New York Residential Sales Increase YOY in January

Investment and residential sales in New York jumped 38% year-over-year to $6 billion in January, according to The Real Estate Board of New York.

These sales drive higher tax revenue collections. New York City and New York State collected $190.5 million in transfer tax revenue, a 31% increase compared to January 2020.

Investment and residential sales volume also increased 21% from December 2020 to January 2021. That prompted a 25% increase in transfer tax revenue for the city and state, according to REBNY’s Monthly Investment and Residential Sales Reports.

The real estate industry is projected to generate more than half of the city’s total annual tax revenue in fiscal year 2021.

“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,” said REBNY President James Whelan in prepared remarks.

While January boasted strong numbers, the New York market is still digging out on a hole. From March 2020 through to January 2021, investment sales only totaled $56.4 billion, a 30% decline compared to the March 2019-January 2020 period. As sales fell, New York City and state experienced a $1.6 billion reduction in tax revenue.

From January 2020 to January 2021, total investment sales volume increased 11% to $2.85 billion. That was a 49% increase from the previous month. In the same period, sales transactions increased 26% to 395, a 49% increase from the previous month.

From January 2020 to January 2021, residential sales volume increased 77% to $3.2 billion. That was a 5% increase from the previous month. In that same period, residential sales transactions increased 82% to 3,242 from January 2020 to January 2021. That represents a 3% decline from the previous month. The New York market was hit hard by COVID-19.

As many workers left the city during the pandemic, investment sales dried up in 2020. Last year, investment volumes fell more than 50% in the market, according to research from Cushman & Wakefield, totaling $22.1 billion, marking the lowest investment activity on record since 2010. Investment volumes in Manhattan, Northern Manhattan and the Bronx fell the most significantly, down 55% for the year. Investment volumes in Queens were down 43%, while Brooklyn fared the best with investment volumes down only 24% for the year, according to the Cushman report.