New York City Realtors, real estate agents, brokers, and other professionals in the real estate business are waiting for the day they can begin conducting normal open houses and showings again. However, as we wait for the city to fully open back up and real estate deals to start flowing again, many in the real estate industry are divided over what the new residential real estate market and the housing inventory will look like post-pandemic.
While at the moment, all anybody can do, including economists, is speculate on how the housing market, real estate sales, and housing prices will look like post coronavirus. Below, I will go over a few of my predictions as it pertains to the local market.
WHO WILL BE RENTING?
The High-End Rental Market Will Likely Soften.
During the Housing crash of 2008, rent fell the most in Manhattan and stayed more stable in outer boroughs like Queens and Brooklyn. However, StreetEasy predicts that in 2020 the outer boroughs will see rental prices and housing demand drop as service-industry job growth in these boroughs is suffering.
It is likewise predicted that the NYC rental market will be incredibly active at rents below $10,000 per month as affordable housing is now a major criterion for those renters in the market amid the pandemic. Consequently, the ultra-luxury listings might be slower and may likely suffer. Millennials will hold off on purchasing property, especially first-time buyers until the market calms down. As such, they will be seeking smaller and cheaper places to live until they felt that the market conditions are right to purchase property. An alternative would be to consider saving your rent money and purchase a 2-3- unit buildings where you’re able to generate income while still having sufficient space.
WHO WILL BE SELLING?
New York Boomers May Consider Relocation.
Boomers will consider moving their primary residence to condominium communities in popular retirement states such as Florida and Arizona. Considering that people over 65 display a higher risk profile and typically have various underlying conditions, COVID-19 might offer them the push they need to transfer their primary residence to a condo at least half the year.
Families May Flee to Suburban Neighborhoods and Counties.
Some families, particularly two-income families with children, will want to flee the city and its tight living quarters immediately to purchase a new home. More than likely, they will flee to suburban neighborhoods where they can get more for their money by purchasing larger single-family homes.
WHO WILL BE BUYING?
Some Motivated Buyers May Upgrade.
When it comes to understanding the spring/summer housing market in the middle of a pandemic, buyers and sellers are getting mixed signals. The unpredictability and financial chaos led by the novel coronavirus pandemic are canceled by record-low interest rates. However, those rates are most likely only to benefit those with immaculate credit because mortgage lending institutions, like Chase, have tightened their loaning standards in the last couple of months.
As such, those with cash and good credit will likely upgrade. Some will see this as an opportunity to upgrade their living quarters in the city. Motivated by mortgage rates and housing prices, these buyers will upgrade while the market trend is down, saving substantial money because of low mortgage interest rates while moving into their preferred neighborhoods and homes.
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Even with the current state of the market, the United States real estate market will still offer an opportunity to wealthier foreign investors. Other countries, whose economies may be more fragile should consider purchasing both residential and multifamily real estate to protect their capital, some of which will be in the Northeast.
Overall, nobody fully understands precisely when New York City will return to normal, one thing is for sure, just like after the 2008 housing bubble, the city will show resilience.
Reach out to me at email@example.com if you have any interest in making an NYC townhouse or multifamily purchase in the near future.