Before the pandemic went into full force, real estate prices in New York City began to fall while rental prices continued to soar. However, in the last two weeks of the quarter, the impact of coronavirus on the New York City market was greater than anyone expected.
According to a new report from StreetEasy.com, the first quarter of 2020 was squaring up to be another competitive season for home shopping. Once the pandemic changed daily life and social distancing became the new normal, StreetEasy found that drop in new sales inventory, with 73% fewer new sales listings added to the website between March 15 and March 29 than in the two weeks prior. Buyer activity also dropped off – compared to the first two weeks of March, 58% fewer homes that went into contract in the last two full weeks of March.
New rentals also fell 52% during this time. Rents did not see much change, but 20% fewer landlords offered discounts on prices – some landlords have also opted to keep their properties off the market until the pandemic slows down.
As a result of the pandemic, agents, sellers, buyers and renters have had to alter their behaviors for house hunting. StreetEasy said that since March 15, daily walkthrough video views jumped eight times on rental listings and three times on sales listings – the addition of walkthrough videos to listings on StreetEasy increased 330% in March over February.
“Economic uncertainty is causing understandable hesitation from buyers, sellers, and renters,” says StreetEasy Economist Nancy Wu.“ In the best-case scenario, home-shopping season has simply been postponed for a few months. With so many variables – including how COVID-19 may spread, and other policy and economic reactions to the virus – it’s too soon to try and predict what will happen. But if coronavirus does in fact trigger a global recession, we could see prices and buyer activity levels mimic what happened during the 2008 financial crisis.”
According to the report, during the first quarter of 2020 Manhattan saw its price index drop 3.2% to $1,073,104, a six-year low for the borough. Rental prices in the borough reached a record high of $3,324 or up 3.4% annually. StreetEasy noted that the prices haven’t changed too much since the shutdown, but that could potentially change in the future.
Brooklyn’s price index remained the same as last year at $704,783, however prior to the pandemic the Brooklyn rental market was soaring – rental rates grew 5.2% to $2,755, faster than any other borough at this time. To adjust for the higher rents, more landlords (14.5% of listings) began to offer concessions.
While rents in Queens were on the rise (reaching $2,215, or 3.5%), prior to the pandemic home prices in the borough remained flat at $512,533 for the third quarter in a row. Listings spent a median of 85 days on the sales market — an uptick of 9 days compared to last year, and the longest period in seven years. StreetEasy says that sales in the borough could slow even more due to the coronavirus pandemic.
Read the full report at streeteasy.com.