Updated: Oct 22
Below is our recap of Q3, reflecting the first three months of resumed real estate activity in NYC, as well as our assessment of the market trends since Labor Day.
In Manhattan, as expected, total number of closings were much lower (-46.3%) compared to last year due to a lack of signed contracts while real estate activity was suspended. Also as expected, new listings poured in as pent-up resale inventory from the Spring finally hit the market. This pushed active inventory levels up 30% versus last year, the fifth highest level in 20 years. Increased inventory coupled with lagging demand, particularly for smaller units, drove up days on market to 143 days from 91 days last year. For listings that have sold, the gap between the seller's ultimate asking price and the recorded sale price ("negotiability" or "listing discount") has widened and is now 8.9% compared to 5.1% last year.
Despite these trends, the median sale price in Q3 actually increased in Manhattan, buoyed by a market-wide shift toward larger apartments and a relative increase in the market share of luxury and new development closings. The median sale price hit $1.1M (more than 7% higher than last year), but this corresponded with a 30% increase in the size of the average home, now a whopping 1,423 square feet. While there were 46% fewer closings market-wide this year than last, the $5M+ market saw only 24% fewer closings, and the market share of three-bedrooms grew (+6%) as that of one-bedrooms declined (-6%). This shift toward larger and more expensive properties may be the result of some luxury buyers seizing the opportunity to take advantage of lower prices in a softening market while those in lower price points have taken a more cautious approach in the wake of COVID.
Early indicators since Labor Day show signs of recovery. In the last month, the numbers of new listings and contracts signed are even with 2019 for the first time since COVID. While buyer activity remains low in some areas and over a third of active listings have had price reductions, negotiability has been shrinking with post-Labor Day sales closing a median of 2.5% below last-asking (versus 8.9% for the full Q3) indicating that sellers and buyers are approaching an equilibrium. With interest rates still low, and sellers increasingly adjusting prices to reflect the current market, we are hopeful that Manhattan sales activity will continue to gain momentum and rebound back to pre-COVID levels.
Across the river in Brooklyn the reported data continues to show resilience in the wake of COVID, with strong buyer demand and minimal negotiability across most of the borough. Signed contracts since Labor Day were up 6% compared to the same time period last year. Notably, the median price in BoCoCa (Boerum Hill, Cobble Hill, Carroll Gardens) now exceeds median prices in all Manhattan sub-markets except Downtown.
Borough-wide, median negotiability since Labor Day was 1.4% (closed sale prices versus last asking price), but this was distorted by sales in South Brooklyn, accounting for more than 40% of all closings, where median negotiability was 3.3%. By contrast, median negotiability was 1.1% in the Brooklyn Heights, DUMBO, Downtown Brooklyn and Fort Greene sub-markets, and in the other sub-markets there was no negotiability.
While reported Brooklyn metrics appear to be extremely positive, we have recently observed a marked change in the pace of Brooklyn sales. Perhaps because of the looming election and continuing uncertainty about COVID, many Brooklyn buyers seem to be more cautious, especially as prices have held steady. The frenzied bidding wars have ebbed, and many properties that would have, in different times, been in contract within days are instead sitting on the market for weeks without any offers. However, unlike in Manhattan where hesitancy has driven prices down, the increased time on the market has not translated to lower prices (at least so far), and sellers in the more expensive sub-markets seem to be getting their asking prices, but with patience. At the same time, because of low interest rates, buyers seem to be more willing to stretch their budgets to get their must-haves (usually outdoor space and washer/dryer) rather than compromise on a more affordable option.
Updated: Oct 22
The fall market is officially underway in New York City – since Labor Day, there have been 766 new listings in Manhattan (just over last year’s 714) and 591 new listings in Brooklyn (compared to 477 in 2019). Total inventory in both boroughs is up substantially versus this time last year (39% in Manhattan and 40% in Brooklyn), but lagging demand in Manhattan has led to a surplus while Brooklyn has proven resilient since the market re-opened in June with signed contracts up this August versus 2019 (958 contracts signed last month, 18 more than the same period last year).
In Manhattan, we've observed a growing divide between the listing “haves” and “have nots.” In this case, the “haves” are properties that offer something special (whether that's location, low monthlies, outdoor space, an amazing layout....), while the “have nots” are everything else. Despite a dramatic increase in active inventory, fewer buyers are searching in Manhattan (in the last 30 days, 595 listings have entered contract in Manhattan compared to 750 in 2019), and much of the active inventory is stagnant and has been slowly accumulating thanks to large influxes in June/early July as well as this last week. The "haves" are getting snatched up, but they make up a small percentage of the market. Of the 6,358 new listings that came on the market over the summer, 319 entered contract within 30 days. For properties that were negotiated (entered contract) post-COVID and have already closed, the median days on market was 54 and closed sale prices were 4.5% below last asking prices.
