Editor's note: Below you'll find the week 26 release of the NYC Recovery Index, originally published Feb. 1, 2021. Visit the NYC Recovery index homepage for the latest data.
New York City’s economic recovery continued to stumble during the week of Jan. 23 as home sales further declined and unemployment claims increased. Despite the overall dip, some index measures, including restaurant reservations and subway ridership, witnessed modest gains week-over-week, while COVID-19 cases dipped slightly.
New York City’s recovery stands at 45.4 out of a total score of 100, according to the New York City Recovery Index, a joint project between Investopedia and NY1. The index decreased 1.7 points from the prior week. Eleven months into the pandemic, New York City’s economic recovery remains less than halfway back to early March 2020 levels and the recent trend has been lower.
COVID-19 Hospitalizations Drop
The number of New York City hospitalizations fell for the first time in more than a month. During the week of Jan. 23, New York City reported an average of 350 hospitalizations per day, down from 363 average daily hospitalizations the previous week. Nonetheless, the high caseload is still more than 10 times the figure reported on Sept. 27. New York City recorded a total of 609,000 cases and 27,138 deaths as of Feb. 1.
Case numbers will be an important factor to watch as vaccine distribution continues throughout the country. Novavax and Johnson & Johnson both released Phase 3 data for their vaccine candidates, which showed 89.3%, and 66% to 85% efficacy, respectively. If approved by the FDA, there will be four vaccines available to U.S. residents, alongside those manufactured by Pfizer and Moderna. The Biden administration’s American Rescue Plan plans to subsidize COVID-19 testing and vaccination programs across the nation, but that bill has yet to be voted on in Congress.
During the week of Jan. 23, nearly 1,200 more New Yorkers filed unemployment insurance claims compared to the previous week. Approximately 26,000 New Yorkers filed for unemployment during the week of Jan 23, representing a larger year-over-year percentage increase (353%) compared to the previous week (266%).
Future unemployment claims will largely depend on how widespread potential future shutdowns are in New York City and how quickly vaccine distribution and development can occur. New York has so far administered 1.9 million doses statewide, according to the CDC. The state’s vaccination rate places it at No. 30 among the nation’s 50 states and Washington, D.C., according to VeryWell. About 7% of eligible adults have received both vaccine doses in New York.
The Biden administration proposed distributing an additional $1,400 in stimulus checks to Americans to help offset the economic burden faced by individuals across the country, as well as $400 in weekly unemployment checks through next September. However, Senate Republicans have advanced a skinnier stimulus plan that would shave the direct stimulus payments to $1,000. Biden invited the 10 senators backing the alternative plan to the White House this week for a discussion.
Home Sales Still Falling
During the week of Jan. 23, pending home sales, or homes in contract, dropped for the second consecutive week. Future weeks will show whether the decrease in sales is something permanent or just a temporary pause in the active home-buying market before it ramps up again in the spring, which is typically a busy season for real estate.
There were just 422 pending home sales during the week of Jan. 23, compared to 527 the previous week, according to data from StreetEasy. Nonetheless, pending home sales are still up 34% year-over-year, with just 265 homes in contract during the same period last year. Manhattan, Brooklyn, and Queens all saw year-over-year increases of 34%, 31%, and 35%, respectively.
The pandemic has prompted a home sales boom as individuals quickly bought homes in a rush to leave cities for suburbia. Existing-home sales in 2020 increased 22.2% year-over-year to reach the highest point in 14 years, according to the National Association of Realtors (NAR). NAR expects the strong activity to continue in 2021 as mortgage rates hover near record lows at around 3% and economic conditions hopefully improve with added stimulus and vaccine distribution.
Rental Market Sees Improvement
New York City’s rental market has seen a small improvement as apartment vacancies dropped during the week of Jan. 23. The number of rental vacancies in New York City dropped week-over-week to 37,986 during the week of Jan. 16, down from 39,213 the week prior, according to data from StreetEasy. Nonetheless, the number of available rental units is still about 50% greater than what would normally be expected for this time of year, proving that the rental market continues to be more severely impacted by the economic effects of COVID-19 than the housing market.
Under Biden’s American Rescue Plan, the continued eviction and foreclosure moratoriums, which were scheduled to end in March, would be extended through September to help Americans who are struggling to post rent and mortgage payments. As renters struggle to make monthly payments due to the economic impact of the coronavirus pandemic, apartment owners are falling behind on loan payments. The percentage of total apartment debt that banks placed into their highest-risk categories has jumped to 16.9% from 4.6%, according to market intelligence firm Trepp.
Construction Plummets in 2020
While not included in the index, the construction of new buildings in 2020 fell to its lowest total in eight years. Citywide new building filings in 2020 represented a proposed 42.67 million construction square feet, which is an approximately 28% decline compared to proposed construction square footage in 2019 and the lowest total since 2012, according to REBNY’s Q4 2020 New Building Construction Pipeline Report.
Subway Ridership Continues to Improve
Subway ridership continued to slowly improve for the second week in a row as approximately 1.4 million New York City riders used public transport during the week of Jan. 23. The rolling seven-day average was approximately 66% less than last year’s average, down from 68% less the prior week, according to data from the MTA.
The MTA said last week that it suspended the bulk of its $51 billion capital construction plan because of ongoing financial issues caused by the pandemic. Current construction projects will continue, but future ones have been put on hold until the MTA can raise more funds. Biden’s American Rescue Plan includes $20 billion for the transit industry, meant to provide relief to “the hardest hit public transit agencies” in the nation.
Restaurant Reservations See Modest Bump
Restaurant reservations increased modestly for the second week in a row. During the week of Jan. 23, the estimated number of seated diners were 87% lower than a year ago, compared to 89% lower the previous week, according to data from OpenTable. Despite the slight improvement, reservations are still near the lows of late-March and early-April, in large part due to Gov. Andrew Cuomo’s Dec. 14 restriction on indoor dining. In mid-January, Cuomo lifted some indoor dining restrictions in other parts of the state, but not in New York City due to the population density of the area. Future reservations in the city will depend largely on a decline in COVID-19 cases and warmer weather as outdoor dining and takeout continue to be the only options for restaurants.