Half of all homes sold in the United States today are selling for more than asking prices. On average, every home sold in 2021 has just over five offers. Days on the market, historically averaging around 60, is now 20. All of these statistics come from NAR Economist Lawrence YoonDraw a picture of a national market experiencing a supply shortage and fluctuating with demand. The Manhattan market has just made its 19th week with over 30 contracts worth over $ 4 million; There has been no precedent for this number since the 2008 recession.
Apparently, the skeptics who wrote that New York is dead were predicted prematurely (sorry James Altucher, Jerry Seinfeld were right). In fact, the city has a glorious history of disaster recovery: the real estate market skyrocketed in January 2002, less than four months after 9/11, and again in late 2009 and early 2010, well before the rest of the country began to recover from the recession. 2008 year. This time, as cities across the country were the epicenter of the first wave of the COVID-19 outbreak, many New Yorkers fled the city, ostensibly never to return. Of course, things look different now. After a school year in the Hamptons, Westchester, or Fairfield County, many people find they miss their old lives. Unfortunately for those who have abandoned their city homes, it has proven difficult to find a replacement.
Buyers bear the brunt of this run on properties. In an environment where two weeks in the market seems like a long time to many agents, who see their listings gather in days or even hours, buyers and their agents must act quickly and aggressively in order to succeed. Last summer, it was impossible to imagine that in just a year there would be such a zeal for acquiring urban real estate that the desired property at a good price would be sold in a day or two. And while that enthusiasm began six months ago in retail space in New Yorkers, the market in the second quarter welcomed national and international buyers who were also absent prior to the pandemic.
As always, the market is less generous with its gifts. Condominium sales are far superior to cooperative sales, especially in the more expensive price tiers, both in quantity and price per square foot. While the area below 14th Street was particularly hot for condominium sales; On both the Upper East and Upper West sides, newly built super-luxury buildings see inventory flying off the shelves. Meanwhile, co-ops worth $ 10 million or more languish, often for months, as a new generation of ultra-wealthy buyers are ambivalent about the constraints on co-op ownership. Not to mention the fact that new buildings, as a rule, are ready to move in and only require finishing. However, their pre-war counterparts in the cooperative market usually need some work, and often a major overhaul, including electrical wiring and plumbing, bathroom and kitchen remodeling, and expansion of what is often inadequate closet space.
Today’s hot national market may seem like a bubble, but it is not. Google reported in April that query “When will the housing market crash?” increased by 2,450% over the previous month. Several factors contributed to the surge in home purchases in the wake of the pandemic. First, people across the country now think differently about their lives. They need a home office. They expect to spend less time in the office, which is why space at home, both inside and out, is becoming more and more important. Second, construction of new homes has slowed in recent years and more and more elderly people are aging on the spot. Taken together, this means that at a time when demand is sharply increasing, fewer properties appear on the market. The equation of supply and demand shifts sharply towards the demand side.
How long will this last? Almost certainly until 2021. Prices began to rise in New York, especially for condos under $ 5 million and the most popular new condos. So, buyers, act quickly and boldly. It may take some time before you see today’s prices again.