One other 12 months is sort of within the books, and what a 12 months it was! In a single phrase, 2021 was “gangbusters” for the New York Metropolis actual property market.
Virtually each metric met or exceeded file ranges at one level or one other this 12 months, because the momentum that had began in late 2020 snowballed into an avalanche of exercise in 2021. Beneath, we have a look again at 2021 and look forward to what 2022 holds for New York Metropolis’s actual property market.
2021: A Heavy 12 months For New Listings
2021 Recap: By way of month-to-month new listings, 2021 began beneath common with counts throughout each January and February beneath 2019 and 2020 ranges, in addition to beneath the 2008 to 2018 common. Nonetheless, as the primary quarter ended, seasonality returned to the market, and the standard busy season started with increasingly more sellers itemizing their items on the market.
Whereas patrons’ record-setting ranges of signed contracts have been the principle story of 2021, because it turned out, it was a heavy 12 months for brand spanking new listings, too. Every month between March and November noticed extra new listings than throughout 2019, and greater than the 2008 to 2018 common. In truth, two of the highest three heaviest listings months since 2008 occurred throughout 2021 (April and September), and solely July 2020 noticed increased quantity when the market reopened from the pandemic. On a cumulative foundation, by December 5, 2021, had amassed practically 18% extra new listings than the 2008 to 2018 common.
Nonetheless, regardless of this surge in itemizing exercise, many patrons remained pissed off as a result of there merely was not sufficient stock. In truth, subtracting the variety of offers and off-market listings from the variety of new listings yielded a destructive quantity for all however two months in 2021.
2022 Prediction: Itemizing quantity may wane considerably via mid-January 2022 as sellers pause for the vacations. The return of seasonality means that itemizing quantity ought to resume its upward trajectory in mid-Q1. Within the interim, a slowdown in buy-side exercise for the vacations may trigger stock ranges to rise in early 2022, pressuring costs.
Contracts Signed: Purchase-Aspect Momentum
2021 Recap: The variety of month-to-month new listings could have began 2021 at a below-average degree, however contracts signed actually didn’t. By the top of 2021, the variety of contracts signed was head and shoulders above another 12 months.
The buy-side momentum constructed up in late 2020 carried straight via into January at a brisk clip, and the variety of offers solely elevated from there. By October, the variety of contracts signed surpassed the earlier full-year file of 12,520, set in 2013. By early December, the variety of offers signed in 2021 had doubled the quantity signed throughout 2020. The luxurious sector (items priced +$4 million) had its finest 12 months ever by way of greenback quantity. A top-ten rating of the posh sector’s high months by greenback quantity since 2008 contains six months from 2021, with nonetheless one month to go.
2022 Prediction: Deal quantity and itemizing quantity usually decelerate via the vacation season. In the course of the first quarter of 2022, deal quantity may very well be noticeably slower if itemizing exercise stays slower than the fourth quarter of 2021. In consequence, the market may go sideways as patrons wait for brand spanking new sellers to refresh obtainable stock.
Closings: Median Worth Subdued
2021 Recap: For the primary time since mid-2015, itemizing reductions fell constantly all year long as buy-side competitors elevated. Of specific be aware, the posh sector shifted into overdrive within the spring and fall and because of this, six out of the all-time high ten months for luxurious contract greenback quantity occurred in 2021.
Regardless of a flurry of exercise, the median value stayed considerably subdued via 2021 as patrons remained overly acutely aware of dangers. Nonetheless, the elevated variety of luxurious offers finally elevated the median value. Furthermore, a take a look at lately signed and closed offers suggests upward value pressures stay within the pipeline, particularly contemplating the record-setting efficiency of luxurious items in November, which have but to work their approach via to public file.
2022 Prediction: We may even see a short-term spike in costs as lately signed luxurious offers shut, adopted by a multi-quarter lull in 2022 as elevated competitors amongst sellers cools the market and patrons, after needing to behave immediately to keep away from lacking out, start ready for value cuts.
Sooner or later, 2021 might be remembered for its outsized exercise on all fronts. In some ways, the market felt prefer it did again at its earlier peak in 2015, with engaged patrons snapping up listings at or close to the asking value earlier than the primary showings start.
Which 12 months Does 2021 “Rhyme” With?
As Mark Twain as soon as stated, “Historical past doesn’t repeat itself, however it rhymes.” The query for 2022 is now: does 2021 rhyme with 2012 and the start of the ramp-up into the height, or does 2021 rhyme with the zenith of exercise seen in 2015? If the reply is 2012, patrons would do nicely to repeat the mantra, “time is of the essence” to organize themselves for a rushed buy course of. If the reply is 2015, sellers would do nicely to beat a possible market lull by barely underpricing to safe a fast deal.