Real Estate professionals are on the front line to guide you. We are sifting through the data available and making projections. All information points to NYC being a buying opportunity. While a lot needs to be sorted out regarding workplaces, schools, restaurants and all the businesses that COVID-19 affected, this fact remains: the pandemic does have an expiration date. There will be a vaccine.
Notwithstanding all of the uncertainty in today’s world, NYC will survive and in all likelihood thrive. Given the rising inventory and low interest rates, negotiability power belongs to the buyer. For how long is the question.
Let’s dive into the details!
Supply continues to trend upwards off of the COVID-19 lows from March to June 2020. Supply as of September 11th stands at 8,521 units. Note the high during the Great Financial Crisis of 2007/2008 was 9600 units. Post Labor Day after the August holidays, New York City typically experiences a supply bump of inventory as we enter the Fall Market.
The residential real estate market is segmented. Currently, the bulk of activity is happening at the under $2 million price point. We are experiencing discounts between 5-7% in this segment. As price points climb, specifically above $3 million, the opportunity for more negotiability increases.
Weekly Contracts Signed continue to be above the COVID-19 lows. As a reminder, September 11th was a shortened/Labor Day holiday week. Contracts Signed will be a key data point to watch over the next 4 weeks to judge if buyers are transacting.
Shifting Lanes to the Rental Market:
COVID-19 acted as an accelerant for people to move out of New York City. But, you must remember that NYC is a transient city.
Those that moved out of the city at the height of the pandemic, were likely going to move over the 1-3 years anyway. The pandemic simply moved their timeline up.
Rental listings jumped to a record 15,025 at the end of August, more than double the inventory from a year earlier, according to a report Thursday by appraiser Miller Samuel Inc. The borough’s vacancy rate reached a new high of 5.1%. Last August, it was under 2%.
To attract tenants, Manhattan landlords offered concessions such as free months or payment of brokers’ fees in 54% of newly signed leases — a record share in nearly 10 years of data, the firm said. With the value of those sweeteners factored in, rents fell 7.7% to a median of $3,161.
The borough’s inventory may be even higher when considering how many renters are trying to sublease their units. Across the city, the number of tenants seeking people to take over their existing lease jumped 158% in August from a year earlier, according to a study by RentHop.
As always, if you have any questions, feel free to contact us anytime!