Given that we’re only just approaching the midpoint of the nation’s 15-day pause to stop the spread of coronavirus/COVID-19 (with extensions of stay-at-home orders and business closings looking likely), it may feel premature to talk about what we may expect when the crisis ends. But people most certainly are talking about the post-pandemic market -- with the topic becoming even more relevant on Monday, March 23, when President Trump seemed to suggest via Twitter that he’s considering relaxing the restrictions currently in place to slow the spread of the deadly disease.
How does that relate to the real estate market? The Cooperator spoke with a trio of industry experts to determine what direction urban housing markets in New York and across the nation may take as the crisis hopefully subsides. The first question is, how much of what may be ahead for the real estate market will be a direct result of the crisis, and how much may be attributable to underlying factors and forces that predated the pandemic?
What Was Happening Before Covid-19 Arrived?
While the arrival of the worst infectious pandemic in over a century has caused the abrupt shutdown of huge swaths of economic activity in New York City and many other urban markets, New York real estate was already experiencing a slowdown, mostly as a result of previous changes to tax laws at federal, state and local levels. The most severe effects were generally felt to be the result of changes in the treatment of state and local (SALT) taxes at the federal level, which has been acknowledged by many national experts as a serious depressant on home prices and values in all states negatively impacted -- particularly New York, New Jersey, California, and Illinois.
Jonathan Miller, President and CEO of Miller Samuel, a national real estate and appraisal firm based in New York, observes that in the two years since the enactment of the new tax law, the co-op and condo market has begun to adjust to its new reality. He believes that prices and market conditions were stabilizing before the new coronavirus exploded onto the world stage.