The NYC Real Estate Market - 2020 and Beyond
This has been a year like no other. Covid-19 has affected the world and consequently the NYC real estate market more deeply than any other event or time in history. The predictably strong spring/summer seasons were anything but with droves of people flocking to the suburbs and outer boroughs for more space and fewer people.
What is clear, for now, is that in many parts of the city, for the first time in at least a decade, it’s a buyer’s and renter’s market.
Sales Market Snapshot
While 220 Central Park South seemed to be immune to the pandemic with multiple 50MM+ sales closing this year, the rest of the market couldn’t escape its claws. The year began with sales prices off by 10-20% compared to the highs of 2018. Covid added another 10-20% resulting in discounts from 20-40% from just 2-3 years ago. Historically, the second and third quarters bring the most activity in NYC and just as we were approaching this robust stretch, Covid derailed it. With in-person showings suspended until late June, the market seized though has since seen signs of life driven by opportunists and the many that believe in NYC long-term.
OVERALL NYC MARKET
Overall, sale prices are relatively steady.
Sales volume is picking back up. It now sits at about 50% of last year's figures.
MANHATTAN
Sales above $1 million, which constitute the majority of deals, are rebounding after a precipitous drop.
BROOKLYN
Sales volume remains depressed, however.
QUEENS
Home sales have flattened in recent months.
Rental Market Snapshot
The rental market is generally strongest from April to September, led by young professionals moving from campus to the big city after graduation. With most companies asserting a hiring freeze, the impact of this group was largely non-existent resulting in a lackluster spring/summer rental season.
With the above segment usually having found their homes by September, the fall and winter markets experience a gradual slowing from one month to the next. 2020 was a different story. The market slowed at a remarkable weekly rate and while doing so, inventory climbed to record numbers forcing landlords to offer unprecedented concessions. For example, some landlords are offering five months free on 12 month leases, others are locking in longer leases of 18 and 24 months with additional concessions, while others don’t want to offer a bridge that far into the future. Interestingly, October, November and December have been our best months as a brokerage as we’ve gotten ahead of the market by offering the necessary incentives to beat the competition.
What Lies Ahead
Owners that want or need to transact over the winter will likely have to increase incentives and/or lower pricing even more. Fortunately, with the vaccine on its way, interest rates at an all-time low, and a new president in office, there will be a renewed sense of optimism. Companies will resume hiring and people will return to the city, leading to an economic boom, much akin to post-wartime and other times of devastation.