After several trying months, the New York City real estate sector is rebounding. Following the city’s phase 2 reopening phase, data sourced by UrbanDigs indicated that contract activity ramped up 41%, hitting a new peak since the nationwide shutdown in March in response to the COVID-19 pandemic. The numbers also showed the volume of new listings also jumped 57%, which is the highest mark since the first week of March.
While the total number of listings has decreased by 36% since this time in 2019, brokers are optimistic the downward trend in the city’s real estate market will be short-lived. Real estate professionals fully expect that the pent-up demand resulting from months of mandated quarantined will translate into increased transactions in the near future.
Market data compiled by GS Data Services indicates that the median listing price is approximately $1.39 million, which is 5% greater than the previous year, whereas the average price-per-foot fell a mere 3% to $1,560. Real estate professionals say this data suggests that the recovery process is well underway on the listing side and is exhibiting the V-shape trend that was expected earlier in 2020.
Other major metropolitan real estate markets are showing similar activity—particularly in Miami, which has experienced a significant jump in property trades since the preceding year, as a large number of Northeastern residents—especially those residing in the greatly-impacted tri-state locality—opted to move to Florida in search of more favorable housing costs.
Between June 1 and June 27, a total of 217 contracts have been executed in Manhattan alone, which is 71% less than this time a year ago per GS Data Services reports. This should be unsurprising, however, considering that the city only reopened for in-person property showings mid-way through the month.
Aggregated market data shows that prices have not decreased as drastically as some might have expected in light of the coronavirus. Some within the industry had speculated that listing prices would plummet anywhere between 10% and 20% according to Garrett Derderian, the CEO of GS Data Services, but those conditions simply have not materialized. Conversely, there may be a promising aspect for the significant majority of the Manhattan market as employees could potentially seek to be less reliant on public transportation options and walk for their work commute.
This could ramp up demand for a significant majority of the Manhattan market and equate to increased property prices in certain neighborhoods and price brackets. The same principle is applicable for central Brooklyn and adjacent communities.
If prices do eventually decrease, it will most likely be in July after there is more development in the market. Another condition that brokers find encouraging is that buyers looking for real estate appear to be fully committed to the process. Due to the short-term market uncertainty as the virus continues to spread at exponential rates, the typical profile of the buyer is one who is interested in the near-future potential and is planning on investing in the long term.
While these early indicators all point towards the market is on its way to recovery, it is undeniable that the process for showcasing and purchasing property has been altered as a result of COVID-19.
Potential buyers have to jump through multiple hoops including scheduling a viewing 24 hours in advance, wearing personal protective equipment, sign off on a myriad of paperwork accepting the health risks they’re assuming, and avoid coming into contact with any surfaces while viewing the property, with the seller’s agent having to open all the doors and cabinets.
Regardless, industry professionals feel that New Yorkers are eager to move on with live post-COVID 19 and expect there to be continued rampant growth in transactions in the upcoming months.
Are you in the market to purchase real estate? Having an experienced legal team with a proven track record is essential for a successful transaction.
At Andelsman Law, our team will assist you through all stages of the process and are committed to remaining accessible and providing you with the best possible experience. Contact us today via email (info@andelsmanlaw.com) or phone (516) 625-9200 to find out more about how we can assist you.
