Editor's note: Below you'll find the week 25 release of the NYC Recovery Index, originally published Jan. 25, 2021. Visit the NYC Recovery index homepage for the latest data.
New York City’s economic recovery continued to falter during the week of Jan. 16 as home sales declined and COVID-19 hospitalizations increased. However, despite the overall dip, some index measures, including restaurant reservations and subway ridership, witnessed modest gains week-over-week.
New York City’s recovery stands at 47 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 2.9 points from the prior week, dipping below the halfway mark for the first time since mid-December. Ten months into the pandemic, New York City’s economic recovery remains less than halfway back to early March 2020 levels.
COVID-19 Hospitalizations Still Rising
The number of New York City hospitalizations continued to rise during the week of Jan. 16, with an average of 363 hospitalizations per day, up from nearly 300 average daily hospitalizations the previous week. This seven-day average is the highest it’s been since April 30 and is 10-times higher than the rate recorded on Sept. 28. The high caseload comes as colder weather and relaxed social distancing practices brought a new wave of COVID-19 cases to the U.S. New York City recorded a total of 570,000 cases and 26,558 deaths as of Jan. 25. Queens county recorded the fourth-highest number of COVID-19 deaths reported nationwide, while the Bronx reported the sixth highest number of fatalities.
Case numbers will be an important factor to watch as vaccine distribution continues throughout the country. Gov. Andrew Cuomo and Mayor Bill De Blasio have faced criticism for the slow vaccine distribution in New York as the virus surges. So far, nearly 1.4 million doses have been administered in New York State. Cuomo previously criticized the Trump administration for failing to deliver enough vaccines to New York, and sent a letter to Pfizer asking to bypass the federal government and directly purchase COVID-19 vaccines for New York. New York City is expected to receive another 100,000 new doses of the COVID-19 vaccine Tuesday, but that is only a fraction of what is needed, officials said. 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.
Unemployment Claims Dip Slightly
During the week of Jan. 16, New Yorkers filed fewer unemployment insurance claims compared to the previous week. However, 31,926 people still issued claims, representing a 266% increase from the same week a year ago.
New York reported on Jan. 21 that the state’s unemployment rate dropped for the fifth consecutive month in December to 8.2%, from 8.4% in November. The unemployment rate in New York City dropped to 11.4% in December from 12.1% in November. Nonetheless, the current rate is still significantly higher than Dec. 2019’s 3.9%. The leisure & hospitality sector has been the most affected, with a loss of 366,600 jobs year-over-year. In total, New York City lost 578,000 jobs in 2020, with most of those job losses occurring between April and December.
Future unemployment claims in New York will largely depend on how widespread potential business shutdowns are in the area and how quickly vaccine distribution and development can be rolled out. 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.
Home Sales Start to Slip
During the week of Jan. 16, pending home sales, or homes in contract, dropped for the first time since Nov. 28. The decrease in sales could be 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.
Nonetheless, pending home sales are still up 44% year-over-year, with 527 homes in contract during the week of Jan. 16, compared to 265 during the same period last year, according to data from StreetEasy. Manhattan, Brooklyn, and Queens all saw year-over-year increases of 70%, 28%, and 18%, respectively.
While residential sales have increased year-over-year in 2020, total transaction activity for investment sales has declined, according to the Real Estate Board of New York. This has contributed to a 36% decline in the tax revenue collected by New York City to $2.7 billion, from $4.3 billion the year prior.
Rental Vacancies Hold Steady
New York City’s rental market continues to be more severely impacted by the economic effects of COVID-19 than the housing market. The number of rental vacancies in New York City slightly increased week-over-week to 39,213 during the week of Jan. 16, according to data from StreetEasy, keeping the number of available rental units to be about 50% greater than what would normally be expected for this time of year.
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. About 18% of renters nationwide said they are not caught up on their rent payments at the end of December, while nearly 14% of them said they have no confidence in their ability to make next month’s payment, according to the U.S. Census Bureau.
Subway Ridership Improves
Subway ridership reversed course and witnessed a small bump during the week of Jan. 16, as the rolling seven-day average was approximately 68% less than last year’s average, down from 70% less the prior week, according to data from the MTA.
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 Slightly Increase
Restaurant reservations increased modestly during the week of Jan. 16 as the estimated number of seated diners were 89% lower than a year ago, compared to 91% lower the week prior, 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. Cuomo’s Dec. 14 restriction on indoor dining. Cuomo said today that he would consider lifting some indoor dining restrictions in other parts of the state, but he is not ready to include New York City in those plans.
Future reservations will depend largely on a decline in COVID-19 cases and warmer weather. The restaurant industry is depending on the federal government to provide assistance before normal capacity can resume. The Biden administration allocated $440 billion of his American Rescue Plan to communities, including grants and loans for small businesses.