Here’s a look at my 2021 NYC real estate market predictions. A year that’s sure to see a LOT of movement in the market!
The luxury segment of the market ($3 million+ in Manhattan and $2 million+ in Brooklyn) will continue to have lots of opportunities. Really, really BIG opportunities. Price cuts. Additional perks. Deal concessions. You name it.
And there’s a huge surplus of apartments with some new inventory still slated to hit. It’s going to take a LONG time for that to be absorbed. As a result, developers are going to be eager to move properties as quickly as possible.
Additionally, the threat of a pied-a-terre tax may put a further chill on the luxury market. But this could be good news for those looking for a primary residence. It may mean less competition from out of towners.
Some key exceptions to the deal bonanza – townhouses and apartments with private outdoor space. These properties not only went up in demand, in some cases they went up in price. So if you’re hoping to buy one of these, be prepared to compete for them!
Finally, big price cuts are less likely for people looking below the $2 million mark. But there’s still a lot of good reasons for buyers to look for a home in the coming months:
While 2020 ended on a very strong note for sales (with contracts signed up year over year), prices are likely to remain muted for a while due to the historic level of inventory across property segments.
But that being the case, sellers should take heart that prices didn’t actually move THAT much year over year during the 3rd and 4th quarter in a number of segments.
The reason? The baseline comparison for Q3 and Q4 2020 was Q3 and Q4 2019 – a time when sales were really sluggish due to fall out from the mansion tax.
And more good news – spring is poised to be a very active season this year. Signed contracts are likely to continue their upward trajectory and, with time, this will start to lift prices. The question is how long it will take before they start reaching pre-pandemic levels again. So this year may turn out to not be such a bad year to sell (and p.s. here’s what to consider if you’re thinking of selling).
Real estate predictions for the rental market in NYC in 2021 track along with the sales market.
Interest in the rental market is coming back, based on the huge increase in lease signings towards the end of 2020. But there’s still a historic level of inventory which will take months and months (or longer) to bring back down to normal levels.
And further, winter is typically the slowest season for rentals. So renters for the next few months can expect to have a lot of bargaining power.
But NOT when it comes to properties with highly desirable amenities (i.e. private outdoor space, home office, etc). You still might get a better price on these kinds of properties compared to past years, but you need to be prepared to face stiff competition for them.
If you’re not looking to move early on in the year, don’t fret too much that you might miss the boat. Prices are likely to continue to be low through winter and the spring. There’s a chance we might see an uptick in the summer IF the vaccine rollout is successful and infection rates decrease accordingly. But even so, prices are still going to stay well below what they were in previous years for quite some time to come.
To sum up – 2021 is set to be the rare year where both buyers AND renters will have great opportunities to finally get what they want in a home. Sellers and landlords will certainly be less thrilled with the market. But well priced, desirable properties are likely to still see solid interest.
Here’s a round up from around the web of other predictions for the 2021 NYC real estate market from industry experts.
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