REX, the real estate technology company connecting residential real estate buyers and sellers and offering the lowest transaction costs in the industry, released two new reports Wednesday analyzing housing market trends in New York and New Jersey.
Public data compiled and analyzed by REX’s data team, led by Chief Data Scientist Andy Terrel, shows housing markets in both states experienced significant setbacks as COVID-19 impacted jobs, real estate activity, rent, and state revenue. However, some small metro areas – particularly in New Jersey and high-end markets such as Nassau County – showed signs of recovery throughout the summer months.
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New York Housing Market Setbacks Impacting State Revenue and Employment
As of July 1, 2020, closed home sales across New York state were down by 34 percent compared to a year ago. Active listings declined 20 percent with days on market spiking 18% over the same period of time.
- Homeownership in several communities experienced significant declines: 17 percent in Brooklyn, 60 percent in Queens County, 26 percent in the Bronx, and 30 percent in Staten Island.
- Excluding New York City, professional and business services sector jobs and construction jobs have rebounded since April, but are still below pre-COVID levels. Employment in professional and business services fell from 1.4 million in February 2020 to 1.2 million in June 2020. Employment in financial activities (finance, insurance, and real estate) fell from 724,000 in February 2020 to 684,000 in June 2020.
- The New York Department of Budget enacted a FY2021 budget of $94.9 billion —a 7 percent decrease from FY2020.
Exodus From New York City Continues
Over the month of July 2020, REX’s marketing and sales team discovered a significant spike in New York City residents showing interest in REX listings located beyond Manhattan. To test this activity, the marketing team decided to target homeowners in New York City with a number of different messages about REX’s unique value to sellers. The results matched growing traffic on REX’s online platform showing a ‘list with REX and leave the city’ message was three times more likely to convert to seller leads than other value proposition statements.
- As of July 1, 2020, year over year sales prices in Queens declined 4 percent with Brooklyn prices declining 3 percent. Prices in the Bronx dropped 11 percent and Staten Island experienced a 7 percent drop.
- 735,000 New York City households have lost employment income as a result of COVID-19; 526K households have filed for unemployment insurance.
- Employment in financial services, insurance and real estate continued to decrease across the city as of July 1, 2020. Jobs loss in real estate, rental and leasing fell from 136K in February 2020 to 118K in June 2020.
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New Jersey Still Experiencing COVID Impacts But Rebounding Faster Than New York
As of July 1, 2020, year over year pending residential home sales in New Jersey were actually up 30 percent. Closed sales were down across the state and in some larger communities (down 27 percent in Bergen County), but the June jump is a significant increase compared to historical YOY numbers and reflects pent up demand and long term growth in local markets.
Further encouragement can be found in housing values with the median sales price spiking 7 percent in June compared to the same period last year.
Despite these bright spots, housing affordability and short term unemployment continues to be an issue in New Jersey:
- In June 2020, 26 percent of New Jersey’s renter population was extremely low income (less than $30,390 in annual income) and coping with a shortage of 214,000 affordable rentals. National data shows 74 percent of low-income renter households are severely cost-burdened.
- Days on market in New Jersey has increased in June by 9 percent year over year with condos and townhomes jumping 20 percent year over year.
- Employment in professional and business services, financial activities, and construction are down from pre-COVID levels, but have partially recovered since bottoming out in April. Professional and business services fell from 690,000 in February 2020 to 606,000 in June 2020. Financial activities (finance, insurance, and real estate) fell from 254,000 in February 2020 to 238,000 in June 2020. Employment in construction fell from 167,000 in February 2020 to 144,000 in June 2020.
REX’s Local Growth in Consumer-Driven Economy Tied To AI Technology and Online Platform
The broader Tri-State region has consistently ranked among REX’s top performing markets in sales and seller leads. However, since the onset of the novel coronavirus pandemic, REX’s business has rapidly expanded across both New York and New Jersey as consumers and job seekers responded to the crisis seeking new opportunities and savings in real estate.
“From a policy standpoint, everyone wins with REX. By harnessing data to match home buyers and sellers in a safe and convenient way, REX is driving down real estate transaction costs by 60% to 70%,” said New Jersey’s 55th Governor Chris Christie.
“And by reducing transaction costs, REX is spurring home ownership by reducing the price of homes, boosting job mobility by reducing the costs to move, more easily allowing parents to move to the right school for their child, stimulating more jobs and higher wages for all of the building trades and service providers many of whose projects cluster around the construction and purchase and sale of existing homes–from painters and carpenters to electricians, landscapers, and contractors. The bottom line is that REX’s tremendous rise in New Jersey is all good news.”
Data points to significant growth since the beginning of the COVID-19 pandemic:
- Homeowners in both states are increasingly turning to REX to market and sell their home. Seller leads in New Jersey are up 134 percent in July compared to February. In New York, leads have jumped 153 percent over the same period.
- Interested buyers are taking advantage of REX’s online platform and industry-first virtual showings tool. Since April 2020, requests to tour REX’s listings in New Jersey have jumped 170% and 380 percent in New York. Tours in New York spiked a full 100 percent between June and July.
- REX is continuing to convert offers to escrows at a rapid pace after posting record company figures in the month of July. In New Jersey, REX escrows are up 67% from April and 300% in New York over the same period.
“It is clear REX’s ability to help buyers and sellers find and tour a home online is an advantage for residents in New York City and other large metro areas as they look to smaller metro areas,” said REX’s Chief Data Scientist Andy Terrel. “COVID-19 has had profound impacts on our economy, but is also shifting how we view the communities we live and work in. REX is helping meet real estate consumers’ specific needs right now, but more broadly, the data is showing our tools and services continue to enhance job mobility during a unique moment in history.”
