January Market Update
We, at the LevinKong Team, hope that everyone is safe and well and that your year is off to a solid start. Collectively, we have gone through a lot, but there is much to be hopeful for as we embark on the new year. New York City is still proving its resiliency, and we have come a long way since the darker days which engulfed our city last spring. NYC real estate is not fully out of the woods just yet, but there are many positive signs pointing to a rebound.
While sales volume took a 30% slide from 2019 to 2020, much of that was a byproduct of our truncated selling seasons. That being said, we are currently up 35% in pending contracts versus the same time last year. 2020 saw a 39% jump in sales volume from Q3 to Q4. The year ended with a momentum surge that is carrying over into 2021. Currently, 44% of actively listed inventory is in contract; this is up 33% from last month, and 16% from the prior year.
Anecdotally, our team just experienced its most active week since the first week of March. We saw several of our listings go into contract at, or close to, asking price. We were also able to achieve a 25% gross price reduction on a luxury new development condo, demonstrating that we are still in a market ripe with opportunity in vulnerable segments.
Prices did not collapse in 2020. Median listing discount on properties under $1 million was less than 6%. The same discount was hovering in the 8-10% range in the middle of the market, and hit 16.5% in the $5-10 million segment. On average price-per-square-foot dropped by approximately 5% throughout most of the market and approximately 8% in the luxury sector.
Also of note, our luxury market saw a 36% rise in contract activity year-over-year in Q4. This was due to a combination of price corrections across the $5 million plus market segment and a renewed appetite for second homes in NYC, fueled by savvy, opportunity-seeking buyers from across the country and the world. These are buyers looking for value and – for the most part – they are getting it.
After months of higher-than-normal inventory levels, supply has dropped significantly over the most recent three months. At the same time, we are seeing a surge in buyer activity. We are not in a sellers’ market, but buyers’ leverage is moving away from them, and buyers of value should be looking to take advantage while discounting and incredibly low interest rates are still in play.
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.