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May 2020 NYC Real Estate Update: Current Market Trends & Expectations

As the first few regions of New York enter Phase 1 of the State’s re-opening plan, I wanted to share some data on where the NYC real estate market is now, and what we may see in the second half of 2020.

Current Market Conditions

Since the “NY on PAUSE” order began on March 22, agents have been extremely limited in their ability to list, market, and show properties. While some transactions have taken place, most have been closings of deals that had been negotiated before March 22nd. From mid-March through the end of April, very few new sales listings entered the market, and many active listings were temporarily de-listed. Agents are not permitted to show listings in-person, and even when this restriction is lifted (possibly in mid- to late-June), we may see many buildings continue to restrict the access of real estate agents.

Since May 1, we have seen a handful of new listings come to market – there were 37% more new listings the week of 5/4 than the previous week -- but overall new listings are still down about 78% compared to last year. Most new asking prices appear to be at pre-COVID levels and we have not seen price reductions on existing inventory; however, this is not an accurate reflection of where we expect prices to be as (1) it is premature for price reductions when showings are limited/non-existent, and (2) agents/sellers expect most new offers to be significantly below ask and for sale prices to show greater-than-usual negotiability.

There is very little hard data, but we have received the results of a few surveys that provide us with some preliminary insight on negotiability. This data is not comprehensive, as it only includes responses of brokers who opted-in to respond, but I find it useful nonetheless. These surveys suggest that prices will begin to trend ~ 5-10% lower as real estate activity resumes. It’s also clear that a fair number of buyers expect greater negotiability and discounts, which sellers still seem unwilling to accept.

Halstead Survey - Based on 105 offers self-reported by agents between 3.22 - 5.8:

  • The average difference between ALL offer prices and ALL ask prices was 13.79% (105 replies)

  • The average difference between offer and ask in deals that were ACCEPTED was 6.78% (40 replies)

  • The average difference between offer and ask in deals that were REJECTED was 18.10% (65 replies)


  • The average difference between ALL offers and ALL asks was 15.59% (76 replies)

  • The average difference in deals where offer was ACCEPTED was 7.25% (26 replies)

  • The average difference in deals where offer was REJECTED was 19.92% (50 replies)


  • The average difference between ALL offers and ALL asks was 9.09% (23 replies)

  • The average difference in deals where offer was ACCEPTED was 4.93% (13 replies)

  • The average difference in deals where offer was REJECTED was 15.08% (10)

Thank you to Fritz Fagan, Exec. Director of Sales and Leasing for Halstead Manhattan, for sharing this information.

Compass Negotiability Survey 3/16 to 4/15 - Based on 61 offers self-reported by agents (includes both accepted and rejected offers):​

In MANHATTAN (39 offers):

  • 15 offers < 4% below-ask

  • 12 offers 4-9.91% below-ask

  • 6 offers 10-15% below-ask

  • 3 offers 16-20% below ask

  • 3 offers +21% below-ask

  • 69% of all offers made were <10% below-ask

In BROOKLYN (22 offers):

  • 12 offers < 4% below-ask

  • 6 offers 4-9.91% below-ask

  • 2 offers 10-15% below-ask (both for townhouses priced $2M-$4M)

  • 1 offer 21%+ below-ask (for a +$2M condo, not accepted)

  • +82% of offers made were <10% below-ask.

Compass Survey for Offers Made 4/15 - 5/15 - Compass later changed the survey questions and methodology, and the more recent survey tied the negotiability to results. Based on 119 offers self-reported by agents:

In MANHATTAN (79 Total Offers):

  • 52 offers (66%) were SUCCESSFUL (meaning they led to an accepted offer)

  • 27 offers (34%) were REJECTED

  • 38% of ACCEPTED offers were <4% below-ask

  • 85% of ACCEPTED offers were <10% below-ask

  • 78% of REJECTED offers were >10% below-ask, and 56% were >15% below-ask

In BROOKLYN (40 Total offers):

  • 30 Offers (75%) were SUCCESSFUL (meaning they led to an accepted offer)

