Elegran Market Update: August 2020
Data for July shows a sharp uptick in market activity with sellers bringing their homes to market at a brisk and consistent pace while buyers viewed properties, put in offers and signed new contracts. The month of July presents us with 31 days of in-person showings, whereas June, only had eight days of NYC in Phase 2 and restrictions on in person showings lifted.
In July 2020, almost 500 new contracts were signed, a near 100% increase from June, but still about 35% below the number of contracts signed in July 2019. The ongoing debate about the upcoming school year, whether it will be in-person, hybrid or fully virtual, is a big x-factor for demand with the ongoing uncertainty potentially delaying home buying and selling decisions.
Manhattan supply, excluding new development, saw a robust 27% increase in listings month over month, and is now 17% higher YoY with 6,771 apartments available for sale. Listings have been coming to market consistently, with an average about 600 new units per week over the last 4-weeks.
New York City real estate is increasingly being fueled by local New Yorkers today [read here]. This is changing consumer demands and contributing to a surge in demand for Brooklyn, specifically the neighborhoods of Greenpoint, Williamsburg, Brooklyn Heights, Park Slope and Red Hook. As a result, we are seeing the Brooklyn market more competitive on the aggregate than the Manhattan market.
Many of the Manhattan neighborhoods most loved by locals are seeing a surge in buyer activity over the last two months including Chelsea, Gramercy Park, Murray Hill and the Upper West Side. Other neighborhoods that rely more on pied-a-terre buyers or international buyers are seeing much less buyer activity including Midtown, Sutton Place and Financial District.
We are seeing the bid-ask spreads continue to narrow consistently since they peaked in early April when we were seeing the average discount be almost 8% off the asking price. Over the last three months, we have seen this decrease to around 3.5% in late July. The average discount today for properties below $1M is 2.8% and about 4.2% for those above $1M. Brooklyn remains more competitive than Manhattan, with an average discount of the asking price of only 1%, compared to 5.25% for Manhattan sales.
The rental market continues to see increases in rental inventory, up 25% in the last month. Landlords have decreased their asking rents and increased both the prevalence and amount of concessions being offered. Additionally, we are seeing some would-be renters look to buy now, taking advantage of historically low mortgage rates and a less competitive market.
As we continue to navigate this crisis, it's still important to note that this data alone does not convey the full picture and in order to understand how your needs match the market requires an Elegran agent, in partnership with a trusted team of experts working on your behalf, to assist you through the process safely and successfully.