Denver Houses for Sale The housing market has cooled in…
New York Real Estate Market
New York is one of the largest residential housing markets in the US and could contribute tremendously to America’s GDP, with the right leadership.
The Corona Virus caught Governor Cuomo off guard and unprepared. Now New York is enduring the painful role of being the US epicenter of what may be one of the worst pandemics in US history. The harder the NY government cracks down on virus transmission the greater harm to the NY economy and housing market.
However, New York will get through this epidemic, perhaps at great financial cost. How the Corona virus will affect real estate? The New York housing market and NYC housing market will return.
Below is a historical chart which shows the jump in new listings in New York the last two months along with the big increases in home prices in New York. New York was enjoying one of the better market forecasts before Covid 19 landed. I hope the people of New York including my old clients are healthy and well.
Great Start to 2020
The last 2 months have seen strong sales and home prices and now very low availability and affordability for New York home buyers. But now in March, it’s all in the rear view mirror as NY wakes up to a potential devastated economy with layoffs and crushed GDP.
It should be said that many were trying to undermine the economy and resist the back to America movement. However, the strength of the American spirit is what will save the US stock markets and New York housing market.
After the pandemic is over, the shortage will once again put intense pressure on home prices and apartment rent prices in Manhattan, Queens, Manhattan, Long Island and the Bronx. Housing affordability is a constant issue for the people of New York.
February Real Estate Report
February 2020 was a strong month for real estate transactions as demand grew along with the strong national and NY economy. A persistent lack of housing and new apartment construction is causing higher prices for homes and rentals.
Last month, home sales grew 1.7% YoY, to 7,563 from 7,437 units. Pending sales jumped 12.8% compared to one year ago, climbing to 9,964 homes from 8,836 sold in February 2019. New listings rose 5.6%, from 13,728 homes to 14,498.
Median sold prices climbed to $301,000, a 9.1% increase over the $276,000 level 12 months ago. And that was $1000 from January. The rapid price growth can be attributed to an insufficient amount of homes available for sale.
Active listings sunk 8.9% from 62,318 homes 12 months ago to 56,747 last month. Government inaction to support new home construction and unwise rent control has discouraged apartment construction in the state of New York. Change is needed.
On the positive side is new listings growth in Nassau County, Queens, Monroe, Bronx, and Dutchess. Suffolk, Oswego, Niagara, Onondaga, and Madison saw drops. Overall in New York State, new listings grew by 5.6% from 13,728 homes to 14,498 last year. New Listings were down 2.9 percent to 14,370 in January and inventory had shrunk 9.1%.
NYC Luxury Rental Market
A report out by Douglas Elliman show luxury rental prices in Brooklyn and Queens rose strongly. The said 312 new luxury rentals went into contract in February in Manhattan which is down 9.6% compared to the same period last year. The median price of these leases stood at $8,900 per month, falling 1.1% from a year ago.
Luxury rental prices in Brooklyn rose 11.5% compared to 12 months previous to $6,322 per month. And in Queens the top 10% new luxury rental leases had a median price of $5,192, +15.4% from last Feb 2019.
According to Mansion Global, the Manhattan rental market shows a median price for the 3,089 new leases signed in February was $3,500 (+ 2.9% from last Feb 2019). And Brooklyn’s median rental prices rose 7.1% to $3,100 per month, the highest price ever.
Just like the Boston housing market, San Francisco market and Los Angeles market, and most major city markets across North America, the New York housing market is under pressure. The NYC forecast is for more of the same.
It’s pretty far fetched that New York’s real estate performance could deviate too much from the US national forecast. Now in 2020, the possibility of a national housing market crash and a New York housing market crash is real. The economic fallout from the shutdown has cascading and lasting effects.
The New York governor is complaining the Federal Government should bail NY out but all other governors could ask the same. The fact is, the governor’s own housing policies have created a housing bubble that may burst loudly.
Is 2020 the right year to invest in rental income property? Contrast the stock market to investing in real estate. The current stock market volatility is a concern and could impact the housing market. with unemployed Millennials and with wealthy individuals selling off assets to cover their leveraged positions. By June, it could be a mess.
Some Experts are Talkin’ Crash while Others Aren’t
There are enough media and realty pundits talking about a real estate market crash in New York soon. CNBC called from one back in the spring, but it’s not happening. Prices in Manhattan, Brooklyn, Queens, have kept rising slowly.
Removal of the Dodd Frank noose and easing of mortgage lending should create more demand for homes in New York, Los Angeles, Boston, Seattle, Houston, SF Bay Area, Miami, and well, every US city. If land development regulations are eased, it will allow for more home construction and help to ease the auctions atmosphere that has rocketed them upward.
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