Commercial and residential demand takes a hit

The slogan "New York Tough" has been used by Governor Andrew Cuomo at his daily briefings to describe how the state has stood up to the coronavirus pandemic.

Now, with the state and city of New York experiencing one of the lowest transmission rates for the virus since the start of the outbreak, questions are being asked as to whether the Big Apple is tough enough to make a comeback.

Many observers believe it will rebound just as it did after the attacks on Sept 11,2001, despite forecasts that the metropolis is doomed.

However, many aspects of life in the city, especially Manhattan, have been severely hit from luxury boutiques to small mom-and-pop neighborhood stores. There has been a significant reduction in the number of restaurants. Shows staged by Broadway theaters, the New York City Ballet, Metropolitan Opera and Carnegie Hall have been cancelled, along with the New York City Marathon.

Two of Manhattan's biggest mainstays are also struggling－the residential and commercial real estate markets.

The residential market has plummeted by a record level, reeling from the combined effects of COVID-19 and thousands who have fled the city for second homes or short-term rentals.

The commercial market is feeling the impact of employees working from home, possibly never returning to office space and leaving behind vacant square footage that will affect commercial rents as tax revenue.

Sales in the residential market during the pandemic have fallen by 54 percent year-on-year.

In June, the number of contracts signed for apartments fell by 76 percent compared with the same period last year. At least 90 percent of sales in the second quarter were signed before the onset of the pandemic.

No figures have been disclosed for the total area of Manhattan office space left vacant by those working from home, but several companies have decided against employees coming into the city.

The pandemic's impact on commercial stores is clearly visible in popular shopping areas such as Madison Avenue, Fifth Avenue and Lower Manhattan. "For rent" signs in store windows have replaced displays of shoes, jewelry, designer outfits and other luxury goods.

A report released recently by real estate company Douglas Elliman showed that the median sales price for apartments fell by 17.7 percent from last year to $1 million, the biggest decline for a decade. According to real estate brokerage Compass, there were only 1,147 sales in Manhattan in the second quarter, the lowest number on record.

Jonathan Miller, a New York appraiser and the author of the report, told The New York Times: "This is what you get when the market is not able to function. It's an extreme moment, to put it mildly."

In addition to the pandemic, the residential market was hit by Cuomo banning in-person apartment showings by brokers from mid-March to June 22 to stem the spread of COVID-19.