New York buyers are feeling shocked to discover that half the properties they saw last week have accepted offers. Sellers, equally surprised but more pleasantly so, are discovering that the first offer they receive may well be followed by a second one. While this phenomenon is particularly true in the market for properties costing $2 million or less, New York City agents are seeing signs of it throughout our marketplace. Stability, long postponed by the terrible early months of the pandemic and the flight from town by many potential buyers, arrives in our market at last.
The New York market began to see early signs of improvement in late fall/early winter of last year. The months of lockdown, and all the reporting about local families leaving town, pushed many sellers towards an acknowledgment of the new 2020 realities. They reluctantly understood that, if they were to sell their properties, their prices needed to be adjusted. As that was happening, buyers were, for a variety of reasons, becoming more active in their home searches. For some, committed New Yorkers that they were, the later months of 2020 offered the opportunity to trade up to a better space for a less daunting price. For some, proximity to schools and/or jobs became paramount. For others, staying at home for so long forced a realization that home was not all they might want it to be going forward. Everyone wants a home office now. Many people want outdoor space. A different world refocuses everyone’s priorities.
Even as the market for one and two-bedroom apartments began to heat up, deals also began to blossom for more expensive properties. Especially in the condominium market below 42nd Street, penthouses and large units have been going into contract at substantially discounted prices. Numerous deals have been struck for these showpiece apartments, many of which have been available for one, two, even three years at enormous prices. Developers, many of whom face moments of reckoning with their lenders or simply want to stop the bleeding, have been going into contract and making strong deals for buyers with renovation allowances, payment of closing costs, and other enticements.
Sooner or later, markets find an equilibrium. That is taking place, long after the rest of the country, in Manhattan today. In Brooklyn, the market never slowed quite as much and picked up more quickly. 2021 has brought optimism to the New York market for the first time in years. As sellers adjust prices to acknowledge the COVID realities, buyers feel the hope engendered by a new President (Donald Trump was never a popular guy in his hometown) and a vaccine that promises a return to some kind of normalcy during this calendar year. Sales inventory is shrinking in the city; from a mid-October peak of around 9,500 units to fewer than 7,500 during the week which ended Friday, January 22 (courtesy of UrbanDigs).There is thus a sense that, looking forward, this moment can offer real estate opportunities that already threaten to become more elusive.
The pandemic disrupted but did not derail the larger meta-cycle of New York’s residential real estate flow. At this time last year, we had a busy market as buyer and seller expectations came into alignment. The pandemic misaligned those expectations for a while but now, a year later, we are once again at a moment of equilibrium in which deal flow is accelerating across New York City. Assuming the vaccine rollout continues (and hopefully becomes more organized) and stimulus dollars arrive to help our public transport system and our small businesses, optimism is palpable even as we all don double masks. For the New York City residential market, the stars look auspicious.
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