New York has a lot to recover from when it comes to the aftereffects of Covid-19, and the property market is no exception. Although apartment rents have fallen in the city as a result of the high vacancy rates, these trends are starting to slow. Rental prices are beginning to recover and new lease signings have begun to increase month-over-month.

First quarter snapshot

Here are some key stats from the first quarter of 2021:

• New York State pending sales were up by 31.9% to 35,855

• Inventory fell 30.1% to 36,739 listings

• Closed sales climbed 27.5% to 32,534

• Average sales prices increased by 18.3% to $448,634

• Sellers achieved an average of 98.8% of their asking prices - a year-on-year improvement of 2%

New York’s pandemic recovery

NYC’s full pandemic recovery will depend upon the potential for more shutdowns, as well as the efficiency of the continued vaccine roll-outs, allowing business to reopen at full capacity. 

According to preliminary data released by the New York State Department of Labor, the state’s (seasonally adjusted) unemployment rates decreased from almost 9% in February, down to 8.5% in March 2021. In the city itself, unemployment rates in March 2021 were at 11.2% - still high when compared to 4.2% in March 2020.

When it comes to New York City real estate, the pandemic fall-out has certainly seen a lot of changes, with people uprooting to the suburbs and significantly bidding up home prices in those areas. On the other hand, city-dwellers who have stuck it out have often been able to secure a better city home for less. Here are 4 New York market trends to watch.

#1 It’s a buyers market

The New York City property market currently has more active homes listed than there are buyers, so for now, it is a buyer’s market. Prospective homebuyers are able to hold good leverage in sales price negotiations as the supply for housing is outpacing the demand. 

The average sale price of homes in New York was $755,000 last month, up 5% year-on-year, with properties selling for an average of 1.9% below their listed price. Recent data is also indicating that NYC is currently a buyer’s market, with the average sale price per square foot at $622, a figure down 5.6% from the year before. 

Even though the demand is returning, the inventory levels are so high that there is no imminent change in sight when it comes to the dropping real estate prices. It remains a great time for buyers to take advantage of such a favorable housing market.

#2 Manhattan discounts are attracting renters

For the sixth consecutive month, Manhattan’s new lease signings soared to their highest rate this month since the financial crisis of 2008, and consequently, rental prices are almost back to pre-pandemic levels. According to the latest Douglas Elliman report, existing new lease signings rose by more than twice the rate of those for new developments, with new lease contracts up by almost 89% on the year before.

The average price of a rental in Manhattan in March 2021 was down 6.9% year-on-year, at $4,001, although they had jumped back up 5.5% from February 2021.

#3 Brooklyn’s new lease signings are rising sharply

Dirt-cheap prices are also attracting renters in their droves to Brooklyn, with new lease contracts up significantly from the previous year, for the seventh consecutive month. The borough saw an increase of 76% in new leases signed in March 2021, taking the monthly figure to 1,269 from 721 year-on-year.

This increase in signings is driven largely by the drop in rental prices, with average asking prices at $3,168, down 6.1% from March 2020. These price drops are subsequently fueled by a flood of listings - inventory in March 2020 (17,558) was up a colossal 1,343% from March 2020 (1,216), although they did drop a relatively insignificant 12.1% from February 2021 (19,995).

The median list price for central Brooklyn homes is trending down, too - at $772,500 in February 2021, down 3.3% year-on-year. It’s certainly a buyer’s and renter’s market in Brooklyn.

#4 Queen’s home prices remain flat

Despite the borough also seeing a steady decline in rental prices, the new lease signings in Queens have not risen, instead falling year-over-year in March for the second time in three months.

Home prices remained unchanged from the previous year, but the number of properties under contract still rose by 31.4%. In Northwest Queens (the most expensive submarket), home prices fell by 1.2%, with a median listing price of $845,000. That said, the number of homes that went under contract in the area almost doubled to 118 from last February, indicating that the relative stability of the borough’s market may still be drawing some buyers in.

So long as the economy remains stable, the market should continue to warm up and it is currently a good time to consider buying real estate in NYC. Data shows that overall, despite the challenges of the past year, New York’s appreciation rate is at 5.25%, a figure that has been hovering either at or slightly above the national average. For the time being though, there are many great deals to be had across the buying and renting sectors in NYC.

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