2020 has certainly been the most unusual, and for many of us, the worst year of our lives from a macro perspective. We have a pandemic, a hotly contested election, political unrest and serious discussion and disagreement over policing policies as well as record wild fires and Atlantic storms. Many of us just want the year to be over.
Yet business does go on, real estate too, but with profound changes. There are many losers and some winners. Manhattan? Big loser. Brooklyn? Loser. Hudson Valley? Big winner. Connecticut and Westchester, NY? Winners. Long Island? Winner. But what about Queens and Forest Hills specifically? The answer, so far at least, is a slight winner; which is a big positive considering how Manhattan and parts of Brooklyn are faring.
Some specific numbers (source: PropertyShark) for the 2nd Quarter of 2020:
Manhattan; Median Sale price, -25% year over year. Number of transactions, -47% year over year.
Queens; Median Sale price, +11% year over year. Number of transactions, -44% year over year.
So prices in Queens (that covers a lot of neighborhoods) are stable but the number of transactions is way, way down; many potential sellers are simply waiting out the pandemic. Some buyers are also waiting to see if there are any big discounts to be had. From an anecdotal perspective, what we see at our agency are continuing, somewhat brisk sales on private homes with very slow sales on Coops. People simply want more indoor space, a yard and parking to keep their families safe and out of elevators, small apartments and communal spaces.
See ProperyShark charts below for Queens; first the trend for 2nd Quarter 2020 and then the transaction levels dating back to2016.
So, with transaction amounts down so significantly, any changes that affect the market could cause a dramatic swing in transactions and prices. Lower levels mean higher volatility.
From what we have seen so far; corporations have discovered that more work can be done from home but that working from home also has its’ limits. The traditional 5 days a week in the office is never likely to be as dominant of a working requirement as it was; at least not in the NY Metro area. So people will need dedicated work space at home. Which is more than many had/have now.
The other factor that is unique to New York is that it has been declared “dead” several times already. That doesn’t mean that the naysayers are wrong again but New York City has proved to be extremely resilient and there are literally hundreds of billions of dollars behind it that want it to succeed. According to Bloomberg news the total value of land value of NYC is $1.74 TRILLION dollars. There are a lot of people who need New York to come back.
My advice through all of this is pretty simple; think long term. At some point there will either be a vaccine and/or herd immunity that will allow human interaction in a more normal way. However, there is likely to be change in how we work and some number of virtual meetings are here to stay. In some cases, virtual is just a more efficient use of time. So think of what works for you over time and focus your priorities on how real estate can enhance your life and look for a home that meets your needs. I would be happy to help.