Welcome to my 2018 preview of the fall season for buying and selling real estate in NYC! Market reports and the media tend to be reactive, so I want 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 fall and spring months. These two time periods give us the best indication of the market. As such, here are some thoughts about the fall market 2018:
Highest Amount of Inventory Available in Fall Market Since 2010
Manhattan inventory continued to go up rapidly during the spring months. The peak of the spring market was on June 24 with 7,326 apartments on the market. In most spring seasons, the peak of inventory takes place in May. The peak on June 24 represents a later than normal peak which speaks of the high amount of apartments languishing on the market. Inventory always decreases over the summer as there are fewer newer listings and many apartments are taken off the market until September.
At the end of August, inventory fell back down to 5,600. Last September and October featured a 22 percent increase in inventory. With a high number of apartments being taken off the market and listings moving onto a second, third or fourth broker there’s no reason to expect that the fall peak in inventory will closely resemble the spring peak that reached in June.
Based upon looking at historical data combined with the current economic environment, my projections for Manhattan inventory at the end of the following months are below:
Buyer’s Market Advantage Increasing
Year over year contracts signed was down slightly for the spring market compared to this same period for 2017. The amount of contracts signed is always lower in the fall months compared to the spring months. There are always buyers who want to buy in the spring in order to be settled for the fall school season so fall consistently has better contract signed numbers.
This past spring featured a buyer’s market across all price points in all neighborhoods. We have not seen since the beginning of the decade. With a number of listings similar to what’s typically seen in the spring market—but lower demand with contracts signed—this fall has the opportunity to be an even better market for buyers. Of the open houses held this spring, 20 percent consistently featured no attendees. Do any buyers who disappeared from the market come back into the market or do they continue to stay on the sidelines? If so, this open house attendance number will provide a good indication if buyers are tired of staying on the sidelines.
Increasing Days on the Market – Higher Discrepancy Between Buyers and Sellers
One of the signs of higher discrepancy between buyers and sellers is increasing days on the market. This translates to more unsold listings which translates to more leverage for buyers when making offers. This past August shows the trend of increasing days on the market:
As such, based upon data of past trajectories of days on the market, I’m predicting the following:
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 apartment!
- East Village – Sell Two Bedroom Condo and Buy Three Bedroom Condo
- Greenwich Village – Sell One Bedroom Condo and Buy Two Bedroom Condo
- Hells Kitchen – Sell One Bedroom Co-op and Buy Two Bedroom Co-op
- Hudson Heights – Sell One Bedroom Co-op and Buy Two Bedroom Co-op
- Kips Bay – Sell One Bedroom Condo and Buy Two Bedroom Condo
- Morningside Heights – Sell Two Bedroom Co-op and Buy Three Bedroom Co-op
- Tribeca – Sell Two Bedroom Co-op and Buy Three Bedroom Co-op
- Turtle Bay – Sell One Bedroom Condo and Buy Two Bedroom Condo
- Turtle Bay – Sell Two Bedroom Co-op and Buy Three Bedroom Co-op
- Upper West Side – Sell Studio Condo and Buy One Bedroom Condo
- Washington Heights – Sell Two Bedroom Co-op and Buy Three Bedroom Co-op
*This post was originally published on September 17 in RIS Media’s HouseCall