It’s funny. I’ve been confident about calling the bottom of the market (back in November 2020, see here). I’ve been calling out the continued strength of the market. I’ve even just done a webinar to help people understand why NOW is the time to buy or sell real estate in New York (see here!). Our Third Quarter numbers were shockingly strong.
So why am I reluctant to state that it’s now a Seller’s market? I mean, our latest Inventory Report bears it out! Here are the quick numbers:
- Inventory is down 27% year over year.
- Sales Volume in the 3rd Quarter was the highest that it’s been in 30 Years
- The pace of sales nearly TRIPLED since October 2020.
- The market feels incredibly inventory contrained to most market participants – AKA buyers and sellers.
I think it’s my concern about where mortgage rates are going, along with a desire to help buyers remain enthusiastic. But the writing is really on the wall. What else can push this market further in the direction of sellers?
November 8th – Foreign Buyers will reenter the market
- Children will be allowed to be vaccinated very soon
- There’s a Mayoral election in a few weeks’ time that will finally put the nail in the coffin of the worst mayor New York has ever seen. Assuming Eric Adams wins, it will usher in a positive period of clean up and reflection on just how lucky we are to have term limits on mayors…
There’s no question that the enthusiasm in the market will be buoyed by more activity in the city, which will be added to and bolstered by these three things. Some are more ephemeral than others. I am most convinced that kid vaccines will be the biggest direct impact in the short-term, but all three will have real and psychological components to them.
For now, I will want to see a strong fourth quarter before I really call a seller’s market. That will include even stronger price appreciation, and lower inventory. If that happens, we better see a LOT of inventory hit the market in early 2022, or we’re going to have the same issues that we’re seeing across the country- actual issues with not enough inventory. There are simply too many people in New York ready to make a change. The number of apartments to take us from inventory constraint to abundance is fewer than 5000 people, maybe even only 2500 people. In a city with 8 million people, the zeitgeist plays an outsized role. The energy only has to move 0.15% of people in Manhattan to action. Tiny, tiny numbers!