Life During Wartime-2021 New York Real Estate Forecast
Don’t you miss it, don’t you miss it
Some of you people just about missed it
Last time to make plans.Talking Heads -“Born Under Punches”
It has been said that modern warfare is akin to “months of boredom punctuated by moments of terror.”
That is also a pretty good articulation of what it felt like to be a real estate agent in New York City for most of 2020. However, starting in October that changed. In fact, it changed radically. Q4 2020 was filled with activity. I felt like the masked crusader shuttling back and forth between Prospect Heights, Brooklyn Heights and Washington Heights on a daily basis. It was life during wartime.
Q4 was a new kind of challenge and gave me a real sense of purpose in a world that had been turned upside down.
Now, after that flurry of activity we greet 2021 with a new president, new medical knowledge and a hope that we are headed to a new normal. From a real estate perspective the fundamentals still indicate plenty of buy side opportunity. Low interest rates, good inventory and many shades of uncertainty all work to a buyer’s favor.
But for those buyers who are waiting for the New York market to “bottom”, well, based on the closing data, some of you have missed it.
Here are the statistics on Manhattan and Brooklyn closings for 2018-2020:
A look at Price Per Square Foot tells a similar story:
So, where does that leave the New York market?
It’s pretty simple. Brooklyn is healthy. Brooklyn sellers can point to recent highs, and growing activity. Brooklyn buyers can negotiate knowing that the market feels volatile, and there is still ample inventory.
Manhattan, on the other hand remains a clear buyer’s market, but there are caveats. The upcoming 1–2–3 punch of the vaccine roll out, a new more disciplined presidential administration, and recent gains in price, give seller’s ammunition to make their case.
And where do I see 2021 going? Let’s take a look:
2021 New York Real Estate Predictions
- Manhattan does not bounce back until Q4 2021 at the earliest. The triple whammy of retail struggles, remote-working and a maddeningly slow vaccine roll-out will keep Manhattan prices depressed for most of the year.
- Brooklyn has a banner 2021. More space = more sales. If you are thinking of buying in Brooklyn, get cracking now.
- The Spring market never comes. Historically we see a deluge of spring listings starting in mid-February. This year, with prices depressed, I think we see substantially less. The sellers who needed to sell have already listed. Listings that have been on the market over 100 days finally start to sell.
- The exodus to the suburbs is over. If you were going to go, you went. Suburban prices soften.
- Rental prices slowly creep back up from their fall 2020 lows. That said, it is still a tenants market, especially in Manhattan.
- The best deals and biggest discounts in New York City are clustered around Midtown. From Sutton Place to Hell’s Kitchen great deals are available.
- The stock market remains nauseatingly volatile.
- The Brooklyn Nets go to the Finals.
- The New York Knicks watch the playoffs. On TV and their computers.
- Broadway and restaurant dining both open back up.
- The trend for buyers taking financing shifts from 30 year fixed to 15 year products and adjustable rate mortgages. 30 years from now feels further and further away.
- First time buyers make Jackson Heights the new Astoria, Prospect Lefferts Gardens the new Prospect Heights, and East Williamsburg the new Greenpoint.
And as always, our times may be strange, but please don’t be a stranger. I’d love to hear from you.
Warmly,
Jack
Jack Isquith
Jan 3, 2019·3 min read
What’s Next For NYC Real Estate?
George, John & Paul: Tomorrow Never Knows.
The holidays were over in a flash, and here we are now in 2019. You are either hitting the ground running, or slowly rejoining the scrum. Either way, most of us are grappling with that return to work mode. Hopefully you got some much needed rest, spent some time with people you care dearly for, and did at least a few things for your soul. And I hope that you watched that bizarre Bill Murray “A Very Murray Christmas” Netflix special. Have you seen that thing? I have no idea if it is good, I just know it’s spectacular.
Bill Murray & Chris Rock — Spectacular.
We stayed in New York, spent time with our kids and friends, took a trip up to Hudson, and generally took it easy. It was wonderful too.
It strikes me that every new year is traditionally filled with reviews, resolutions, and predictions. I’ll spare you my Top Albums/Songs list, and resolutions aren’t my thing. But predictions on the other hand, those can be quite interesting. When it comes to New York City real estate, one point of caution — the truth is no one really knows what will happen next.
That said, here’s what I predicted for 2018 last January. With Williamsburg softening, Amazon arriving, and interest rates shifting as predicted, most of my 2018 calls look prescient in retrospect.
Here’s what may be ahead of us in 2019:
• This “Buyers Market” will continue, but deal cadence will quicken as sellers get more realistic about pricing.
• The rental market will be flat.
• Interest rates will end the year higher than today’s 4.375% for a 30-year fixed loan. Come December 31st 2019, rates will still be historically on the low side.
• Smart buyers will increasingly turn to adjustable rate mortgage loans.
• There will be at least one more big tech company that ups its NYC presence a la Google and Amazon.
• The Amazon effect will be marginal outside of Long Island City. Queens will not become the Brooklyn of 2019. Besides, Hudson NY has a lock on that.
• Full shutdown or partial shutdown…people who buy anywhere along the L-train line will get great value.
• Clinton Hill, Ft. Greene, Hamilton Heights, Prospect Heights, Sunset Park, Mott Haven, Flatbush and Long Island City will outperform the market.
• Tribeca, Hudson Yards, Soho, The Upper East Side, Midtown and suburban Westchester, New Jersey and Long Island will struggle relative to the market.
• Kristaps Porzingis and Led Zeppelin will not play this season.
Wait Until Next Year.
Again, there are no iron clad guarantees. You never know what tomorrow will bring. Yesterday, we were sure the L Train shutdown was a done deal. Today, we got word that Governnor Cuomo will change this to a partial shutdown.
Long Waits and Overcrowding Never Sounded So Good.
The real estate market, like most markets, is influenced by news cycles, elections, legislation and emotions. But, if you believe in New York, it’s almost inevitable that if you have a long horizon, being a buyer will produce rewards.
I hope you had a great holiday break and am wishing you every happiness for 2019. I consider myself lucky to have you in my orbit…thanks for reading, interacting, and being part of my life.
Happy New Year y’all,
- Jack
