Q4 2021 Market Overview and Outlook for 2022
2021 was marked by a frenzied pace of deal volume. The market had not seen this level of volume since 2013. Notwithstanding the volume of sales, prices have just recovered to pre-pandemic levels.
Time on market declined in the fourth quarter as buyers only needed 67 days to sign a contract. This compares to the high of 116 days in June 2020. The drop in available apartment inventory has pushed buyers to act especially at the higher prices fueling the entire market.
Driven by buyers’ momentum demonstrated by declining days on market, well priced units sold close to ask as sellers were able to keep 96.2% of their listing price. The dynamic between days on market and discount to list price shows the strength of the 2021 market. If a property remained on the market for longer than average, this is one of the indicators that it was priced incorrectly.
For more details, please see the Keller Williams 4Q2021 Manhattan Market Report.
Outlook for 2022
Strong deal volume is expected to continue into 2022 even though New York City is currently experiencing the latest COVID-19 wave with the Omicron variant.
Inventories are at historic lows ahead of the spring market getting underway. Supply normally declines at year-end although 2021 was particularly acute. The market is standing by waiting for listings to hit.
The stock market’s performance was very strong in 2021. The Dow Jones Industrial Average is currently up over 16% and the S&P 500 is up over 22%. This increase in wealth and assets will drive buyer appetite for real estate as it historically has done. Although market volatility is expected in 2022, the outlook for the overall markets is quite positive.
Even though interest rates are rising, they are still at historic lows. Buyers will be incentivized to act to take advantage of rates while they are still in the 3% range.
As noted above, price increases have been relatively modest to date. However, the strong demand with low inventory could drive a competitive market with price increases and fast turnaround times.
Wishing you a happy and prosperous New Year. As we approach the Year of the Tiger, according to the Chinese calendar, we wish you energy and enthusiasm for the big changes that are ahead!
As always, we are here to assist you with all your real estate needs. Please don’t hesitate to call us or email anytime.
Here’s to a fabulous 2022!
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