New York City achieved surging real estate sales in January, indicating signs of progress in its economic recovery from the ongoing COVID-19 pandemic, according to a new report from the Real Estate Board of New York.
The real estate trade group reported Thursday that investment and residential sales totaled $6 billion last month, marking a 38 percent increase compared to January 2020. The volume of real estate sales rose 21 percent from December 2020.
Total investment sales volume in January hit $2.85 billion, an 11 percent increase from the year-earlier period and 49 percent from the previous month. The number of investment sales transactions jumped 26 percent year-over-year to 395, a 49 percent gain from December 2020.
“As New York City continues to face significant challenges, tax revenue generated by the resurgence of real estate market activity will play a central role in driving the City’s economic recovery and funding basic government services that millions of New Yorkers rely on,” REBNY President James Whelan said in a statement. “It is critical that elected officials stay focused on continuing this momentum by delivering additional federal aid, ensuring successful vaccination and rapid testing efforts, and demonstrating leadership with policies that promote job creation, private sector investment and good quality of life for all residents.”
January’s report showed a more optimistic picture compared to REBNY’s mid-year 2020 data released in August, showing that New York City’s volume of investment sales dipped 54 percent compared to the first six months of 2019.
Residential sales rose to $3.2 billion, a 77 percent increase from January 2020 to January 2021, and a 5 percent increase from this past December. Transactions for residential sales spiked 82 percent in January from the year-ago period at 3,242, which marked a 3 percent decline from the prior month.
REBY noted that the year-over-year real estate sale spike resulted in New York City and New York state collecting $190.5 million in transfer tax revenue, a 31 percent jump from January 2020. The month-over-month boost netted the city and state a 25 percent rise in transfer tax revenue, according to REBNY’s Monthly Investment and Residential Sales Reports.
Despite some recent strides, REBNY cautioned that the COVID-19 pandemic has still had a severe impact on New York City’s real estate industry and a long recovery still remains.
Total investment and residential sales volume from the beginning of the COVID-19 pandemic in March 2020 through to January 2021 are down 30 percent, at $56.4 billion, compared to the March 2019 through January 2020 period, which caused a 34 percent tax revenue decline. New York City and New York state combined experienced a $1.6 billion tax revenue loss in 2020.
The real estate industry is projected to generate more than half of New York City’s total annual tax revenue in the 2021 fiscal year, which is more than double the next closest contributor, the personal income tax at 20 percent, according to REBNY.