  • 10 offers (25%) were REJECTED

  • 50% of ACCEPTED offers were <4% below-ask, another 47% were 4-9.9% below-ask

  • Only 1 ACCEPTED offer was +10% below-ask

  • Only 4 REJECTED offers were <10% below-ask, while 60% (6 offers) were >10% below-ask

Expectations for 2020 Market Activity

With the current drought of listings, the big question is when will new listings come to market and how will negotiability, buyer interest, and overall sales activity change throughout 2020. Currently, I’m expecting to see two bursts of listings:

Mid-to-Late June --

Hopefully NYC’s infection data will continue to decline over the next few weeks, and we will qualify to enter Phase 1 of the State’s re-opening plan by mid-June. This will allow construction, manufacturing, and wholesale business to resume. Assuming infection rates and other metrics remain stable, we could be ready to enter Phase 2 – which includes professional services such as real estate – a few weeks later. In Phase 2 we expect there to be a significant uptick in sales activity. My expectations for this period are as follows:

  • There are many listings in queue, and while there is some pent-up demand in the market, the rush of inventory will likely outpace this demand.

  • Listing prices will likely be similar to pre-COVID, as there will still be very limited closed sale data that reflects transactions made during the pandemic.

  • Most offers made/accepted will likely be lower than ask.

  • To the extent there are buyers out there in June, they will be looking for deals.

  • Many buyers (and sellers) will opt to "wait and see" through the summer.

  • Activity and demand in the market will likely vary widely by price-point, with the higher end of the market (+$2M) seeing far less activity than the <$2M market, especially as many of these buyers have left the city for the summer.

Early September (after Labor Day) –

Given the talk of a possible resurgence of the virus in late Fall, I expect most sellers will opt to list ASAP in September to get ahead of a potential second wave. Everyday life may be somewhat back to normal at that point, and buyers are likely to feel more comfortable with their financial and job security, especially if the economy is on the mend.

  • It will be significant for both buyer and seller confidence during this period if we have evidence of improved treatments/prognosis for COVID-19, especially if these indicate that a significant resurgence is unlikely.

  • Even without this, if schools have opened back up, many more prospective buyers will have returned to the City.

  • This should result in an increase in demand, although lingering economic uncertainty and quality of life issues may mean that some buyers are still hesitant to pay premium prices.

  • We can also expect to see an adjustment in listing prices due to a new wave of closed sale comps from the Summer months that will be available come Fall.

Expectations for Pricing in 2020 & Beyond

Overall, I expect that inventory will exceed demand for the remainder of 2020. While many sellers will try to wait out 2020 with the hope of listing in a more settled market next Spring, there will inevitably be a backlog of properties with sellers who just can’t wait – and most of these properties will be listed at essentially the same time. Also, while mortgage rates are still very low, sellers are still likely to have a more limited pool of buyers, as lending standards have tightened. It is significantly harder for buyers with low liquidity to qualify for loans, and most major banks are unwilling to lend more than 80% LTV (20% down).

It’s hard to say what effect this will have on prices market-wide. Some agents fear adjustments of 15+% across the board. Noah Rosenblatt of Urban Diggs predicts 10-15% (maybe more for higher priced properties) dip over the summer reflecting closed sales where the negotiations took place during COVID for sellers that had to sell, he expects a bounce back to half those levels over Fall, and then a gradual recovery to pre-COVID levels by next Spring.

My expectation lies somewhere in between. I don’t think there will be a sustained drop in prices over 10% for most properties. I think a 5-10% drop for Manhattan resales is a reasonable expectation over the next year, but I expect we will also see significant variations based on product type (co-op, condo, townhouse), location, and price point (higher end affected more than lower end). Homes with lower monthly charges, outdoor space, and washer dryer in unit will likely fare better than others. Price volatility and time to recovery will be impacted by these considerations, and it might take longer than next Spring to see an across the board return to pre-COVID levels. Although we anticipate a normalization of buyer behavior by early 2021, supply may continue to outpace demand as 2020 listings catch up and we potentially see additional new inventory due to the effects of COVID.

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