If you ask sellers, you may hear that the real estate market is horrible
If you ask the New York Times, you may hear that the real estate market is capable of producing BOTH horrible results AND the highest sales prices ever in the history of the United States.
If you ask buyers, you will hear that the market is bad, but it will probably get worse.
If you ask owners in Long Island City, you’ll hear that the world is fully imploding after Amazon decided not to pursue its headquarters there…
If you ask me, or other brokers, you may hear that things are actually pretty active and not so bad!
We’re seeing a lot of activity in the marketplace, along with a lot of noise. People still want homes, and are encouraged by lots of news in the marketplace.
The baby is getting into shape!
As we did a review of 2018 in our firm’s annual meeting. Brown Harris Stevens sold nearly $3.7BB in residential real estate in New York City in 2018.
There are a lot of data points that are likely to help the housing market and help the market be better in 2019 and 2018. Meaning this- buyers, get out there and soon.
Currently, the economic signs are great. Jobs are being added, unemployment is at all-time lows across the US. Wages growing at fastest pace in 10 years.
Both NYC and US have 4% unemployment rates; There are more job openings than seekers 10 months running; 304,000 jobs added in January despite shutdown and December stock market dive;
Stocks are experiencing strong growth, with the strongest January in nearly 30 years.
Mortgage rates are down, offering more purchasing power for buyers; rates are at their lowest level in 10 months; the Fed is pausing rate hikes until needed, inflation under control – so little reason to think that mortgage rates are going to creep up much in the near term.
The shutdown is in the rearview mirror. Economic growth will get a boost as a result.
Uncertainty with tax liabilities of the new tax plan (12/2017) is almost 100% behind us. Notwithstanding clarity on certain tax changes via rulings, people know what their tax exposure is. Even if it’s higher, people like certainty, and they should have it, if they don’t already. Look at the end of 2016 with the election vs beginning of 2017. Even if people didn’t like the result, sales picked up substantially in 2017 after we knew who had won the election.
Prices continued to drift lower throughout 2018. Buyers who waited can now feel vindicated!
We still have Brexit and China trade deal to worry about, but China deal may be wrapped up soon.
There is a bit more confidence in the air, and buyers seem to be out looking right now to purchase something. Sellers may still need to calibrate or recalibrate pricing, but things are selling.
There are still many others who are far more negative, waiting for the stock market to crash, and for real estate pricing to continue to soften. The likelihood of a real downside event seems to be fading somewhat.
We’ll continue to track things, but given the pace of sales volume (with 4 $10mm+ sales put into contract last weekalone by my firm), it’s hard to make the really negative case. To put into perspective, in 2017 there were four sales above $20mm.