|State of the Market, June, 2020|
Dear Friends,Hoping you and yours are all healthy and safe. This are difficult times for sure.
New York State has begun the re-opening process and is every region is in either Phase I, II or III. New York City started Phase I on June 8th and there is a 2 week minimum before Phase II can begin, assuming the State’s criteria are met. For many of you, that means a return to some level of business and let’s hope we are all back in business before too long, and safely.
While real estate was not completely shut down during Covid 19 crisis, not many new transactions started, it has been more the completion of transactions that started before. It isn’t so easy to see and purchase homes from virtual showings or solitary walk-throughs without an agent. That shows in the data. Here are some statistics about NYC, Queens and Forest Hills; all from StreetEasy.
>New sale listings for all of NYC are down 70% from the same time last year (May).
>Queens is down even further, down 82% (only 156 this year vs. 879 last year). Forest Hills was down 78%; with only 22 new listings compared to 99.
>Total Inventory sale listings for all of NYC are down 30% as of May. Queens sale listings are down 25%; 2,434 this year vs. 3,274 last year.
>Forest Hills is down only 10%; 274 vs. 307. For single-family homes, there are 47 current listings vs. 59 last year. There were only 12 recorded sales in Forest Hills in May, compared to 47 last year.
It is a very small base but 3% of the closings were at a discount as compared to 9% last year in Forest Hills; similar to 3% this year and 10% last year for all of Queens
What this means is simply that people who would have normally put their house on the market are waiting until the Covid 19 crisis passes when they hope they will have more prospects and a better chance of getting the price they would like. We are Terrace have several clients who are doing just that. Current sellers are resisting price reductions as they wait out the crisis and seem to hope for a quick recovery.
The rental data:
Rents are up in Queens and Forest Hills as well; 1.2% and 6.6%, to $2,123 on average and $2,400 respectively. The number of transactions aren’t available by market but for all of NYC, transactions are down sharply. Many renters are extending their leases and staying put while many others are fleeing Manhattan.
To see what is happening in sales or rental specific markets by a selection of criteria, try this tool below:
StreetEasy’s Interactive Market Tool
You may have also heard anecdotal stories about Manhattanites fleeing the density of their Manhattan homes and buying or renting in the suburbs. And there are many such stories, including some in Forest Hills. Most are going further away from Manhattan, such as Connecticut, New Jersey or Long Island but some are landing here in Forest Hills. The types of places they are fleeing to in are not mid-rise or high-rise buildings, typically single family homes.
Here is a link to a Wall Street Journal article (firewall but allows a few views per month) titled “The Housing Market Around New York City is Booming”.
WSJ Says Market Around NYC is “Booming”
As Forest Hills is nearly fully developed, there isn’t space to build new and limited inventory or existing homes. While many are expecting prices to drop, and they certainly will in some areas, they could actually rise where there is limited inventory of the type of homes desired in the areas wanted. My brokerage has sold 2 new listings for townhouses in the $1.2 million range, both within about a week. So, there are transactions happening in the right circumstances.
There are also others who are considering listing their homes, and likely would be listed already, but they have postponed putting their house on the market due to concerns of limited access, potential spread of the virus in their homes, etc. Later this year, I would expect a steady stream of new listings; assuming prices don’t drop significantly.
What does the larger industry expect? This from Forbes Magazine on May 26th by Alexandra Sternlicht:
In New York City, the global epicenter of the coronavirus pandemic, homeowners are not putting their homes on the market: new sales inventory has hit a significant low during the months of lockdown as validated by real estate platforms Zillow, StreetEasy, local and suburban brokers and a moving company.
New home listings on real estate platforms Zillow and StreetEasy in the New York metro area have been down by more than 70% in the weeks of the pandemic as compared to the same weeks last year.
The platforms and Douglas Elliman NYC real estate agent Monica Benhuri told Forbes that rental demand remains largely unchanged from last year due to people looking to move within the city—Benhuri notes this is driven by people in their mid-to-late twenties and early 30s looking to upgrade their pads as demand by recent grads migrating to the city for employment has dropped.
Similarly, New York City-based movers TikTok Moving & Storage is experiencing 60% less business amid the coronavirus pandemic; company president Ricky Sharma told Forbes the company was doing 100-plus moves per month pre-coronavirus—now, they’re doing around 30 moves per month.
Here is a link to the full article:
Despite Chaos, Real Estate Data Shows New Yorkers Are Not Selling Their Homes
The overall NYC real estate market was already softening a bit prior to the coronavirus landing, with Q1 total volume for the city down 16%, as per World Property Report. There were variances within markets and submarkets, including Forest Hills which showed no decline in Q1, as per StreetEasy.
Here is a link to the WPR story:
New York City Reports Dramatic Decrease in Residential Sales in Q1
In some very good news for both buyers and sellers, the Fed Chairman Jay Powell recently reported that the central bank will keep interest rates will near 0 through 2022; a rather unusual but pointed remark meant to help stabilize the markets.See the WSJ article (firewall):
WSJ: Fed Chair Jay Powell “lets it loose”
If you have questions about what all this means for you, please don’t hesitate to reach out.It varies based situationally and in many cases, we are in a “wait and see” mode.