A turbulent and challenging year is now behind us. And although Manhattan real estate is still struggling to recover from the considerable blow it has sustained due to the pandemic, it appears that 2021 is off to a good start. Things are most certainly looking brighter as the sales begin to pick up and with March seeing the highest sales rate in over a decade.
The reason for the improvement in the market
There are several reasons why the situation is improving. First of all, the appearance of the vaccine has definitely had something to do with it. Buyer confidence has increased as they can now look forward to the end of this trying period. Moreover, interest rates are very low, and they are likely to remain like that for a bit. And on top of that, sellers and developers have been offering Covid discounts. Depending on the price of the unit, this discount can be higher or lower, but on average, it’s about 10%.
Furthermore, the sellers in Manhattan have become a little more realistic with regards to prices. At the same time, the buyers have dropped the expectations to see a 50% drop in prices here. So, it appears that they have found a “compromise,” a sort of a sweet spot.
Also, we shouldn’t disregard the pent-up demand that has followed the lockdown. That period of inactivity has allowed people to re-evaluate what they want from their homes. So, now that they know precisely what kind of a home they wish to live in, they are prepared to pay for it. Moreover, that wish for something has become a need, and needs are a powerful driving force. Therefore, if someone has wanted an extra room, now that wish has likely become a necessity with the need for a home office.
And there is also the fact that the new administration is favorable to New York City.
The current situation on the Manhattan real estate market
Compared to January 2020, the number of apartments sold in Manhattan rose by 50% this January, while the numbers for co-op housing are even more staggering, being 167%. These are all fantastic news and an undeniable sign that the real estate market is recovering.
The situation in Manhattan real estate market is very favorable for buyers at the moment.
Still, it’s essential to know that this is currently a buyer’s market with an exceptionally high supply of housing solutions. And this will undoubtedly be beneficial for buyers in 2021. Still, no matter how favorable things are for the buyers at the moment, it’s always smart to hire real estate agents to help you through the process. And even with them on your side, be careful and don’t drag your legs. If you have been thinking about moving to a new condo in Manhattan and organizing pleasant relocation within the area, you must know that the window of opportunity is closing. Therefore, if you want to catch some of the great deals, you need to act fast.
Also, keep in mind that while the prices are lower now, they didn’t crash. Furthermore, luxury buyers have returned after a year of absence from the scene. And luxury takes up the top 5% of the entire inventory, priced at $5 million and higher. So after a slow period in this market segment, the situation is steadily picking up, and it has started to reflect the busy times we saw in 2015 and 2016.
The rental market
Although there has been an increase in the rental market too, the demand is nowhere near what it used to be. Until the employees can go back to their offices, the rental market in Manhattan will stay slow. However, we can expect things to change in a few months. So, if you are in search for a rental unit, make sure you do some research and make searching for a perfect rental home a breeze.
Important points for the buyers of Manhattan real estate
We have already mentioned that the choices are ample, the sellers are more willing to negotiate the price, and interest rates are almost as low as they have ever been (3% or even less for a 30-year loan). All excellent news for the buyers. Nevertheless, buyers should pay attention to the fact that all three of these metrics have started to change direction.
If the majestic views of Manhattan skyscrapers have been calling your name, now is the time to act.
There is still 10% more inventory than there was this time last year. However, this number has started to decline. So, while new apartments are being listed on the market, the demand is outpacing the supply. Moreover, if you are looking to buy a Manhattan apartment, keep in mind that although the prices haven’t increased yet, the demand is slowly giving sellers their confidence back, and they are becoming less and less willing to negotiate. At the same time, interest rates have been on a slow increase, reducing purchasing power.
Undoubtedly, all of this will impact the marketplace considerably. Therefore, buyers must realize that while things are still very much in their favor, the opportunities and great deals are certainly slipping away. So, if you are in two minds, know that having a buyer’s market in Manhattan never lasts long.
Important notes for the sellers of Manhattan real estate
This situation is looking bright for the sellers too. So, if you are selling, you are probably aware that this activity is good for you. However, you have to be careful and price your property well. If this is not your first rodeo, you probably know that the longer your home stays on the market, the more it will lose value. Also, keep in mind that buyers are better informed than ever and will recognize value when they see it. Therefore, if you overprice your property, you will essentially help others sell their real estate faster.
Moreover, you should know that interest rates don’t only affect buyers. When they increase, buyers ‘ purchasing power declines, and they have less to offer to you. And since we can expect interest rates to rise, sellers have to be careful with their timing.
Now is the good time for those thinking about selling property in Manhattan to take that step.
So, if moving long-distance, far from the city, or somewhere less pricey has been on your mind, if an idea to leave the Big Apple for good has crossed your mind, perhaps this is a good chance for you to act on it.
It appears that opportunities like these follow catastrophic events. But if the situation in the world hasn’t been the best, why not focus on something more positive and take advantage of the good opportunities you have been presented with. And while the year has only ended its first quarter, we still have to see how the situation with Manhattan real estate in 2021 will develop. But for now, research the qualities of genuine real estate agents and take the plunge. Whether you want to purchase a property in Manhattan or sell and leave New York, now would be the time.