Consider this blog entry a Sneak Peek before next month's Third Quarter market statistics are officially released. Doesn't everyone want insider tips on yet-to-be released market information?.
First - a quick look at where we've been. Residential real estate agents in NYC eagerly anticipated a few milestones over these past months: 1. June 22, when we began Phase 2 and started showing homes again. 2. Sept 9, Labor Day, when NYers returned from COVID escapes and summer vacations to begin school and working from their offices. Both of these milestones resulted in changes to our market.
As I reported previously, buyer interest is way up since the end of June. Even with restrictive, new showing protocols, we experienced more calls, showings, offers and signed contracts.
In the week since Labor Day, we witnessed more traffic of all types in NYC - pedestrian, mass transit as well as real estate web traffic and buyer inquiries. UrbanDigs.com reported that: - active listings in Manhattan increased by approximately 3% during the week after Labor Day to 8,521. - pending sales increased, also by 3%, to 1,557 - there were 560 new listings. This is up, as we always expect for the week after Labor Day. - There were 135 newly signed contracts. This too is up from August, as expected. These numbers all signify a "normalizing" of our residential real estate market. For those sellers who have been unable to sell and are considering a price reduction, UrbanDigs reports that the median price reduction over the past month is 6-8%. A 2-3% reduction will not cut it in today's market. The rental market is over-saturated with product at all price points. UrbanDigs.com reports that inventory of available studio rentals is up 200%, and 1, 2 and 3 bedrooms are each up 100%. Because of the incentives being offered (multiple months of free rent, ie), it is impossible to tell with certainty the percentage decline in rental values. However, we believe that the rental market is down by approximately 20% overall. I expect that the sale and rental market will both experience a period of price discovery during the next four to six months. I anticipate volatility reflecting uncertainty over the spread or containment of COVID-19, the status of a vaccine, school and office re-openings, local unemployment and business failures, the perceived safety of our city, the local and national economies, the condition of mass transit, homelessness and the upcoming presidential election. These issues combine to create serious consumer anxiety, and when consumers are anxious, they typically hold back on large purchases, like homes. Because we've sheltered-in-place for months and may be quarantined again, and because we recognize the inadequacies of our current homes, I suspect things may be different for today's housing market, even in these times of uncertainty. Regardless of your particular situation, hold on to your hats, friends; we're in for quite a ride! Whether you're a buyer, seller, landlord or tenant, currently or in the future, you need to fully understand the nuances of our unique and evolving marketplace and how they affect you personally.
Be in touch; let's chat!