February Market Update
The LevinKong Team hopes you and your loved ones are healthy and well. NYC has been experiencing blustery snow and chilly temperatures after a relatively mild winter. At the same time, our sales market has really been heating up as of late (which is no surprise to us).
Currently, 46% of actively listed inventory in Manhattan is in contract; that is up 21% from the prior year. In general, pending sales volume is up 35% year-over-year. These are upticks from the pre- pandemic market of early 2020. Again, we have been predicting this, and there is no surprise here. 2019 was the bottom of our market cycle. 2020 had roared in like a lion with momentum resonating through the market, only to be quelled by COVID-19. We have noticed a lot of that backloaded demand courtesy of an emerging, renewed sense of optimism.
Our resale market, in particular, is showing great strength. Last week we hit a weekly total of 260 signed contracts in Manhattan. During much of 2020, that number had been hovering around 100 signed contracts per week. Our resale inventory levels have remained relatively low, while we are seeing more and more inventory go into contract. Deal volume is up – and at the moment – price increase is lagging, but that won’t be a long-term situation. In fact, we have seen many of our listings achieve full asking price, or very close to asking price.
Listings do still need to be priced in line with the market or they do languish. Also, properties in need of work are not moving at the same pace as renovated units. This can be overcome through strategic pricing and marketing. However, the pandemic has taken the wind out of many sails that might have shown interest in renovation projects under more normal conditions.
We have been achieving fantastic deals for our luxury clients, particularly in the new development space. In higher price-points, we have achieved discounts over 20% below ask, and fantastic seller concessions to boot. This is the segment where demand does not quite match inventory levels. We are speaking with many buyers from outside of the city, and outside of the country, who are keen to take advantage of this dynamic.
Despite the rise in the ten-year treasury yield, interest rates have remained at their historically low levels. This is adding more demand in our market, particularly impacting lower price points. Typically, rates follow the same path as long-term bonds; however, that has not been the case, due to actions that the Fed has been undertaking. The Fed has been buying $120 Billion in bonds every month, keeping rates down in order to help stimulate the economy. This appears to be a trend that will continue in the near future as the Fed continues to buy bonds and mortgage-backed securities.
With proper guidance, there are many ways to take advantage of this dynamic and intricate market. More than ever, a data-driven, research-based approach, rooted in decades of experience, will equip our clients to thrive in this environment. Please stay safe and let us know if we can answer any questions you may have about the market, or how best to navigate complicated decisions.