NYC Real Estate Review 2021- Predictions vs Reality
It’s time for my NYC real estate review for 2021! Let’s take a look at whether or not my predictions panned out.
Prediction 1 – Tremendous Buying Opportunity, Especially for High End Properties
Reality – Banner Year for Sales, Including Luxury Sales
Manhattan and Brooklyn saw some of their best numbers ever in terms of contracts signed and deals closed. For example, in Q3 2021, Manhattan contracts signed were up 81% year over year. And most quarters in 2021 exceeded the pace of contracts signed in 2017, 2018 and 2019. In some cases, sales were at their highest level in more than several decades.
The surge was a bit more muted in Brooklyn, but that was primarily due to the market not having quite lost its “mojo” over the last couple of years the way that Manhattan did. Even so, the borough still saw contracts signed at a much faster clip versus both 2018 and 2019.
Record breaking deals also made a surprising return, with 9 of the top 10 deals in Manhattan coming in above $50 million.
Prediction 2 – Sellers, A Recovery is Coming, Slowly
Reality – The Recovery Did Come
As already noted previously, sales came roaring back. So anxious sellers no longer had to worry quite as much about properties lingering on the market.
But this was only the case if they got the price right. And pricing was a different story.
In Manhattan, the median price for a number of property types continued to decline, as sellers readjusted their expectations. Prices started to improve beyond pre-pandemic levels towards the end of the year. But most of that increase was driven by an uptick in luxury sales. And not all categories of housing saw a positive turn either, with studios and one bedrooms continuing to under perform.
Brooklyn demonstrated different trends, however. While prices did decline slightly in 2021, they recovered relatively quickly compared to Manhattan. In fact, Brooklyn was actually home to some of the best performing seller’s markets in the city.
Prediction 3 – LOTS of Choices and Negotiating Power for Renters
Reality – The Tables Turned on Renters Quicker Than Expected
The year started off with renters sitting in the proverbial catbird seat due to huge levels of inventory. Renters were securing great deals and lots of concessions in the winter.
But as vaccination rates picked up, office return dates were announced and people grew bullish on NYC’s prospects, things quickly shifted.
Inventory was snapped up at unprecedented rates, especially for larger apartments. For example, in Manhattan, February rental inventory stood at 19,610 listings. By July, it dropped by a whopping 48%. Concessions disappeared virtually overnight, and bidding wars caught lots of renters off guard.
Much to the relief of landlords, rental prices finally started their march upwards. And with low inventory levels persisting, that trend is likely to continue.
That’s it for my NYC real estate review for 2021.
What’s in store for 2022? Check out my next post where I share my own and expert insights on what might be ahead for NYC real estate in the new year.