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Schools are back, so does real estate follow? This is one question an article below tries to address.
Interesting question indeed. What are the facts? By May of this year many sellers had removed their properties from the marketplace and overall inventory had fallen to nearly 5,000. Since then, accelerated by the re-opening of in-person showings in late June, the number has inflated to 8,000, which is a bit over a 20% increase from last year at this time (what we might consider a more normal level). Consequently, this downward pressure on pricing is bringing some buyers back. Whereas sales volume had been off approximately 85% earlier in the pandemic period, contract activity has been spiking. According to data from UrbanDigs the past 7 days has seen 176 new contracts signed; last year that number for the same seven day period was 199. So when you consider that contracts signed were less than 40 in May, the market is making a turn. Buyers who have been keen to buy are getting in. The numbers are still moderate, but the bottom of slide is likely behind us.
Pricing, on the other hand, has a bit more discovery to be revealed. Many deals consummated during the pandemic, which have yet to be recorded, will provide us with the true effect of the Covid crisis on our marketplace. Once those discounts become known, pricing will adjust in order to keep the marketplace transacting. However, as people get increasingly comfortable with this crisis and how to maneuver within it, more and more people will be coming back into the fold. This demand will eventually moderate the severity of the potential declines. This Fall could be an extraordinary buying opportunity, as pricing should be “low-ish” and demand moderate. These opportunities are further enhanced as long as the low interest rate climate persists. Interest rates are rock bottom and purchasing power is strong (see Purchasing Power analysis below). Interestingly for those looking to upgrade, the higher you go up the pricing scale the softer it becomes.
Conversely, I believe that Spring/Summer 2021 will be a frenzy. Assuming we have made progress on a vaccine and the systems to manage the virus have been drastically improved, most who have defected from the city will be itching to get back and the resulting competition will be palpable. Everyone will be scrambling to get situated prior to the 2021 Fall school semester. Without question, as always, those who plan and act early will get the best deals.
Buyers will determine the market’s next move. Chart below is courtesy of UrbanDigs.
Always Here For You
If you are inclined to dive in, are you prepared? You should always know what you are in a position to buy or sell at all times. If you don’t know, reacquaint yourself with the marketplace. What is your property worth? What can you afford to buy? Anyone interested in buying or selling, should be rolling up their sleeves to determine whether the time is right to sell or if there’s a home or investment property out there for them.
If you are indeed exploring whether buying or selling is the right time for you, do not hesitate to reach out to me, as I am here to help. Your best investment is often in the broker you choose. With Manhattan’s palpable level of competitiveness, my clients have considered me their hidden-hand. My experience affords me the expertise to pull back the curtain and reveal the circumstances as they are and the possibilities that exist.
[Editor’s note: we initially posted an outdated article in this space. It has been fixed.]
Roberto Cabrera
Licensed Real Estate Broker
Brown Harris Stevens
212.906.0554
Your City, Your Broker…
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