NYC Real Estate is a fascinating topic of conversation. In New York City everyone loves to talk about real estate. Yet this year in particular there are myths circulating, so this video is all about busting the top three myths of 2021. Watch this video as I unpack the truth backed by the facts and figures from Corcoran Market Research.
Myth #1 – everyone moved for more space. No. In the fourth quarter, there were 1,450 contracts signed for studios and one bedrooms representing a little over 47% percent of the total signed contracts since October 1st. These homes are typically in the 300-700 square foot range, so not necessarily a step up for more space. Three and four bedroom homes made up 23% of the sales.
Myth #2 – the market was on fire so prices must be through the roof. This year transaction volume broke records in every category from under $1 million to over $5 million. Even the uber-luxury $20 million market got a boost. Part of the reason is that prices came down in 2020. In the summer of 2020, the relative bargains were amazing but you had to be brave and have the foresight to strike then. The second reason transaction volume swelled was because buyers returned in 2021 flush with down payment money after staying home and saving for a year and took advantage of low-interest rates. Prices in every category were much more approachable than they had been. The impact all of this demand had on pricing was that it eroded negotiability. Prices are expected to increase in the luxury market next year but we will see what happens for properties priced below $ 4million.
Myth #3 – Everyone has left New York. New York is dead. This is the most interesting and complicated myth. Outflow due to the SALT tax in 2018 had been on the rise prior to the pandemic. While the city looked like a ghost town for many months, it was because the wealthy fled to their second homes and renters moved out. Many of the wealthy are back and didn’t sell their homes. The rental market, which was pummeled in 2020, has now risen above pre-pandemic levels as demand soared. The rental prices are so high it has driven some would-be renters to purchase. Based on the United States Postal change of address forms, more people have moved into the city in 2021 than moved out. Walk the streets or try to get a dinner reservation and you will know that New York City is back and we are happy together.