NEW YORK – A subtle mist covers the city; the once beaming sun is now tucked away behind dark clouds as rain pours onto the once bustling streets. With no one around, rain slams onto the concrete where the pitter patter of footsteps is nothing but a memory. Below the surface, thunderous subways charge through now desolate tunnels. On March 17th, 1.78 million rode the subway compared to 5.57 million on the same day in 2019. Remote work has become the norm, commuters comfortably rested in their apartments as life outside was put on pause. A pandemic swept the globe, attention was focused on either adapting to a COVID-19 version of New York or leave.
Whether it was the upper-class flocking to their estates or students returning home, a vast number of vacancies occurred. Overnight, COVID-19 created a deficit of properties across the United States. A transformative period that amplified the shift to online consumerism. If a business wasn’t already adjusted to support a fully online platform, they would face risk of obscurity. The e-commerce push magnified already outrageous demands for industry space. With self-storage facilities thriving, cinemas, hotels, and student housing all were seriously impacted.
During this initial wave, schools like The University of California, Santa Barbara saw a 93% drop in on-campus housing. While schools such as Georgetown rejected upwards of 2,000 students who applied for fall on-campus housing.
30 million Americans rely on some form of unemployment benefits, online real estate company Zillow, reported that 3 million U.S adults moved back in with their parents.
Real estate developers scrambled to generate permits as construction delays continued. More delays meant real estate capital could not generate the cash flow they once had, resulting in a never-ending amount of debt. In Manhattan, the borough is facing its lowest rental numbers in 14 years.
Relocations from New York to Connecticut was 74% higher this year compared to 2019. According to FlatRateMoving.com, moves from Manhattan to New Jersey likewise saw a rise of 38%, and Manhattan to Long Island had a rise of 48%. The pandemic had increased the demand for larger homes with more outdoor space. Both New York and San Francisco had a significant amount of their population swarm to smaller cities or suburban areas.
While more enterprises switched to at home platform, companies like Google announced their employees will work from home until July 2021. Areas like Lake Tahoe saw a massive surge in home purchases, properties that would normally take months to sell would sell in days. Nearby Truckee saw a 23% increase in houses sold compared to last year.
The Bay Area saw declines of 15.7% in Mountain View, 13.5% in Menlo Park and 15.7% in Cupertino. Leaving a shortage of demand for one-bedroom apartment rentals in San Francisco, which saw an unprecedented 12% drop in rental rates.
Like many cities, Toronto had an influx of residents set sail towards the suburbs. Towns like Barrie had home prices rise 6% from the beginning of this year, meanwhile, the average condo price in Toronto fell 5.5%. With a 66% decrease in sales compared to last year, Toronto is currently the only North American city that is at risk of a housing bubble. Because of the high cost of living, cities like Vancouver, New York, Los Angeles, and San Francisco are not at risk.
With fall approaching, more business struggle to stay afloat. Cineworld is shutting down all of its Regal Cinema’s in the U.S, U.K, and Ireland. Following suite, the Quebec Government announced the temporary shutdown of all of the province’s Cinema Guzzos. The delay of James Bond’s ‘No Time to Die’ was seemingly the last straw for theatres.
One has to wonder how offices will adjust. While new regulations are all but a guarantee, companies may seek creative ways to take advantage of established square footage. Given that social distancing becomes the norm, open plan offices will have to adjust, and enclosed spaces may make their way back.
Many employees may continue to seek the security of working from home. Labor needs may become more about the individual need as opposed to a collective desire. At this moment, it is unclear what will happen to the massive amount of space left behind and when people will be there to fill it.
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