Compared to prior years, the supply and demand of the New York City real estate market has dramatically changed, but that doesn’t mean that deals aren’t getting done. With historically low interest rates and real estate agents leveraging the existing technology to provide virtual tours, there is certainly movement in the market. As in-person showings resume, we expect that to only increase further.
COVID-19 has been a shock to the real estate market in New York City. An immediate effect took place in mid-March, with “a 72 percent decline in new sales listings from the previous two weeks, and a 75 percent drop from the same period in 2019,” according to a StreetEasy article. New rentals fell 52% during that same time period. Looking back at the Great Recession of 2008 offers some comparables that it makes sense to consider, with home prices not reaching their lowest point until 2011, a full three years later.
Manhattan rents fell nearly 10% during the Great Recession but a significant decrease hasn’t yet hit the New York City market. With seller inventory languishing on the market before COVID-19 hit, it is possible that the market is still undergoing a correction. Prior to the pandemic, a full 81% of homes in New York City sold below asking price in 2019, indicating that buyers are in a strong position at this point.
StreetEasy’s 2020 Market Reports reported that “Manhattan sales prices had fallen to a six-year low, and rents had reached new highs,” and it looks like this adjustment will continue well through the end of the year.
It has been encouraging to see how quickly our industry has been able to adapt, with the Market Reports noting that the “number of walkthrough videos on StreetEasy more than quadrupled in March from February as the real estate market adjusted to social distancing restrictions.”
It makes sense, with all the uncertainty in the market and the world that the supply of short-term and furnished rentals have increased. Internships, conferences, new employees starting jobs, and tourism all have come to a halt which previously fueled the short term apartment rental market. New York City will adapt, as it has done so many times before, and now is an excellent opportunity to consider how rental offerings can be expanded upon or made more attractive to potential tenants, through incentives or flexible lease terms.
With a decrease in tourism because of the pandemic and work-from-home options more readily available, short-term rentals are both more prolific and make more sense to tenants as they work to navigate their career in these uncertain times and look for more flexibility. While we are looking forward to the world conquering COVID-19 and business operations being able to normalize, we are also proud of the ability of our team and the industry across the board in their willingness to adapt to these incredibly trying times.
Agents at Oxford Property Group have been taking extraordinary measures in ensuring the safety and satisfaction of their clients. As New York City begins to move towards reopening more and more of the economy, we know that they will continue to excel in providing the best possible service.