January 2022 Market Update
The NYC real estate market has been off to a strong start in 2022. In Manhattan, low inventory and strong demand has pushed median prices up (+4.8% vs last month and +21.1% vs January 2021). As expected, this has meant shrinking days on market (-14% vs. January 2021) and much less negotiability. The average discount for closed sales in January was an astounding 3%, far less than the average discounts we saw the month before (6%) and in January 2021 (11%). While fewer contracts were signed, the ratio of signed contracts to available inventory was much higher. January also saw marked growth in the Manhattan luxury market, with signed contract activity up around 20% compared to January 2021, up 35% from January 2020 (pre-Covid) ... and up close to 65% from January 2019! With three quarters of steady growth across all sale metrics, all signs point to the end of the “Covid market” in Manhattan.
In Brooklyn, the inventory crunch was felt even more acutely and prices are yet again on the rise. There was an uptick in new listings in January, but total inventory is still at the lowest levels since we began tracking the market.
This trend of growth in the borough is nothing new, and the Brooklyn market lost little (if any) ground even during the worst of the pandemic. Going into 2022, the Brooklyn market was already breaking records: In the last quarter of 2021, the average closed sale price in Brooklyn was up 11.7% vs. the same time in 2020, median sale prices were up 7.5%, and a staggering ~20% of all sales closed over-asking. So far, 2022 seems poised to continue that growth. The average sale price last month was up 4% compared to December and up 15% compared to January 2021. Average days on market also decreased, down 5.5% compared to December and down a striking 14.9% compared to January of last year.
Rentals hit an all-time high average price of $3,400 in December, and we expect that prices will only continue to rise in coming months due to low inventory, increased demand, and a boomerang back from concessions given on leases signed prior to May 2021. Inventory was very low last month – there were about 50% fewer new listings compared to January 2021, and while more inventory should become available in coming months, we expect this will be offset by an increase in demand from renters who are priced out of the sales market and the last wave of returning workers finally coming back to in-office work.