Manhattan’s residential real estate market is showing positive signs of recovery. While it was normal over the Summer and Fall of 2020 to apply a “COVID discount” of 6-8% on the majority of inventory I’m starting to see challenges to those pricing assumptions for certain apartments. This is especially the case for homes ranging from $500,000-$3,000,000 in the resale market where local New Yorkers are purchasing primary residences.
Interestingly the seasonality of the market has shifted. 2020’s busy Spring season was entirely shut down which delayed many would-be-buyers’ searches. When the health crisis in New York subsided many folks still took a ‘wait-and-see’ approach on the economy before recommitting to a move. With perspective on these matters in hand this winter – ordinarily a quiet time for residential sales in Manhattan – there has been a tremendous surge in activity with contracts up 38% year-over-year for the month of January. I’m seeing clients with their worst fears allayed coming into focus with updated living needs whether it be more space for a proper work-from-home setup or amenities like an in-building Peloton. Coupled with record low mortgage rates and a booming stock market there’s the confidence and demand to secure value in a real estate deal. Consequently prices seem to be inching up from what may have been a recent bottom in December 2020.
While in-contract activity is vastly higher relative to 2020 we’ve also been seeing a downtick in supply – another indicator that prices are on the mend. My expectation is that we’ll adjust back to a strong Spring selling season with increased inventory – especially amongst those who have been waiting for a closer return to normalcy before selling. Sellers will have a lot more in their favor relative to six months ago: Distribution of a vaccine is well underway and there’s increased comfort with this new normal. Benefitting New York is a shift in the federal government with a Democratically elected President and Congress and the possibility of $1.9 trillion in additional stimulus. One segment of that is $350bn which would be dedicated towards plugging budgetary gaps for state and local governments. With New York State facing a $29bn deficit through the end of 2022 this is encouraging news and would reduce the likelihood of a steep increase in taxes coupled with a cut in state and municipal services.
If you have questions about the market or where we’re heading this Spring please feel free to touch base anytime. Would love to help.
The Roebling Group