Four months of pandemic policies have produced a new breed of home-buyer who’s pushing up prices on the handful of properties being offered for sale in the neighborhoods where they now want to live.
New reports from the city’s leading residential firms show that while the number of sales across the boroughs have nosedived, prices are going up – everywhere but Manhattan.
“It’s like a game of musical chairs where only the best bidders get a seat. Both renters and move-up buyers who have held onto their jobs are vying for the small number of single-family homes on the market as they realize they need more space for their families,” said Taylor Marr, an economist with Redfin.
Coronavirus brought the once red-hot Brooklyn residential market to a grinding halt during the second quarter.
New numbers from Douglas Elliman show the number of sales in the borough fell to the lowest in a decade while a shortage of inventory pushed prices up to a new record.
“After a robust first quarter, the COVID-19 market shutdown during much of the second quarter caused sales to fall at their highest rate in a decade,” said the brokerage.
Compared with the same time last year, the median sales price rose by 0.6 percent to $820,000 with the average hitting $1,030,970. Listing inventory dropped by 21.1 percent to 2,686 units available during the quarter and the average home spent 116 days on the market before being sold at a 5.2 percent discount.
Just 1,525 sales were completed in Brooklyn during the quarter, according to Elliman, a drop of 40.5 percent compared to the same time last year.
According to Corcoran, 355 contracts have been signed since April 1 with each month since showing slightly improved numbers. The firm said, “A more accurate gauge of how prices changed during the shutdown will likely emerge next quarter when there are a greater number of closings for contracts that actually signed in Second Quarter 2020.”
The picture in Queens wasn’t much different. Sales declined at their highest rate in more than a decade as the market was largely shut down by the state mandate.
According to the Elliman report, the number sales dropped by 46.7 percent compared to last year to 1,610 with a tight inventory keeping prices propped up. The median sales price rose by 6.2 percent to $607,350 and the average sales price increased by five percent to $660,680.
Manhattan apartment sales fell by 54 percent during the second quarter of this year, according to Douglas Elliman’s 2Q report. 1,357 homes were sold during a time of the year that would normally see double that, at least. Manhattan was the only borough to show a drop in prices with the median down 17.7 percent to $1,000,000; Price per square foot down 6.8 percent to $1,642; and average sales price falling 10.2 percent to $1,881,512.
In it’s 2Q report, Compass also reported across the board pain in the borough sales markets, but noted signs things might be starting to turn around. Contract activity was 66 percent higher in June compared to April and, with in-person showings now allowed in the borough, the brokerage predicts an uptick in activity.
Compass reported that the pandemic has had a big impact on what buyers are now looking for in New York City home. Searched for single-family homes on the Compass website have jumped 40 percent since mid-March and searched for homes with pools have tripled since the onset of summer.
House-hunters also want more space, with searches tagging ‘average square feet’ and ‘outdoor space’ hitting an all-time high on the Compass site.
Nationally, bidding wars have been attributed to tight inventory and low mortgage rates. According to a new report from Redfin. Nationwide, 53.7 percent of Redfin offers faced bidding wars last month, up from 51.8 percent in May and 44.4 percent in April. Single-family homes were most likely to be part of a bidding war in June, followed closely by townhouses
“Bidding wars continue to be fueled by historically low mortgage rates and fewer homes up for sale than almost any time in the last two decades,” said Marr.
The average mortgage rate fell to 3.03 percent for the week ending July 9, the lowest 30-year fixed-rate number since Freddie Mac began tracking the statistic in 1971.
The number of homes for sale nationwide in June was down 21.3 percent from the year before, bringing inventory down to its lowest level since at least 2012 on a seasonally adjusted basis. The number of new listings was down 12 percent year over year.