March Market Update
We, at The LevinKong, team hope that you and your loved ones are safe and well. We are thrilled to welcome spring to New York City. Our Spring market is already in full gear and the pace and volume of activity is incredibly encouraging for the market and the city in general.
It was almost a year ago that we were hit with a life changing event with far-reaching implications through every aspect of our lives and the city. There were many who thought NYC would never rebound, but we’ve heard that before, and the city has roared back stronger each time. With the vaccine rollout and optimism about the state of the economy, NYC and the NYC real estate market have recovered much quicker (and more substantially) than many would have predicted. The saying that things can change in New York minute is certainly ringing true.
After many months of experiencing a consistent buyer’s market, throughout much of the city’s market segments, we have witnessed activity of late that would suggest otherwise. Particularly in our resale market, we are seeing numbers that suggest a balanced market, with certain segments skewing towards sellers. At the height of Covid fear, mitigation and lockdowns, we had seen inventory rise and hit levels in the 11,000 unit range. In recent months, we have been consistently in the 7,000-unit range. As inventory begins hitting the market in anticipation of our active Spring market, inventory levels are actually dropping slightly. This is because we are seeing more inventory get consumed than what is coming to market. Right now, the amount of actively listed inventory in contract is over 50%, meaning more than half of listed inventory is no longer available. This is up 30% year-over-year and pending sales are up 43% year-over-year; both gains are from a pre-Covid market.
New development is still skewed towards buyers; but even there, developers are tightening up their discounts and offering less in the way of concessions. We have still been putting together great deals for our buyers. However, in this segment, it is imperative that you have guidance as to where to look. Additionally, higher price-points remain more vulnerable.
In general, sellers have adjusted to a place in which buyers are engaging. Many of our buyer clients are coming to the realization that the market drop was not as profound as they had originally thought. While many are disappointed to have not had the chance to take advantage of basement prices, they are comforted by the value they have achieved and the sense that the market is on an upward swing. We are seeing a trend in second home buyers from across the country and the world, empty nesters moving back from the suburbs, foreign investors coming back, and New Yorkers rejiggering their living situations, often trading up to larger homes. We have not seen the finance sector clients enter the market in mass yet, but we will as bonus season is upon us.
Interest rates ticked up in February but have dropped of late. Most experts are predicting that an upward trajectory is inevitable as the prospect for economic recovery is strengthening. More stimulus and rising debt will put upward pressure on inflation, leading to that rise. That being said, rates should still remain low in historic context.
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.