Just two days ago, it was a slushy ice storm, and now it’s 50 degrees, just in time for a lovely lunch with my team. I could not be more pleased to talk about month’s Brown Harris Stevens Inventory Report, which you can check out here.
What will you see? The report shows that for FIVE STRAIGHT MONTHS, straight through the Fall Season- which is the second busiest season of the year- inventory dropped. We are back to levels that we saw in August. I called the bottom in November. I was very clearly seeing a strengthening of the market. Since then, things have just kept moving in the same direction. January was the busiest month for signed contracts over $4mm since 2014. The pentup demand, and delight in the current market pricing, along with low mortgage rates… have created quite an active market.
We have accepted offers, not just offers, on nearly all of our listing inventory. It was not that long ago that I was kvetching about it not being an inventory problem or a demand problem, that it was just a pricing problem. And now? Any property that has sat on the market THEN gotten a decent price reduction? It’s getting multiple offers.
We just put a gorgeous four-bedroom property on the market three weeks ago at $3.995mm (video here!). Eight offer later, we have signed contracts above the asking price. The same building had two other units on the market for MONTHS, and within two weeks, every unit in the building is in contract, too.
Another unit in the neighborhood was on the market for close to $4mm, and needed a full renovation, but had full-on Hudson River views. Price gets dropped to $3.375mm? The property sold close to $3.7mm. I’m telling you – There has been a sea change in the market.
The report you’ll see shows that year over year, the one segment showing a nagging Year-over-Year increase in inventory in every neighborhood is just the smaller units. That is, one bedrooms apartments are taking longer to sell. And that makes sense. Younger professionals have yet to return in earnest to the city, much less the market.
Otherwise, we are witnessing a resurgence of contract activity to accompany the inventory absorption. As we approach the Spring, this is encouraging news for sellers. Prices still remain significantly lower the peak in 2016, which is a great sign for buyers as well.
A reporter asked me, “If you see price appreciation around the corner, shouldn’t sellers wait?” My response was this: “That’s funny. With this logic people would wait forever. Spring will be the bellwether. We are already seeing modest appreciation in some pockets. A seller can opt to take advantage of pent up buyer demand and low mortgage rates now.”
What I didn’t say was that we have no idea what’s going to happen to people’s stock portfolios. Should the equity market continue as it is, and an apartment owner is trying to sell, then buy, the timing is great. They can get a slightly higher price than they could have six months ago, and if we see more accurately-priced homes in the Spring, they can find something they love that works for them today. If the equity market shifts downward, they purchasing power may shift down as well, and mortgage rates won’t stay at these levels forever.
If you would like to learn more, be in touch with us! There’s never been a more important time to be VERY well informed about the NYC Market. -Scott