The resilience of the Manhattan residential real estate market was on full display in the first quarter. A new year, new administration, low interest rates, and multiple and more readily available vaccines restored hope. Covid changed the way buyers look for and value space. With pent-up demand, today’s purchasers seek units with outdoor space and private areas for home offices, working out and gathering safely.
New York is alive and getting better. The change is palpable. Establishments have been reopening for business gradually. Restaurants, gyms, museums and movie theaters along with pedestrian and car traffic have returned. Hotel and airline bookings are up. In-person classes at public high schools are resuming this week. Vaccines are more readily available. Those who have been immunized are expanding their social circles, albeit tentatively. Yankee Stadium and Citifield will host the start of the baseball season with 20% fan capacity. Tourists are trickling back. Federal stimulus coins are jingling. Days are getting longer and warmer. And the spring selling season is well underway for New York City’s residential real estate market.
Yesterday’s NY Times front page story “Possible Boom Post-Pandemic” recognizes an economic sea change. We are turning the pandemic corner, and for that we are grateful. Economists are predicting a supercharged rebound for the U.S. Days ago, in a February 18th report issued in Washington D.C., Fannie Mae Sr. VP and Chief Economist Doug Duncan predicted a 6.7% GDP increase this year, simultaneously cautioning that the same reasons for expansion might also push up inflation. “Growth,” he noted, “will accelerate sharply beginning in the second quarter.” The news bodes well for residential real estate in New York.
A new president was sworn into office this noon, and as the Times aptly reported, his “To-Do List” is daunting. Primary among his tasks, President Biden has pledged to oversee the vaccination of 100 million Americans in his first 100 days. In New York, we’re looking forward to when most are inoculated, and we gain herd immunity and can look back on this dreadful nearly year-long Covid period.
We’re two weeks away from the start of a new year, and despite an accelerating pandemic and the closing of indoor restaurant dining, here are ten reasons to be optimistic about the New York real estate market of 2021.
Manhattan real estate is recovering. Signed contracts and transaction volume are up. Especially encouraging is activity on the high end which saw 21 contracts signed over $4M in the last week of September—the highest since lockdown and the strongest final week of Q3 since 2014 when 33 contracts were signed (per the Olshan Report).
When Covid lockdown ended on June 22nd, the activity surge we were hoping for in Manhattan from pent-up demand never happened. While July saw a bounce, recovery was limited primarily to properties priced under $1.5M, fueled especially by the lowest mortgage rates in 50 years—2.88% for a 30-year fixed product. An August lull followed, best explained by the summer calendar as potential buyers remained in their vacation homes.
Since the March 10 shutdown, the city’s real estate markets have become dislocated. The eight-week lockdown has seen dramatic declines in supply and demand along with exceedingly thin volume for pending sales and closings. Once businesses are reopened safely, and we’re able to show properties in person, inventory will build and signed contracts will occur again, but there will be downward pressure on prices.
April 12, 2020 When you read the press coverage for Q1 2020, it’s critical to evaluate the stats with multiple grains of salt. We’re not in the midst of a real estate slowdown; in New York, we are near a standstill. Consider that this January’s sales were pretty close to January 2019 totals, and February 2020 volume was actually 10% higher this year, and the first week in March 2020 saw 8% more contracts signed year-over-year. Then came Covid-19.
Early spring’s daffodils are here, and we’ve shed our scarves and gloves, but we find ourselves in uncharted waters during an unprecedented season. A new virus is threatening our lives and our livelihoods as it spreads angst, anxiety and confusion. With an incubation period of 2-14 days according to the CDC, and with symptoms appearing about five days after infection, the novel virus unnerves and unsettles us. Human distancing seems to be the most effective tool against the spread of this contagious disease.
According to sources, Punxsutawney Phil didn’t see his shadow on February 2nd, so an early spring is forecast. But it’s a leap year, so this February is one day longer. Join the crowds on the 9th in Chinatown for the colorful and very noisy Chinese Lunar New Year Parade to celebrate with costumed dancers, martial artists, giant dragons, firecrackers, cymbals and drums. Pick up some popcorn for Oscar Night that evening as red-carpet screening parties typically start at 7pm. Random Acts of Kindness Day is on the 17th, same day as Presidents Day, and Love Your Pet Day is on the 20th. Thoughtfulness matters.
At the threshold of a new decade, we greet 2020 with enthusiasm and optimism. We’ll celebrate Martin Luther King Day on the 20th. Had the Reverend lived, we can only speculate how he would have joined with other clergy to counter the current wave of horrific antisemitic violence. To my Chinese friends who will be hosting two weeks of new year celebrations from January 25th to February 11th, I wish you huge blessings and good fortune in the Year of the Rat. May you smile often.
Neither winter’s frost nor shortened daylight hours can dampen end-of-the-year holiday parties, with the first Chanukah candle at sundown on the 21st, Christmas on the 25th and Kwanzaa on the 26th. With flutes of champagne and mugs of hot chocolate, we’ll bid goodbye to the last month of the decade to welcome 2020. Merry New Year one and all!
Is it already November? Don’t wait for the 13th for World Kindness Day or for the 28th to express gratitude. Do remember to turn your clocks back on the 3rd when Daylight Savings ends, do get out and vote for your local officials on the 5th, and honor military veterans on the 11th. In case you didn’t know, November 24th is Celebrate Your Unique Talent Day, so pull out your harmonica or stand on your head and rejoice in YOU! Happy Thanksgiving!
Autumn is my favorite time of year when the air is crisp but not yet cold, and the apples and pumpkins are ripe for picking. Our region’s fall colors will soon show bursts of red and golden yellows, so do take a drive north or a stroll through Central Park. It’s the month for Breast Cancer and Lupus Awareness. World Teachers Day is on the 5th and World Smile Day on the 7th. Watch out for friendly goblins on the 31st.
Today is National Skyscraper Day, so look up to marvel at the more than 7,000 architectural feats of engineering in our city—structures with 40 floors or more. This month, Labor Day came early, and the Jewish High Holy Days will be late with Rosh Hashanah on the eve of September 29th. Coinciding with the Hebrew month of Elul, it’s an important season for self-reflection. Lord knows we have much to consider and improve upon and build in our lives and in our nation. Autumn, my favorite time of year, begins on the 23rd.
Those hazy hot and humid days of August are upon us in this third month of summer, the perfect time of year to hang your GONE FISHING sign and when most Europeans take their annual vacations. Celebrate Sisters’ Day on the month’s first Sunday, Lazy Day on the 10th, Middle Childs’ Day on the 12th, and Just Because Day on the 26th.
And just like that the 2nd half of 2019 begins with summer in full swing. Local zucchini is in abundance and corn and tomato season lie ahead. Throw some shrimp on the barbie and celebrate the 4th with gratitude. As of July 1, NY State’s new progressive mansion tax goes into effect. A one-time payment at closing, the levy begins at 1% for transactions from $1M-$2M and rises incrementally in eight tiers, capping at 3.9% for sales of $25M or more. It could have been worse.
Take time to smell the roses and the honeysuckle this month. After all, it’s June and the days are longest, so there’s time for gardening, camping and tennis in this first month of summer. Take stock of your achievements as it’s also the end of the 2nd quarter and the midpoint of the year. Happy Father’s Day to all great Dads. Iced tea anyone?
With the start of the 2nd quarter comes the promise of warmer weather and increased sales activity. This month, we’ll celebrate with family and friends on Easter, Passover and Earth Day. Tax day is approaching quickly, and on the 19th, a Full Moon will be rising.
