What an Incredible Month for NYC Real Estate!
March and April seemed to indicate New York City real estate is more than ready to come back to life. Inventory throughout March held steady at just over 7,000 units. Even though a record 1,400 units came onto the market, demand did not let supply inch up much more than one point during any given week last month. We also saw over 300 contracts signed a week leading to over 1,400 completed contracts for the month.
During that time, the luxury market (properties priced above $4 million) led the charge with more than 30 signed contracts a week stretching back to February! In Manhattan specifically, there are over 4,000 units currently in-contract. Another feat never accomplished — or at least not in a long, long time.
Why is the market responding like this now? There are a few theories:
* Pent-up buyer demand. The real estate market was completely shuttered for an entire quarter last year. It then spent the whole third quarter licking its wounds. Q4 started to hear the rumbling of hungry buyers. After all that time off, it's almost like there are two buyer's markets right now, including prospective buyers from 2020 added to the buyers for 2021. With no traditionally bustling spring market last year, many theorize that those homebuyers are back in the market now.
* Interest rates are still super low. Money is currently very cheap to borrow.
* People are moving back to the city. Over 1,000 leases were signed in the last week of March, a figure usually reserved for July and August, the busiest months in the “normal” rental market. Expect this trend to continue as vaccination rates increase.
* The stock market. The market is creating so much cash and wealth in New York City right now that some say it's overheated. But many people are driven by the confidence it stirs, and they are putting money down on real estate.
*COVID pricing is still out there. The pandemic's effect on pricing is the primary reason we're currently in one of the hottest market trajectories of all time.
Prices didn't really rise in March or April but transactions have increased. Even though the price delta from the last listing price to closing price shrunk from about 10 percent to about 7 percent, it's lower pricing that has attracted buyers and pushed contract signings to such unprecedented levels.
Brooklyn is in bidding wars and Manhattan is seeing a huge influx of buyers who are eating up supply...We could be on the cusp of a record-breaking year for Manhattan real estate so get ready!
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