Editor's note: Below you'll find the week 22 release of the NYC Recovery Index, originally published Jan. 5, 2021. Visit the NYC Recovery index homepage for the latest data.
New York City’s economic recovery took a turn for the better during the week of Dec. 26 as home sales increased, subway ridership improved, and rental vacancies declined. However, COVID-19 hospitalizations continued to climb as a new strain first detected in the U.K. arrived in New York. Moreover, restaurant reservations are still suffering, while unemployment claims are still high.
New York City’s recovery stands at 53.1 out of a total score of 100, according to the New York City Recovery Index, a joint project between Investopedia and NY1. The index increased 3.7 points from the prior week (6.8 points from the previously reported week of Dec. 12). Nearly 10 months into the pandemic, New York City’s economic recovery is only a little more than halfway back to early March 2020 levels. While there were spurts of economic strength in the spring and late summer, the city’s recovery has effectively been stagnant since September.
COVID-19 Hospitalizations Still Rising
The number of New York City hospitalizations continued to rise during the week of Dec. 25, with an average of 250 hospitalizations per day, up from 207 average daily hospitalizations the previously reported week. This was the highest weekly average recorded since April 25, and four-times the rate in early November, as colder weather and relaxed social distancing practices during the holiday season brought a new wave of COVID-19 cases across the country. New York City recorded a total of 451,000 cases and 25,284 deaths as of Jan. 4.
The rising case numbers came as a new variant of COVID-19 was identified in the U.K. last month. The new coronavirus strain has been detected in New York in early January and Gov. Andrew Cuomo said the variant "could be a game changer" and is "highly problematic." Last month, Mayor Bill De Blasio said on Dec. 23 all travelers from the U.K. must quarantine when entering NYC or face a $1,000 fine.
Case number trends will be an important factor to watch as vaccine rollouts hit the country. Cuomo and De Blasio have already faced criticism for the slow vaccine distribution as the virus surges. So far 934,925 vaccines have been distributed in New York, though only 299,428 people have been inoculated with the first dose.
Unemployment Claims Begin to Decline
Unemployment insurance claims, while still high, have slightly decreased throughout the holiday break. During the week of Dec. 26, there was a significantly smaller year-over-year percentage increase (262%) in unemployment insurance claims compared to the week of Dec. 12 (433%).
The number of future unemployment claims largely hinges on how long and widespread potential future shutdowns in NYC could last. Cuomo previously warned that a January economic shutdown of nonessential businesses is possible as COVID-19 cases soared to springtime records.
Home Sales Remain a Bright Spot
Pending home sales, or homes in contract, continued to increase during the week of Dec. 26 and are up over 60% compared to the same period last year. Across New York City, 339 homes went into contract during the week of Dec. 26, compared to 207 during the same point in 2019, according to data from StreetEasy. Manhattan, Queens, and Brooklyn all saw year-over-year increases of 63%, 75%, and 38%, respectively.
Rental Market Stabilizes
New York City’s rental market continues to be noticeably more impacted by the economic effects of COVID-19 than its housing market, speaking to the k-shaped recovery of the city. Homeowners and home buyers with good credit have been enjoying a buying and selling bonanza while lower income residents have had to drop or not renew leases they can no longer afford. However, over recent weeks there has been a stabilization in the number of vacant apartments available for rent. There were approximately 36,000 rental units available in New York City as of the week of Dec. 26, down from nearly 42,000 during the week of Dec. 12 and just 1.2-times the amount during the same week last year, according to data from StreetEasy.
While the high number indicates that more people have left New York City than have moved into the city since COVID-19 hit, it also provides hope that the rental market will stabilize and recover. As New York City continues to recover from the COVID-19 pandemic, the rental market will be worth watching to see if there is an influx of people who return to the city in summer 2021 to counterbalance the hundreds of thousands of departures in 2020.
Subway Ridership Improves
Subway ridership saw a bump during the week of Dec. 26 as the rolling seven-day average sat at less than 66% of last year’s average, up from less than 70% of the average during the week of Dec. 12. The MTA estimates a rolling seven-day average of just over 1.25 million riders for the week of Dec. 26, which is usually a slower week due to Christmas.
Restaurants Continue to Struggle
Restaurant reservations fell drastically during the week of Dec. 26 as the estimated number of seated diners remained down 92% compared to last year, according to data from OpenTable. The number of reservations are trending even lower than the already decreased holiday season numbers from 2019, and the negative trend accelerated further with Cuomo’s Dec. 14 restriction on indoor dining. Several restaurants have sued the state over those dining restrictions, citing the fact that only 1.43% of transmitted COVID-19 cases came from restaurants.
Continued spikes in COVID-19 and the cold weather have also hampered gains in reservations. At this point, reservation declines have bottomed out and future gains will largely depend on state regulations and consumer comfort vis-a-vis the COVID-19 vaccine.
Over 1,000 NYC restaurants have closed since late March, costing tens of thousands of workers their jobs. The restaurant industry was not included in the latest $900 billion stimulus plan signed by President Trump, which may threaten the survivability of hundreds more restaurants.