As we approach the Thanksgiving holiday and the end of the year, I want us to take a look at exactly how the New York real estate market is fairing and where it could possibly be heading.
This week we will see…
- Contract signings are up, supply is down. What does it mean?
- There has been a larger drop in contract signing this year, than after Covid, why is this good news?
- The longer it takes to sell, the more you have to reduce your price, but by how much?
Let’s get started.
Where is the Market Today?
While reviewing this week’s statistics, you are going to see that we have had 183 contracts signed. That’s an almost 13% increase from last week. It goes without saying that this is a nice increase and very positive to see at this time of the year. 222 properties were listed for sale this past week, which is a decrease from last week. Is this something to worry about? Absolutely not. It is typical for contracts and listings to dip during the holiday season, and we are seeing a slight uptick in contracts signed. Overall, we do have fewer properties in contract than we historically would like to see at this time of year, but with everything happening in the financial markets this could be so much worse!
Has NYC Real Estate Rebounded Since Covid?
As we look deeper into what is currently happening, we must turn our attention to what has been happening over the course of the past few years. Currently, there are 7,359 units for sale in New York City, and another 2,621 units have gone into contract. When we compare the number of pending sales from this year to last, there is a 33% decrease. Reading that sentence you may think “What does this mean for the future?” Believe it or not, the future is brighter than you may think.
Let’s go back to 2012 for a moment. From 2012 to 2019, the number of properties that are in contract typically ranged between 2,000 and 4,000 units. That is a good matrix to use as we compare what happened since the onset of the pandemic. From the end of 2019 into the beginning of 2020, there were 2,456 units in contract in New York City. By August 2nd, that number dropped about 1,000 units to 1,447. That was something that is rarely if ever seen in the market. But what has happened since then? We have witnessed the market correcting itself over the past couple of years. While prices have stayed consistent - value is down. Instead of sellers slashing prices, they went in a different direction and completely removed their listing completely from the market.
In 2021, we had a record number of properties that sold. On June 12, 2021, we had 4,769 properties under contract which was off the charts! This month we have 2,600 units under contract, roughly 2,000 units less! Why do I bring this up? The worst might be behind us. If the market was going to crash, it would have happened when we took the nose dive in contract signing. We are now back in that 2,000 to 4,000 unit range.
A lot of people are lured into clickbait headlines on the internet that claim the real estate market has a lot of room to drop. According to the numbers, the rug is not coming out from underneath us. The market dropped, rebounded, and is right on course for where it should be for this time of year. Real estate is relative to its location and New York City has rebounded in a big way since Covid while other areas of the country are not doing so well. The numbers don’t lie, New York City is in a great place for growth in 2023.
What’s the Bottom Line?
Supply is currently 2.3% higher than last year. Sellers are not afraid of the market and if there was going to be a reaction to the market sellers would be trying to get their properties sold before things continued to go south. Since supply is slightly down, that means sellers can see the market is turning around and their investments are on course to make a profit. We may be bouncing around a bit at the bottom, but the sky’s the limit.
Your Questions Answered
A lot of people ask me about negotiations relative to the amount of time a property is on the market. It’s a great question, and here are some simple answers.
- If you have a property on the market for 120 days (4 months) or more, you are looking to negotiate at an 11% difference from your asking price to get a deal done.
- If you have a property on the market for 90-120 days, you are looking at an 8% negotiation.
- 60-90 days is 5.5%.
- 30-90 days is 3.1%.
- If you are getting your property sold within 30 days, you are basically getting what you want, and that means 0% negotiation difference.
Remember: If the price is right, it doesn’t matter where the market is, you are going to sell your property.
If you have been following these weekly posts, then you have a lot of information to guide you through the market and its ups and downs over the past few months. From contracts signed and properties sold to new development contracts throughout the boroughs, you are thoroughly in the know. If you know someone who is interested in real estate or this information regarding their own properties feel free to share and advise them to contact us so that I can place them on our mailing list.
I am always here to empower you with knowledge so you know when to jump into the real estate game or redirect your strategy to get exactly what you need. I am always here to answer your questions, so please feel free to contact me about anything or a question you would like me to address in our next post.
Have a happy Thanksgiving, and let’s see what the rest of the year will bring us in the New York real estate market.