As New York City enters into the first phases of reopening, we are optimistic about where the real estate market stands. The very first number to look at in the recovery is active listings brought to market. This number is hefty which is a good thing. For example, the week ending July 10th versus the week ending July 3rd, new listings entering the market were up 40%. We like seeing this. Why? Because new listings coming to market is the critical first step in this recovery.
A solid real estate resource is UrbanDigs.com. As shown in the chart below, supply has increased materially month over month across all price points.
(Source: Urban Digs)
Now that new listings are coming to market, the next steps are the buyers come out to see the apartments, the feedback goes to the seller, the negotiation starts, the due diligence gets completed and then the deal gets signed. By the end of July, we will be able to report in real time just how many new contracts have been signed.
One thing that gives us comfort is that the Manhattan market has historically experienced limited volatility during difficult times. Per the chart below post-financial crisis in 2008 to 2010, prices did decline but did not fall off a cliff. No doubt, the current situation is difference and it will take some time to know how the real estate market will be affected. However, as the past demonstrates, we believe the Manhattan market will maintain its attraction over the long haul.
(Source: Urban Digs)
A big question everyone is asking is what is happening to real estate prices? The answer in New York City is that it is too early to tell. Another interesting UrbanDigs chart that was discussed on their last market update is the Listing Discount by Deal per Month. Note that there is a time lag between contract signs and closings. However, you can see that so few closings have occurred due to the Coronavirus shutdown, it is too early to tell what is happening to prices.
If you are contemplating a real estate transaction, you will have questions. We will answer each and every one. Email or call us anytime.