Is it "last call" for the bottom of the market? |
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Is it last call? For those seeking to find "the bottom", likely so. In the end the bottom of the market may well be defined as October/November 2020, when the initial Covid deals started to actually close, reflecting the most extreme dislocation brought on by the pandemic. Post-election markets have typically surged. This time around it seems consistent, especially with the continued existence of innumerable buyer-favorable metrics. That said, several of these are about to change, meaning the “buyer’s market” leverage is shifting away.
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Buyers are beginning to feel a few gusts from a headwind. Sadly for many buyers they will not realize how good they have it until it all slips away from them. They have been able to pick up properties for nearly 10-15% off of their peak (on average) and in some cases between 20-30%. Note, this is just taking into account price.
Consider that interest rates had dropped nearly 2 entire points in the past couple years. As rates rise purchasing power erodes. We have experienced some of the lowest interest rates we have ever seen, but they have already begun to come off those lows. As the economy recovers the Federal Reserve will stop buying mortgage backed bonds, resulting in higher rates. So the high-2’s we have seen of late are likely to give way to mid-3’s. (See the chart below in the “Mortgage & Interest Rates” section to see what just 1% point does to your purchasing power).
Then comes the unquantifiable: competition and sentiment. Competition, or lack thereof, provided the opportunity to take one’s time to shop around, make low offers and have those, previously ignored, low offers actually get a response. Sentiment has been so negative that sellers have had to be very negotiable to secure buyers (a rare occasion in Manhattan). But with the vaccines arrival comes confidence and a sincere path to normalcy. This will bring more buyers back in to the fold and as a consequence strengthen sellers spines.
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At approximately 7,500, inventory is hovering in what would be the “high” range over the past several years; however, the pace of new supply does seem to be slowing. January’s new supply was in the 1,200s, which seems to be more in line with competitive years between 2012 and 2017. Further, deal volume is outpacing new supply, meaning the market is indeed strengthening. Deals are up substantially year-over-year; January 2021 saw 25% more contracts signed than 2020 and 40% more than 2019.
A few yet-to-be-determined factors: 1) Will the new Democratic majority roll-back the cap on SALT tax deductions? If so, that could be a positive bump in buyer perception and their desire to buy. 2) Will the suppressed rental market put downward pressure on sale prices, as buyers look to rentals as a better option? If they do, they will need to reconcile that decision with the once-in-a-generation opportunity they have now to buy.
So timing, as always, is everything. Increased market activity will present a healthy market for both sides to trade. Assemble a good team, which includes an attorney and a mortgage professional. And know that I am here to help you, or your family and friends, craft that team and plan for success.
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Prepare Your Property for Market with BHS's new program |
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Curate provides you with the ability to prepare your home for sale
with no up-front costs,100% payable at closing.
Services include Cleaning/Decluttering, Renovation, Staging & Design
and more. Contact me and/or click here to learn more.
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This week, we are joined by one of the titans of Manhattan's new development marketplace, Stephen Kliegerman. Since 2000, Stephen has been a member of the senior executive team at Terra Holdings - one of America's largest privately-held real estate services companies -holding several key leadership positions. He has overseen more than $15 billion in sales, representing over 10,000 units in the New York City area. He has also spearheaded some of the fastest-selling developments with the industry's most prominent developers and been lauded for achieving record-setting prices.
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Click here to see our recent show with Lisa Lippman & Curtis Jackson
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Click the button above to see the latest edition of our post-lockdown deals report, as of 1/26/21. The purpose of the report is to give you verified pricing data on deals negotiated after the NYS lockdown began on March 22nd. This is not meant to be a count of deals signed since the lockdown, as many of those haven’t closed yet.
To be included, a sale must meet all the following criteria:
1) Listed through the RLS, by all firms.
2) Have a contract signed after March 22, 2020
3) Closed and recorded on ACRIS
The spreadsheet, accessible through the above link, is a running total we add to each week. Keep in mind some sales may drop off if we find out the contract signed date was incorrect. Be sure to click on the respective tabs for each borough at the bottom of the document.
Below is a comparison of the data in this report to the same period last year:
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These are great local resources, especially at times like these. Here are some of the best and most comprehensive neighborhood blogs that are helping to keep us informed. Click on each. |
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With Patch you can choose New York City; however, they also have more concentrated areas categorized as follows: Central Park, Upper West Side, Upper East Side, Midtown-Hell's Kitchen, Harlem, Astoria-Long Island City, Chelsea, Gramercy-Murray Hill, West Village and East Village.
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Connecticut you Ask?
Let's Ask John Engel and his Team
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* MORTGAGE & INTEREST RATES * |
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Rates are at near historic lows |
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Example of Purchasing Power
Interest Rates:
Example below reflects today's 30 year fixed rate of 3.000% vs. 4.625%, just couple years ago.
