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With the Fall market now behind us, two major trends have emerged. First, there continues to be the tale of two Manhattans, mostly dictated by location, with some properties going quickly and at pre-Covid prices and others that continue to languish on the market with little interest. Second, the narrative of Manhattan vs. Brooklyn has shifted. While early data painted the picture of a struggling Manhattan and resilient Brooklyn, contracts and closings since October 15th indicate that some areas of Manhattan are seeing a marked return of buyer interest.

In Brooklyn, which has been relatively more stable, there has also been a gradual uptick in days on market and price reductions/negotiability.

In Manhattan, total contracts signed from October 15th to December 15th was higher compared to the same time last year, a promising sign coupled with a rebound in number of closings, down just ~37% from 2019 levels since October 15th (compared to ~67% during the first 4 weeks of Fall). As a reminder, closings are a lagging indicator, so most closings in late Fall reflect deals that went into contract between July and September. Given the uptick in activity and contracts (especially since the election), we would expect the closings indicators to be even stronger in early 2021.


Downtown gained momentum throughout the Fall season, with declines in days on market, fewer price reductions, and faster absorption than any other Manhattan sub-market. Currently, downtown listings make up less than 30% of active inventory, yet made up 36.3% of closings and 32.3% of signed contracts between October - December 15th. The Upper East and Upper West Sides also saw a healthy uptick in closings compared to earlier in the season, as well as a modest decline in days on market. However, recent Upper East & West Side sales came at significantly greater discounts than earlier in the Fall, with median negotiability increasing from 2% below to 6.3% below last-asking.

The Midtown market remains the hardest hit by COVID, with significantly fewer closings, longer days on market, more price reductions, and greater negotiability than any other Manhattan sub-market. More than 42% of Midtown listings sold since October 15th reduced their asking prices before entering contract (by a median -9.1%), and still closed a median 4.3% below last-asking.

There has been much positive press about the Manhattan luxury market in recent weeks, which had been in decline since long before COVID. In the three weeks following Thanksgiving this year, more $4M+ contracts were signed than during the same period last year, indicating that some luxury buyers have been enticed back by low interest rates and further price reductions in the late Fall market.


In Brooklyn, negotiability, price reductions, and days on market have remained much lower than in any part of Manhattan, but these indicators have gotten weaker as the season has progressed. Since October 15th, days on market and % of listings with price reductions while actively listed increased for homes sold across all sub-markets compared to closings during the first 4 weeks of Fall. Notably, the % of homes sold in BoCoCa (Boerum Hill, Cobble Hill & Carroll Gardens) that reduced asking price before entering contract more than doubled, and homes in all sub-markets other than South Brooklyn saw at least a 10 day increase in median days on market. While the Brooklyn market remains much stronger than Manhattan overall, the urgency that fueled bidding wars and made over-ask sale prices the norm in much of Brooklyn has faded, and Brooklyn sellers have increasingly had to adjust pricing and expectations in order to engage buyers.


Looking ahead, the NYC sales market is traditionally quiet from mid-December through February, although it's hard to predict if this will remain true this year. Anecdotally, the momentum in buyer activity since the election has not yet ebbed, buoyed by optimism for the vaccines, low interest rates, and the perception that the worst for NYC real estate is already behind us.

Our current expectation is that, except for the 2-3 weeks right around the holidays, the market is likely to be far more active this Winter season than in previous years. While we expect activity to be strong, rebounding to pre-COVID (or peak) pricing will take some time as increased buyer confidence will likely be counterbalanced by an influx of new inventory this Spring.

Updated: Mar 4

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, 2020

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:

Manhattan

  • Negotiability Rate off LIST Price:

  • Average: -5%

  • Median: -4%

  • Negotiability Rate off ORIGINAL LIST Price:

  • Average: -9%

  • Median: -6%

  • Days on Market:

  • Average: 114

  • Median: 59

Brooklyn

  • Negotiability Rate off LIST Price:

  • Average: -2%

  • Median: -2%

  • Negotiability Rate off ORIGINAL LIST Price:

  • Average: -3%

  • Median: -3%

  • Days on Market:

  • Average: 64

  • Median: 47

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