New York City is known for a lot of different things. Bustling crowds, street pizza, fashion, sports, entertainment. But affordable real estate? That is definitely not something New York is known for. 2020 was a strange city for New York City, as the “is New York dying?” narrative took off following COVID.
NYC was the first major American city to be hit hard by the pandemic, and many fled the city because of it. Sales of homes in the suburbs rocketed, as did sales in other markets like Florida and Texas, which benefited from a Northeastern migration. However, moving into 2021 as things begin to stabilize, sales in New York might begin to pick up some steam as buyers clue into the new opportunities in front of them.
Something that fuels competition in a market is when there is high demand and low inventory. This drives prices up and creates a sellers’ market as people are forced into bidding wars to get the homes they desire. This is the opposite situation that is occurring in New York. High inventory is fueling declining prices, as buyers have more options and less competition. This is bad for developers but great for prospective buyers.
New York’s luxury market has had its strongest post-Christmas week since 2006.
According to The Real Deal, the Manhattan luxury real estate market suffered in 2020. There was a 31% decline in signed contracts, and condos, co-ops, and townhouses all experienced a decline. This was because the demand for luxury real estate in New York was experiencing a COVID-induced lag. It makes sense, the pandemic brought about some serious claustrophobia and city anxiety. However, as we move into a time where more and more people get vaccinated, the city will have a resurgence.
This has already begun to start in 2021. According to a different report by The Real Deal, New York’s luxury market has had its strongest post-Christmas week since 2006. Buyers cut 17 deals over $4 million between December 26th and January 3 rd , including one penthouse which was last listed at $35 million. This is a promising sign as the new year begins and New York’s real estate begins to pick up some momentum.
Low-interest rates, mortgage rates, and the easing of restrictions on real estate activities within the state are likely to fuel buyer interest. As well, according to The New York Times, along with the rising inventory, a lack of foreign investment is also impacting the real estate market to reduce prices. Bloomberg predicts that 2021 will continue the trend of price dropping in the luxury market, which is a great way to fuel buyer interest. There will be bargains abound in New York City for the first time in what feels like forever.
New York City has had a tumultuous 2020. Residents fled to more spacious and less populated areas, the economy suffered, and the city endured its fair share of think-pieces about its decline. But as a new year begins, and prices are as reasonable as they’ve been, the momentum that the market has carried into 2021 will likely continue. This hopefully won’t drive prices up, considering inventory is so high.
New York City is not a place that has been associated with bargains in housing, but in a post-pandemic world, anything will be possible, and it looks likely that there will be great bargains in NYC for those savvy enough to grab them.