More broadly, active listings in Manhattan have been on the market for a median of 81 days, indicating that about half all active inventory has entered the market since Phase 2 began 82 days ago, and the days on market for properties with 83+ days on market is actually much higher than it appears as days on market counting was suspended between March 20th and the start of phase 2 of June 22nd. Currently more than 35% of active listings in Manhattan show 100+ days on market, which translates to 191+ days, or 6+ months that these properties have been on the market. Since Labor Day, some 455 Manhattan listings have reduced their price by a median 4.6%. Even so, there does not appear to be a magic bullet price that can ensure a swift sale for many of these properties.
Midtown Manhattan has been hardest hit across almost all metrics, with the fewest number of closings, longest time on market, and highest negotiability from initial asking (~7.0%). The Upper West and Upper East Side markets were not far behind in terms of negotiability, closing at a median 4.5% below last asking and 6.9% below initial listed price, with a median 52 days on market. Downtown listings saw less time on market – a median of 49 days – but closing prices were still a median 6.4% below initial list prices. Interestingly, closing prices were ~6% below BOTH last asking and initial listed price Downtown, indicating that Downtown listings saw fewer price reductions while on market.
It is not all doom and gloom in Manhattan, and it is possible the tides have started to turn already with the new season. Prices have not fallen catastrophically, even through the worst of this. As schools, offices, and restaurants re-open, buyers will return, and the market is expected to recover. In the meantime, "sellers need to listen, and buyers need to strike."
Brooklyn market metrics have been significantly stronger borough-wide. Of the 461 recorded closings in the last 30 days, 233 represented deals negotiated and entered contract post-COVID. These listings were on the market for a median of 44 days, and closed just 1.8% below last asking; 2.9% below initial listing prices. Brooklyn has seen fewer and smaller price reductions than Manhattan as well, with 329 price reductions since Labor Day with a median decrease of 3.9%.
Looking more closely at some of the major Brooklyn sub-markets, homes in neighborhoods like Park Slope, Prospect Heights, and BoCoCa (Boerum Hill, Cobble Hill and Carroll Gardens) closed with essentially zero negotiability, and the shortest amount of time on the market. The highest level of negotiability in the borough (and longest time on market) was found in the traditionally highest priced neighborhoods -- Brooklyn Heights, DUMBO, and Fort Greene (which also traditionally have the highest monthlies in the borough), as well as in South Brooklyn, which saw a wave of very low-priced single/multi-family home sales, possibly due to distressed sellers or landlords unable to ride out the current rental market slump.
UPDATE: A survey of 66 signed contracts since August 31 submitted by Compass agents is consistent with our analysis above. Here are the results:
Negotiability Rate off LIST Price:
Negotiability Rate off ORIGINAL LIST Price:
Days on Market:
Negotiability Rate off LIST Price:
Negotiability Rate off ORIGINAL LIST Price:
Days on Market:
Updated: Oct 27
The Isil Yildiz Team pledges to adhere to the highest safety standards to ensure the health of our buyers, sellers, tenants, landlords, and Team. We commit to fully comply with CDC and local recommendations, and go beyond where we are able to:
1. We will collect all COVID related health forms mandated by REBNY, including a health questionnaire, as well as building information acknowledgement where applicable.
2. We will practice social distancing at all appointments and require face coverings/masks to be worn at all times.
3. Where possible, we will ask that sellers leave the premises at least an hour before appointments and that they leave open windows.
4. We will escort all visitors to and from the lobby and avoid over-crowding. Visits to common spaces will be limited and conducted virtually where possible.
5. Only qualified and interested buyers will be given appointments. We are utilizing virtual options -- 360 tours and videos -- to the fullest extent to make sure that anyone visiting the property has the right expectations.
Virtual tours mean getting the right buyers for your property in the door.
6. We will provide hand sanitizer and clean our hands prior to the appointment and ask buyers not to touch surfaces during their visit leaving opening of doors/cabinets etc to agents.
7. For our listings, we clean and disinfect all areas that might have been touched (e.g light switches, door handles) and any other contacted surfaces inside the property upon the conclusion of each appointment.
8. We will send relevant follow-up materials to the buyer via email to avoid the use of printed materials requiring touch.
9. If you have special concerns or precautions you would like us to implement, our Team is here to make you feel comfortable.