What are New York City buyers looking for? What are they likely to buy, and how much will they want to pay for it? What neighborhoods and property types are hot? Here’s my post-lockdown primer on what, where, when, and how much:
- What? Agents already see that the majority of deals being made are at lower price points. The inventory at $2 million and below began moving as soon as showings were permitted again about a month ago. These buyers see opportunity, and many of them have gone back to work, so they are in the city. They want to ensure that they enjoy a better home if and when they are obliged to quarantine again. Larger and more expensive units have not jump-started in the same way; those buyers, often family groups, have not decided when to return to the city from wherever they are. Some are already enrolling their kids in local schools in Westchester, Connecticut, or the Hamptons in anticipation that schools in the city won’t open for in-person learning.
- What, Part two? Even though the city’s virus caseload is way down, workers remain careful and circumspect, as do building managers. These cautions will likely produce a slower and more careful process in both the review and execution of construction and renovation plans. This in turn will impact the popularity of unrenovated apartments, already on the wane before the virus hit, regardless of size. And while agents still recommend staging, especially for properties in need of renovation, a basic clean-up and paint job is essential. The walls need to be white, the musty rugs or carpeting taken up and the floors shining. The property has to look easy, now when everything feels so hard.
- Where? Brooklyn remains hot. The retail and dining scenes there, while under pressure, have always been more modest and casual than in Manhattan, which has enabled many local places to survive and anchor the neighborhoods they serve. Maybe even too much so, as the recent maskless parties in Williamsburg seem to indicate. So too with the Lower East Side, Tribeca, Washington Heights, Inwood, and much of Harlem – each of those neighborhoods remains sought after for relative affordability and neighborhood feel. The historic co-op neighborhoods of the Upper East and West Sides, with their larger apartments and more arbitrary Boards of Directors controlling who may purchase a unit, seem likely to recover more slowly than many of the younger, hipper, more condominium and rental heavy parts of town.
- When? For the smaller units, the time is now. A properly priced one or two-bedroom trading at $2.2 million or less will probably move fairly quickly. For the larger units, it’s hard to say what the right time will be. Those which are on the market now receive little attention, and most of the larger deals being signed, even now, had their origins in showings which began before the city shut down. Not enough data exists yet to predict the comeback for larger properties. It’s a buyer’s market, especially for that listed pre-pandemic. Many of those sellers just want out.
- How Much? Today, the discounts increase as the prices ascend. The studio and one-bedroom markets, priced below $1 million, have seen full-price offers and even some multiple bids during the past four weeks. Although rental inventory is high, the market is also seeing a steady stream of signed leases, especially at $10,000 per month and under. At the higher price points, demand falters. Many properties, especially in the range of $5 million and above, receive no requests to show week after week. So the serious seller of a larger property must be prepared to discount at least 10%, and probably more, from pre-COVID pricing. Overall indicators in the market suggest a blended average contract price at 8% to 10% below February levels.
We are still in the early stages of our new reality. If New York can maintain its safety protocols and keep viral infection rates low, history suggests that a gradual recovery in higher-end sales will follow. But for now, so early in the process and surrounded by so many unknowns, the market will watch and wait.