work at home career paths.
Real Broker NY LLC
Real Estate is a heavily interpersonal industry. Although leads may be generated through an online presence or even through cold calling, at the very end of the day, people want to meet the people they have discussed or heard about before doing business with them. However, due to this heightened awareness of superbugs as of late, it is to my understanding that many investors have bought and sold properties sight unseen (or through digital showings). Perhaps someday, real estate will also adopt similar Amazonian practices where consumers purchase real estate digitally with the help of a Realtor online. Perhaps there will be a review process where consumers will look for online ratings and presence to make a judge before purchasing one of the biggest purchases of their lives: their home.
The Uncertainty is Fascinatingly Bittersweet!
Through tragedy there comes rebirth. And through loss, there is always a bounce back. I taught one of my nieces this, and she will most definitely remember it as she grows older:
Me: "What goes up..must come...?
Niece: 'DOWNNN!'"
Me: "And what goes down...? Must come...?
Niece: 'UP!'"
It was the cutest thing seeing her do that at three, but when she turned four, she's been growing more and more independent and eloquent so she doesn't say it in the same manner she did when she was 3. Nevertheless, I hope you and my niece both adapt to this tragedy and bounce back even stronger than ever.
Yours in commerce and friendship,
Alex Sung
Real Estate Salesperson, Real Broker NY LLC
(646) 435-1975
www.alexsungnyc.com
