May 2021 NYC Market Update

We have officially joined the rest of the country and entered a Seller’s Market. However, there are some key differences between what’s happening in NYC real estate versus what you’re hearing on the news going on in the rest of the country.

Contract signings topped 1,600 in April, continuing the sharp increases we have seen each month since the beginning of the year.

In Manhattan, 1,200 contracts signed in a month usually signal a very strong market. It’s hard to imagine how long this pace of demand can continue.

Pending sales also continue to climb, but at an even faster rate. Purchases are taking longer to close due to backlogs caused by the sheer volume of transactions.

Some banks have hired additional underwriters. Hopefully this will start to speed things up again.

What sets us apart from a lot of the country is that we don’t currently have a supply problem. Although contract signings are still outpacing inventory, there are over 7,200 homes currently on the market, a 3.5% increase over last month.

That’s due to the 2,315 homes that went on the market in April alone, a 26.2% increase over the new listings in March.

Allie’s Analysis:

-We have entered a Seller’s Market with demand at record levels. It seems unlikely that we can sustain this pace for very long, but it hasn’t slowed yet.

-If that encourages more homeowners to list their properties, that could actually help prevent prices from rising too rapidly and the bidding war nightmares throughout the country.

-Interest rates had ticked up a little, but trended down again last week. Either way, they are still hovering around the historic low of 3%, which is helping drive the demand.

-If you’re considering buying a home, I think conditions remain favorable and are unlikely to get better in not too distant future. 3% is still such an incredibly low rate and is likely to continue to rise, reducing your buying power in the future.

-If you’re thinking of selling or trading up, this could be a fantastic time to enter the market. Demand is extremely high while interest rates are low, giving people more buying power. Well priced homes are selling quickly.