We recently came out with our September Inventory Report, which you can check out here.
The biggest change was that even Midtown, the neighborhood that has taken the longest to see the impacts of a recovering New York, has seen a drop in inventory. This is encouraging, to say the least.
I’m encouraged because a year ago, inventory levels were nearly DOUBLE what they are today. There were nearly ten thousand apartments on the market then, as of September, it was down closer to FIVE thousand!
There are a couple of trends to note. See here: First, in the last three weeks, there have been roughly two thousand apartments added to the market. HOWEVER, during that time, about a thousand apartments went into contract, and another similar number of units were taken off the market.
There are always properties that do not sell. However, sellers whose apartments were lingering decided to try again soon, or later, when the market is more receptive. Some of these buyers overpriced their units. Some have apartments that need a lot of work.
Some sellers have been frustrated as they just don’t understand how in the macro, that the market is moving, but certain properties aren’t. It will, as always, come down to case-by-case marketing, pricing, and branding. Just like with dating, timing can play a big role, too.
Buyers can’t just swipe right or left in today’s market. While I anticipated enough of a spike in inventory to really help our buyers to find that perfect home, I was surprised by the dearth of what hit the market. What has happened instead is a continued need for buyers to make quick decisions- and in many cases, to duke it out in bidding wars.
It has gotten to the point where if I don’t point out which properties are well-priced- and the buyer got distracted by life, even a delay of one day might cost them the apartment.
I actually only have one idea as to why the inventory hasn’t materialized- it’s that sellers are not getting the memo! So, let me be the one to share with you. Spread the word- we need more listings! This has been an issue in the suburbs, but there, it’s been accompanied by a 20-50% increase in prices year over year. Here’s those gains have been much more muted, and current pricing is still below market peaks.
Green shoots! Just not enough of them!
As always, I would guess that every seller will act simultaneously- which may act as a counterbalance to future price appreciation in the near term. I am encouraging sellers to act NOW. Good properties, well priced, are selling quickly.
I’ll add one more thing. I remember this old song from summer camp, “Where have all the flowers gone?” as I think of my initial question. Turns out Pete Seeger was singing this sad anti-war song, how things seem to stay the same, and everything works in a cycle. Old is new, and things change, but not really.
Well, there isn’t much the real estate market has in common with flowers, except that the construction cranes are making these buildings grow again, and, like flowers, New York is growing again. The anti-war sentiment never left New York City, it would seem. Plenty has changed, and plenty has stayed the same. The cycle seems to be moving again towards another peak.