With the election finally settled and vaccination beginning, it is worth considering what the spring real estate market will bring.
Let’s start by noting that contract activity in the city has been up (especially in Brooklyn), while it appears the suburban frenzy has passed.
After the initial flight to suburbia, people have begun to realize that there is real value in, within a 15 minute walking radius of one’s apartment, having high end foodstuffs, outdoor recreation (on the Hudson or East Rivers, Central or Prospect Parks), and access to COVID-19 testing. More generally, it is only in the density of an urban environment that one can accomplish living, working, shopping, self-care, education and self-actualization without getting in a car. This issue of proximity becomes important as people are increasingly working from home.
These issues are going to continue to drive interest in the purchases of New York City apartments, particularly in Brooklyn and (to a lesser extent) Queens, where the quality of life is high, and more space is available for the same amount of money.
The Manhattan real estate market experienced a strong rebound at the end of 2020. After the significant falloff due to the COVID-19 shut down from March to June, transaction activity experienced a significant rebound. This is a bullish sign for 2021 and could signal the bottom of the market.
(https://www.youtube.com/watch?v=JUOTOOxVHbc&feature=youtu.be)
Active supply in Manhattan peaked at the end of October 2020 at about 9,600 and ended the year at 7,447. Pending supply was up as buyers were transacting. Deal volume is currently being driven by local buyers in the below $2 million price range. Buyers currently have much for negotiability and choice in Manhattan as compared to the suburbs and New York City outer boroughs. As compared to the financial crisis of 2008 and the market peak of 2015, the Manhattan market is showing definite signs of having bottomed and recovering.
(https://www.youtube.com/watch?v=rJHrd0hSAUs)
Listing discounts also moderated and remained in the below 10% range.
(https://www.youtube.com/watch?v=JUOTOOxVHbc&feature=youtu.be)
The normal year end supply and new active listings slowed as usual during the last half of December. New supply is beginning to hit the Manhattan market with the big pick up expected in the 2nd and 3rd weeks of January.
A driver of the real estate market is shockingly low interest rates that show no signs of spiking significantly for a while:
The rental market is another matter:
The rental market has suffered an unprecedented drop as those industries particularly hurt by the pandemic (hospitality, restaurants, theater, etc.) were heavily weighted towards renters. This softness is projected to last for some years.
There is a lot going on. As always, please call us with any questions you may have.
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