Our last blog was chock full of advice for New York City real estate buyers. Now, it’s the seller’s turn. Consider this: the Manhattan real estate market is being driven by the declining inventory picture. Full stop. Inventory peaked in the 10,000-unit range at the end of October 2020 and has been declining ever since to roughly 7,000 units today. As fast as new inventory enters the market, contracts are being written to more than offset the increase.
For those who have been figuratively jumping up and down on the corpse of New York City, the above chart paints a very different picture. There have been two articles recently that have called that premise very much into question. The first is “Wall Street elites who fled to Florida amid COVID-19 want to return to NYC”, which you can read here in the NY Post.
Let’s unpack what you need to know:
- “New York has the smartest, most driven people, the best culture, the best restaurants and the best theaters,” the Manhattan resident of more than two decades admitted to the outlet. – NY Post
- “The main problem with moving to Florida is that you have to live in Florida,” Jason Mudrick, the founder of Mudrick Capital Management, told Bloomberg. – NY Post
- Despite the narrative that Northeasterners are fleeing en masse to Florida, the state’s Demographic Estimating Conference found only a “very slight” increase in migration from the Northeast since the pandemic started, according to Stefan Rayer, of the University of Florida’s Bureau of Economic and Business Research. “It’s not really moving the needle,” he said. -WSJ
- Far less discussed, however, is the fact that each year nearly as many people move out of Florida as move in. They are fleeing hurricanes, heat and escalating home prices. While Covid-19 has prompted some out-of-staters to buy homes in Florida, the state’s population growth has slowed in the pandemic to its lowest rate since 2014, according to the state’s November 2020 Demographic Estimating Conference. -WSJ
Our job as professional real estate agents is to analyze the market and not get swept up in hyperbole and trendy talk – for our client’s sakes. Here’s what’s really going on:
The idea that “everyone is moving out of NY” is a gross overgeneralization. True, many people have moved out – temporarily. Even those who thought Miami was a permanent move are contemplating coming back, and many will.
The assets of New York City are undeniable – and un-replicable. There will not be a city in the United States that can compete for: culture, food, fashion, finance, technology (yes, we have a bigger tech sector than Silicon Valley), publishing, public relations, consulting, legal work, and talent. Ultimately these issues, collectively, create a center of gravity that will drive real estate asset prices as they have since the city’s inception.
This is further supported by the UrbanDigs market pulse (pending sales to active sales ratio):
As with the inventory peak in October 2020, the market pulse also demonstrates that the buyers market has been moving into neutral territory since August/September of 2020.
The declining negotiability of prices also supports this view. In conclusion, Manhattan was never a fire sale in 2020 and never came close to experiencing the price declines of the Financial Crisis in 2008/2009 as the chart below clearly demonstrates
We are in the spring market and we are boots on the ground every single day. The traffic is great and only getting better. If you want to sell your apartment and you are reasonable about its value, now is your time to hit the market.
As always, if you have any questions feel free to reach out to us any time!
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