New York is the next Detroit

New York City commercial real estate deals have hit a brick wall as the pandemic continues to roil the local economy. According to the Real Estate Board of New York, investment sales dropped by a 32% drop in transaction volume and a 54% plunge in total consideration compared to the first half of 2019, and a record low since the Real Estate Board of New York began reporting the data. Apartment buildings suffered the biggest drops in prices, at 50% on average. Offices and hotels saw decreases of 28% and 37%, respectively. Cuomo and DiBlasio have stuck the knife so deep into New York it may never recover. Demographics mean the next mayor will be worse than DiBlasio, as hard as that is to believe. Detroit is going to look like a paradise compared to New York if something doesn't change soon. Why does anyone want to live in the largest concrete jungle in the world, where everything is closed, and there's nothing to do. And the risk of turning a corner only to encounter a violent mob, with no police presence to protect you. Once out of that dump, people will not go back. New York will become another Detroit within 15 years. City services are terrible. Violence and safety are notably worse. The NYPD is becoming toothless lions because of the administration. Education and all city services are quickly becoming desperate. Once Wall Street becomes totally computerized, and the money is gone. Say goodbye to the greatest city in the World. The Pandemic is only part of the problem. The other half is soaring crime, rioting & arson. No working-class person wants to put up with angry mobs and soaring taxes. New York already had an Exodus problem prior to the Pandemic. It just speeds it up a great deal. Move over Detroit and Baltimore, New York is going to join you! 

https://financearmageddon.blogspot.com/2020/09/nyc-real-estate-market-crash-retail.html

It takes a long time for a great city to decline.  Detroit was a great city once.  It was the 5th largest city in the country in 1950 - New York, Chicago, Philadelphia, Los Angeles and Detroit.  It had beautiful skyscrapers, most of which are now abandoned.  It had the country's second largest department store - Hudson's (after Macy's in NYC).  The decline of Detroit happened in the 1950s, and it has probably bottomed out now, so it took 70 years for it to decline.

New York is a great city, but it is on the decline.  It will take a very long time for it to fall.  Part of the decline is permanent vacancies.  There are buildings in New York that will never recover from the current crisis.  They will be foreclosed on and abandoned, not worth paying property taxes and insurance on.  And once buildings start to be abandoned, the rot spreads.  Why pay a premium for space when the building next door is abandoned - theoretically, you could just move to the vacant building.  Once real estate is not profitable it won't be maintained properly, and then it just takes a few years for it to be blighted.  The city could manage this aggressively by tearing down blighted buildings but it probably won't because of nostalgia and cost.  Skyscrapers are very well designed and can exist for hundreds of years even in blighted form.  But that is what the future of New York holds - lots of abandoned, blighted skyscrapers, and lots of poor desperate people.  And it is all DiBlasio's fault. 

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See https://www.newyorker.com/business/currency/why-are-there-so-many-shuttered-storefronts-in-the-west-village 

Abandoned storefronts have long been a hallmark of economic depression and high crime rates, but the West Village doesn’t have either of those. Instead, what it has are extremely high commercial rents, which cause an effect that is not dissimilar. “High-rent blight” happens when rising property values, usually understood as a sign of prosperity, start to inflict damage on the city economics. Compounding the problem is the fact that the closed storefronts often stay that way, sometimes for years, in an apparent contradiction of the law of supply and demand. If a storefront remains empty for a long time (like this restaurant, which has been shuttered for more than six years), basic economics suggest that the price being charged is too high.