Welcome to my 2018 preview of the upcoming spring season for buying and selling real estate in NYC. Market reports and the media tend to be reactive so I wanted to express some thoughts that are more predictive. Although, apartments are bought and sold year round the main buying and selling seasons in NYC are the spring and fall months. These two time periods give us the best indication of the market.
As such, here are some thoughts about the spring market 2018:
1. Higher Inventory
Inventory in Manhattan has gone up rapidly. The end of February featured over 5400 apartments on the market, which is the highest amount of inventory on the market for this point in the year since 2012.
Based upon looking at historical data combined with the current economical environment, my projections for Manhattan inventory at the end of the following months are below.
2. Contracts Signed Slowing
Since the tax bill became a focus late in 2017, we have now experienced three consecutive months of year over year decrease in contracts signed in Manhattan. Are these buyers who disappeared from the market when the tax bill was getting all the media coverage coming back into the market or staying on the sidelines? This is perhaps the biggest question with regards to the upcoming spring market. Out of the past five years when looking at the time frame of March to June only two of the twenty months had number of signed contracts dip below 1000. However, I project that contracts signed will dip below 1000 for at least two of the next four months.
3. Increasing Days On the Market- Higher Discrepancy Between Buyers and Sellers
One of the signs between higher discrepancy between buyers and sellers is increasing days on the market. In an increasing days on the market environment there are more stale listings on the market. More stale listings translates to more leverage for buyers when making offers. This past February shows the trend of increasing days on the market.
As such, based upon data of past trajectories of days on the market, I am predicting the following:
Please note on the above projected chart, it is typical for days on the market to decrease over the spring months. However, these projected numbers are up from the past few springs.
4. Trading Up Opportunities
The following types of apartments in neighborhoods below are experiencing lower inventory than one year ago. In addition, the next product size up is experiencing higher inventory than one year ago. Therefore, there are favorable conditions to sell and then buy a bigger size apartment
Greenwich Village – Sell One Bedroom Coop and Buy Two Bedroom Coop
West Village- Sell One Bedroom Condo and Buy Two Bedroom Condo
Murray Hill- Sell Studio Coop and Buy One Bedroom Coop
5. Best Neighborhoods to Buy and Sell
Buy- Many neighborhoods in Manhattan represent high inventory and high days on the market, which really favor buyers when making offers. The neighborhoods that stand out are Tribeca, Soho, Midtown South, Midtown West, Chelsea, Financial District, Dumbo.
Sell- The best neighborhoods for growth reside in Brooklyn and Queens and consist of Prospect Heights, Flatbush, Glendale, Flushing, Woodhaven and Kew Gardens Hills.