In this month’s Juliette Interviews, I picked the brains of NY real estate power duo, Tom Postilio & Mickey Conlon. Responsible for over $2 billion in residential sales, Tom & Mickey have been named among the top real estate brokers in the United States by The Wall Street Journal. Learn from two of the best in the biz about the current state of the New York market, how it’s been affected by the pandemic and where it’s headed.
JH: Last year was a very tough year in real estate for NY with major difficulties in being able to show properties due to the Pandemic. The market is roaring back already this first quarter. Who are the buyers that are buying in New York now?
T&M: Value-driven buyers, investors, first time buyers who may have been priced out previously, and just about anyone who realizes that after five years in decline, the New York real estate market seems to have hit bottom. Momentum has picked up, which has created a palpable sense of urgency.
JH: Where can you get the best deals (areas)?
T&M: There is no short answer to this question, as there are great deals to be had everywhere, though competition in Harlem and Brooklyn has been particularly fierce.
JH: What kind of a discount can you expect now?
T&M: The size of the discount really depends on the quality of the pricing. Overpriced listings may reflect a steeper discount, but that’s not necessarily reflective of the market as a whole. The average discount right now is 7%, which indicates that most sellers have adjusted prices to align with current market conditions and buyers’ expectations.
JH: The low interest rates are driving the LA markets, is it the same in New York?
T&M: Interest rates are starting to inch upward, but money is still cheap. They will likely keep moving higher as the economy recovers, so that makes it a good time to act and take advantage of a strong buyer’s market. Demand is also rising. Each of the last four months of 2020 outperformed the same months in 2019. More new contracts were signed in December than any other month last year. We’re seeing a major uptick in traffic in all of our exclusive listings—including homes at all price points and in every neighborhood we represent.
While demand is rising, supply is declining. In October 2020, there were approximately 9,600 apartments available for sale or rent. As of late January, that number is only around 7,300. People are returning to the city and eager to start getting back to normal. New signed contracts going up shows the increasing buyer demand while the new listings going down shows the decline in inventory. With these market conditions and low interest rates still available—for now—it is sparking a lot of real estate activity and we expect it to heat up even more. Sellers are getting good money for their properties while buyers can still afford higher mortgages thanks to the lower rates. We don’t know how long these trends will last. All we can say is that now is the time to make your move.
JH: Which part of the market is hot in New York and which part is slow price-wise?
T&M: In 2020, listings under $3,000,000 were performing best, while the top of the market languished, but that’s changing. While the high end isn’t trading at the numbers we became accustomed to at the peak of the market, the number of signed contracts on properties above $4,000,000 has broken records over the past couple of months that we haven’t seen in over a decade.
JH: Are foreign investors still buying in NY?
T&M: There is still significant interest in New York from foreign investors, though absorption was dampened by the pandemic and global travel restrictions. Since December, we’ve seen a marked increase in foreign buyer inquiries.
JH: In your opinion, how long will it take the market to go back to its height?
T&M: Based on what we see happening in our market, we feel that the property values in Manhattan bottomed out in 2020 and will stabilize as we head into 2021. Once a significant amount of inventory is absorbed, we can look forward to a slow climb upward. If you are looking to buy in the city, we recommend taking advantage of the favorable market conditions while you can with low mortgage rates and good prices. We think there will be many buyers who decide to wait until later this year and will ultimately regret that decision. We can’t recall a better time than now to buy in Manhattan!
As we get into the spring and summer markets, with the vaccines more widely distributed by then and the election turmoil behind us, we expect a strong rebound and further upward trends for Manhattan real estate prices, inventory and completed sales. Mortgage rates could also go up. Eventually, they will have to as the economy recovers and the market self-corrects. This makes the winter months a great time for sellers to start getting their property ready to list for a hot spring market.
JH: Post-pandemic what amenities do you think will be important that weren’t before?
T&M: “Private outdoor space” is currently the top search term in New York City home searches. After being cooped up inside so much during quarantine, it’s only natural to crave more time outdoors—especially if it’s still in the safety and privacy of our own homes. Needless to say, home offices are also at the top of the list!
To learn more about super brokers Tim & Mickey, visit tomandmickey.com or follow them @tomandmickey.