Painful Consequences for City Tax Collections
The Volume of Commercial Property Sales in New York City Cratered in the second quarter and the trend will likely accelerate.
Investors purchased only 170 properties valued at $3.6 billion between April 1 and the end of June, the lowest number of transactions for a three-month period since the second quarter of 2009, according to B6 Real Estate Advisors. There were 523 deals valued at $7.6 billion in the second quarter of 2019, said the firm, which specializes in New York commercial property sales.
“Here you see a cliff,” said Adrian Mercado, B6 Real Estate chief information officer.
“The decline in value is the bigger issue for the city to face,” said Mr. Massey, who ran for mayor in 2017. “We could be talking about billions of dollars in unanticipated shortfall.”
Not Just New York
- More people than ever are working at home.
- With social distancing requirements, it’s hard to squeeze into elevators.
- Department stores are in a world or hurt and the trend is unmistakable. Online shopping is killing malls.
Not Just Commercial
https://twitter.com/sftechworker/status/1279800497562513411
That pair of Tweet pertains to residential property, not commercial. That amplifies the concern.
Unemployment is Much Worse Than it Looks
With continued claims hovering near 20 million and perhaps another 10 million collecting PUA, there between 20 million and 30 million people who are going to be in a word of hurt as soon as assistance ends.
They will not be going to the office nor will they be buying real estate.
For discussion, please see Unemployment is Much Worse Than it Looks
Mish
They seem to be intent on making NYC a hellhole. Don’t need much taxes for that.
Inflation in services. Some quotes from Service PMI.
“Inflationary pressures intensified for the first time since February at the end of the second quarter, as both input prices and output charges increased,” IHS Markit added in its Services PMI.
“Companies registered a solid rise in cost burdens as some suppliers hiked prices following the resumption of operations at service providers. The rate of input price inflation was the fastest since February 2019,” it said.
“In response to higher input costs, firms partially passed on higher supplier prices to clients through greater selling prices. The increase was solid overall and the sharpest for 16 months,” it said.
Maybe when NYC goes BK people will just stop listening to anything that the liberal keynesians there have to say. Their opinion isn’t worth spit yet they love to spew it as if it had value.
…juuuust like you do.
best time to buy is when there’s blood in the streets. just be careful to not catch a falling knife. haha
“The decline in value is the bigger issue for the city to face”
As any even half sentient shopper is able to comprehend intuitively: A decline in price, for the same exact good, leads to an increase in value. Not a decline. Manhattan office space, is a much greater, not lesser/declined, value, at $10/square mile, than at an artificially pumped up $million a square foot.
We are talking the immediate neighborhood of the largest Fed welfare office of them all, so I suppose the decline in sentience shouldn’t come as too big a surprise….
Dow 100 million then?
Not sure about 100 million, but we are getting to the point where the Dow may have to “go up” at close to the rate of the Venezuelan IBVC, in order to keep “The System” of crass theft, and nothing but, afloat.
It’s insane how Tesla is now bigger than Intel.
But at the same time, Tesla will now no longer be able to raise any funds from an equity offering. Institutional investors will balk at the current pricing.
When crass theft for the benefit of rank incompetents is absolutely all that is left; it’s not that surprising that the “car maker” least competent at actually making cars, is the most valuable.
After all, making cars (or not) has nothing to do with it anymore. The only thing which matters, is how much of what The Fed and government steals from others, are handed your way.
100million, then 100squillion, and then we go plaid.
With NY descending into a liberal hell hole, I can imaging its economy along with its population plummeting as liberals flee the results of their own policies……..
Of course they will flee to nicer conservative areas, where they will begin the process of turning those places into liberal hell holes……
Covid accelerated trends that were already underway, such as working from home, and shopping online. They may backtrack a bit as covid relaxes, but then the trend will resume. Things will never again be “as they were”.
cnbc:
Delinquencies in commercial mortgage-backed securities jumped by 213 basis points in June to 3.59% from 1.46%.
It was the largest one-month spike since Fitch Ratings began tracking the metric nearly 16 years ago.
The hotel and retail sectors are seeing the worst delinquencies, as the coronavirus has been especially hard on those industries.
The ones that aren’t owned by the trumps are in for some harsh competition by their government funded competitor. Jared’s little enterprise got quite a bit of pork too.
Lots of effects ratcheting through the system–years to go of this mess.
Don’t forget riots and de-funding police.. who’d want to live or shop in a city under these conditions?!
“The decline in value is the bigger issue for the city to face,” said Mr. Massey, who ran for mayor in 2017. “We could be talking about billions of dollars in unanticipated shortfall.”
…
No kidding … and just as predictable as day following night.
Authorities allowing #cancelrent / forbearance / moratorium to run amok has its consequences. But hey, it was all about propping up April / May (and stock market) and the future be damned.
“Commercial property sales cratered in New York City. And it won’t stop there.”
…
Yep.
It is just getting started … and it will leak into residential.
The hit to local tax revenues will be epic.
School districts need more people to take up smoking!
Or the lottery. Conveniently, you can usually buy both at the same place.
It will be quite interesting to look back at these same metrics in about 3-4 months or so.
Greetings, people of the future! I have an important message from The Good Old Days:
A lot of us are still living pretty high, here in the past…. for some it approaches a science fiction utopia, though admittedly it’s pretty rough for most people. Remember that, as you sit on the street with your few belongings, leaned up against an empty building with the others. There was a good time. People were allowed to go into the buildings. There was work for people to do, and they got to choose what they ate. Some people were even comfortable, safe, needed, and fairly happy. It went on for several decades.
Life didn’t suck now, so there’s a chance that there will come a time when life doesn’t suck for you. Our stupidity and inattention put you in this situation, so pay attention and think logically. Try and shove things in the right direction, when you see an opportunity. Don’t give up. Nihilism is inherently pointless, and you really don’t have anything better to do.