New York Real Estate Market
New York’s businesses, medical service people, police, and its residents have been through the wringer with the Covid 19 breakout. New Yorkers have fought the disease from China well, reducing Covid transmissions, and letting everyone breathe easier.
Now in Phase 3 of reopening New York can begin functioning economically again. Realtors have been smart in evolving to online real estate marketing and sales activities. June saw resale home sales drop due to a lack of listings, and will sales in July and August be any better? See the home sales stats below.
As buyers adjust to pursue new living spaces and Manhattan adjusts to an exodus of companies and workers, how will Realtors adjust?
The emotional scars of Covid 19 will linger but residents and NYC businesses are adjusting to what some are calling the post Corona Virus period. However, this virus isn’t beaten by any means and the social distancing guidelines are now coloring the real estate market in NYC.
New York is one of the most important real estate markets in the country, and in the world. Troubles here inevitably translate in to economic and businesses woes for the country.
NYC and Manhattan: While businesses scramble for more office space in NYC, residents are hoping to sell their home in urban areas and move to the burbs or even further afield where housing is available. This is a trend most major cities are seeing right now.
Sales Activity by County
By county, you can see how sales have been badly suppressed this year as battered buyers struggle to find listings from from fearful sellers. Suffolk and Nassau enjoyed increased sales and prices. Homes nearest New York city within commuting distance appear to be seeing higher prices.
|County||6- 2019 Listings||6 – 2020 Listings||Sales 6 2019||Sales 6 2020||Median Price 6 2019||Median Price 6 2020||Listings 6 2019||Listings 6 2020|
Bidding Wars and Higher Home Prices?
It’s leading to bidding wars for single detached homes and of course higher home prices. New York is similar to Miami, Boston, Los Angeles, San Diego, Dallas, Phoenix, Seattle, San Jose and San Francisco with a housing shortage.
Listings increase 4.4% in June compared to last June 2019, and new listings plummeted 28.3% from last year. That resulted in a drop of 34% in closed sales in June and a reduction of 25% from last June.
Pending home sales are down 1.2% so it suggests July might not be a great month for housing sales in New York.
According to NYSAR, the average home price across the state of New York rose to $300,000 which is up $5,000 from 12 months ago. Unfortunately, affordability took another drop during the month.
After the pandemic is over in 2021, the shortage will once again put intense pressure on home prices and apartment rent prices in Manhattan, Queens, Long Island and the Bronx. Housing affordability is a constant issue for the people of New York.
The rent default and eviction tsunami that many fear could send a shock through the New York rental market in the fall. Although aid is happening, for many it may be too late. The pressure on New York’s landlords will be the big story in the fall, as perhaps another “back to school” pandemic kicks in.
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.
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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Housing Market Forecast – copyright Gord Collins
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