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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