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Monthly Investment and Residential Sales Report: Snapshot of December 2020
January 22, 2021
The Real Estate Board of New York (REBNY) has tracked transaction activity as well as the tax revenue generated by real estate transactions on a monthly basis since March 7, when Governor Cuomo announced a state of emergency in New York due to the Coronavirus (COVID-19) crisis. REBNY has increased the frequency of its reporting in an attempt to understand the impact of the crisis not only on the industry but also on the City and State budgets. Beginning November 2020, REBNY began incorporating City and State collected mortgage recording tax in the total tax revenue values; historical data has been revised based on this newly available information.
From November to December 2020, REBNY reports a decline in transaction activity for investment sales and an increase for residential sales. Total investment and residential transactions increased 8% from the same time last year and increased 2% from November to December 2020. Total investment and residential sales volume, or consideration, declined 18% year-over-year and declined 32% month-to-month. The total tax revenue generated from these sales to the City and State declined 12% from December 2019 to December 2020 and declined 36% from November 2020 to December 2020.
Investment sales and residential sales year-to-date totaled $47.1 billion, a 46% decline compared to the same time period in 2019. Year-to-date investment sales and residential transactions totaled 28,187, representing a 39% decline from 2019.
Declines in both total transactions and sales volume resulted in a 36% decline in tax revenue. This resulted in New York City and New York State combined experiencing a $1.6 billion loss in tax revenue.
Tax revenue contributes to NYC’s essential services, such as salaries for first responders, building service workers, MTA employees, the maintenance of public parks, and vital repairs and maintenance of the public transportation system. Last year, real estate taxes generated $31.9 billion for the City’s operating budget, accounting for 53% of NYC’s total tax revenue, more than double the next closest contributor – personal income tax at 21%. The health of the real estate industry is critical to the health of both our City and State.