$1M borrowed at 2.750% = $4,082/month
$1M borrowed at 4.625% = $5,141/month
That is a difference of $1,059/month or $12,708/year.
Alternatively, we could look at it this way:
At 2.750%, $4,082/month will afford you a $1M mortgage.
At 4.625%, $4,216/month only afforded you a $794,000 mortgage.
That is 20% more purchasing power than 2 years ago, just because of interest rates.
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* Most Recent MARKET REPORTS * |
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The Latest Market Reports - Sales:
Hamptons' & North Fork Year End (2020): click here
Interactive Rent vs. Buy Calculator:
Other Markets:
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Shuzo Azuchi Gulliver’s
"Cinematic Illumination"
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Cinematic Illumination brings the 1960s to life on a large scale, interweaving the international history of avant-garde art, experimental approaches to film, and the meeting of art and technology in nightlife spaces. Experience this spectacular installation, now on view in MoMA’s Kravis Studio, as part of our Virtual Views series, and enjoy an immersive 360° video of the work, a live online Q&A between curator Sophie Cavoulacos and scholar Miwako Tezuka, a Gulliver-inspired playlist by Cibo Matto’s Miho Hatori, and more. Read more here.
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By Eater Staff
More than nine months into the pandemic, many restaurants are juggling cold-weather outdoor dining efforts alongside a return to indoor dining at 25 percent capacity. As New York City works to contain the spread of COVID-19, many more restaurateurs are feeling emboldened to move forward with openings.
Dozens of new restaurants have opened in recent months, a remarkable change from earlier this year when many businesses pushed back their launches indefinitely. As New York City settles into this new reality, Eater is highlighting new restaurants in Manhattan — and a few old favorites — offering a mix of outdoor seating, indoor dining, delivery, and takeout, that have opened in the last few months.
New to the list in January: Bánh Mì Cô Út (a Vietnamese sandwich shop in Manhattan’s Chinatown), The Migrant Kitchen (the Arab-Latin pop-up which moved to the Financial District), Chito Gvrito (a Georgian restaurant nestled in between Gramercy Park and Union Square), and Galioto’s (a vegan Italian deli in Little Italy). This list will be updated weekly.
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The closing of Sammy's Roumanian' Steakhouse by Robert Rosenthal
Blame It on the Alcohol
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Some restaurant closures hurt more than others. It’s not always about the food itself, although it’s often the key element. To a guy who has eaten at over 4,000 restaurants across six continents, the losses that sting most are the classics. Take NYC’s 21 Club, for example. Not the world’s finest food, but an incomparable feeling of being immersed in New York City Prohibition-era history. And a killer martini.
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The Food Humorist©, is a Manhattan born man-about- town who writes, produces and hosts programs about food. I highly recommend his new book for Dads like myself. There is a new kind of dad, and he's doing far more domestic duty than at any time in history, including cooking. Although it's written with a sense of humor, this book is a serious resource for dads and anyone else interested in upping their game to make great tasting foo d bat home, even if they have never used a chef's knife or a roasting pan before.
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PRIVATE ONLINE COOKING CLASSES:
Ask Rob about his privates…by which he means that he offers customized cooking lessons to individuals and to groups. You learn, you laugh, and you eat well.
Now that ALL of us need to pitch in when it comes to feeding the family, I suggest picking up some serious tips from Rob. As he says, he went to cooking school so you don't have to. These sessions are fun and literally provide prized skills for upping your game. Enjoy. See Rob's intro here.
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* G R A F F I T I - Cooking @ Home * |
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New York City * The Hamptons * Palm Beach * Miami |
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With Partnering Worldwide, Brown Harris Stevens continues to leverage its very productive relationships with top brokerages nationally and internationally by inviting partners to high- light key properties in their respective markets on BrownHarrisStevens.com, and to feature our important properties on their sites. Learn more.
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- Recognized by New York Magazine & Five Star Professional as one of the "most accomplished real estate professionals in New York City."
- Ranked nationally by REAL Trends as one of "America's Best Real Estate Agents" for avg. sales price of $4.350M.
- Recognized member of the 2016 "TOWN Elite" class
- Sold a single family Townhouse faster than any other on the Upper West Side over $10M to date. (StreetEasy)
- Certified Negotiation Expert (CNE)
- Trivia: Won the 2015 New York Times NCAA Basketball Pool.
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Roberto Cabrera
Licensed Associate Real Estate Broker
New York City * The Hamptons * Palm Beach * Miami
rcabrera@bhsusa.com
o: 212-906-0554
m: 917-701-3907
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Brown Harris Stevens
130 Fifth Avenue, 2nd Floor,
New York, NY 10011
(917) 701 3907
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