Manhattan Real Estate - July

4th August 2020

July was the first full month of Real Estate activities in New York City after the COVID lockdown and reopening on June 22nd. With the market now seeing an uptake in inventory levels and properties going into contract, this increase in activity levels from both Buyers and Sellers indicates that we are on the recovery phase now.

New Listings: July saw a big increase in new inventory coming to the marketplace. There were a total of 2,383 new properties that came to the market, as compared to 1,055 in July 2019 - this is about a 125% increase. The big reason for this is that Sellers who were hesitant to list during the lockdown have now started to come to the market. This is a great sign as more inventory comes to the market, this shows that Sellers have started to gain the confidence to list and we are moving towards recovery. As of now, there are about 7,800 properties listed in the market as compared to about 7,000 in July 2019. We are seeing this surge in inventory levels due to the backlog of low activity during the lockdown.

In Contract: In July there were about 500 properties that went into contract as compared to about 260 in the previous month - this is about a 95% increase. This is a great sign, and we can expect this number to keep going higher. It typically takes Buyers a couple of weeks to see properties, chose one, negotiate, and sign the contract. I am positive that in the next few months we will see an uptake in contract activity which is critical for Manhattan Real Estate.

Lockdown Impact: From Mid-March to June 22nd - there were no showings allowed in New York City, and only 660 properties in Manhattan went under contract. There was a lot of uncertainty in the marketplace and fear. As we are getting more information about the deals that took place during the lockdown - both Buyers and Sellers need to understand that during lockdown the situation and market dynamics were different and are not representative of the current market. Market dynamics are changing fast, and it is important to consult with a Real Estate professional to get the right recommendations.

(Chart and All Data Source used in this Article: Urban Digs)

Buyers: Inventory levels are high, and there is a lot of value in this market for Buyers. With higher inventory levels as compared to the same time last year, Buyers have a good range of options to chose from. However, there is a lot of competition in the market for properties that are in great condition and with attractive prices. So Buyers must be clear about their needs and be smart when they find the right property.

Mortgage rates are at an al time-low and even below 3% for a 30-year loan in July. This is the lowest in the last 50 years. With such low mortgage rates, Buyers have a fantastic opportunity to own Real Estate in New York City, leverage by getting a mortgage at a low rate, and build equity fast.

Sellers: With low mortgage rates, and pent up activity due to reopening - there is an opportunity for your property to be seen by a large pool of buyers - both who are in the market, and those who are considering in the medium/long term. To stand out in this marketplace, it is important that your property is in great condition, and that the Sellers do a proper Comparative Market Analysis (CMA) to understand trends so that they can price their property in a way that they can attract buyers and net the most amount of money. Seeking the help of a Real Estate professional is a good idea - one who can help you in determining the right marketing and pricing strategy.

A smart strategy for Sellers in this market is to price 'ahead of the market', as suggested by Gary Keller,- a pricing strategy that tells the market that they are serious to sell, and do not need multiple price corrections. Multiple price corrections can lead to the listing becoming stale soon as new inventory is coming to the market at a fast pace.

(Picture Credit: Book Shift - Author Gary Keller)

Conclusion: The Manhattan Real Estate market is moving towards the right direction, however, the recovery will still take some time. The next few months will be critical to see market activities which will play a big role in determining how Q4 will be, and we will get some direction for 2021 as well.

About Nishant Sondhi: Nishant is a Real Estate salesperson in Manhattan, and specializes in Residential and Commercial Real Estate. He is passionate about helping buyers and sellers navigate the New York market, and save them thousands of dollars, time and make the process enjoyable. His strong analytical, marketing, and negotiation skills developed during his MBA and over 10 years of sales experience give him a unique edge to best serve his clients.