New York City is known to be one of the most expensive housing markets in the entire world. However, the COVID-19 outbreak in the United States has resulted in fluctuations in the residential real estate market in New York City. A significant number of renters in Manhattan and the more affluent areas in Brooklyn have left the city. As a result, the number of vacancies has increased, and rents are continuously decreasing.
However, sale price changes are seeing a more gradual change as owners are unable to break leases the way in which renters are able to. Nonetheless, things have started to return back to normal as lock down and shelter-in-place regulations have been lifted. Showings have been permitted to resume which has caused the supply of homes to rapidly increase, especially in Manhattan. In Brooklyn, there have been signs of a shifting housing market due to falling prices.
The pandemic prevented many buyers and sellers from entering the market and the number of homes for sale decreased considerably all across the United States. Now, many markets have still not seen these numbers return to levels seen prior to the pandemic. In New York City however, the number of homes available for sale in the market have started to return to the levels seen in 2019.
While the number of homes for sale decreased by almost 40% year over year in June, Manhattan saw a 23.1% increase in July. This is evident of the fact that buyers in Manhattan have more power in the market. Although Brooklyn has not yet witnessed a change to this extent, it is clear that it is heading in the same direction. In Brooklyn, the number of homes for sale decreased by 24.3% year over year in June but July saw only an 8% decline. This shows that once this value becomes positive, there will be more supply than demand which will give buyers greater leverage for negotiations in prices.
In August, the number of new house listings in Brooklyn significantly increased year over year. This included properties in all price ranges, which means that buyers looking for all types of homes will have the upper hand while deciding the sales price. Generally, sales prices have fallen slightly and rents in Brooklyn have also decreased.
While the real estate market in Manhattan is already favoring buyers, other boroughs in New York City are expected to follow. If more properties are added to the inventory in the upcoming months, it will be guaranteed that the residential real estate sector in New York City is a buyer’s market.