By David Goldfischer, Esq.
Amidst the calls for rent strikes, mortgage forbearances, and tax reductions, New York City’s real estate market has begun to show signs of life. After a very promising start to 2020, the COVID-19 epidemic thrust the market into an unprecedented tailspin. Over the past few weeks, however, the initial market freeze has begun to thaw. And while we are certainly not in the fortune-telling business, we can look towards past data and events to forecast what the future of the NYC real estate landscape may look like.
The early returns for the real estate market in 2020 were extremely positive. There was a high level of activity on both the buy and sell side and everyone working in the industry was bullish about the prospects which lay ahead. This activity also served as a microcosm for our firm as a whole, where we were on track to have our single best year-to-date. We all know what came next. A life-altering epidemic, the likes of which were never seen before (and hopefully never seen again), changed the world as we know it. Many lives were lost and uprooted and the world’s economy was crippled. Few markets were impacted more than New York City’s real estate market, which found itself at the epicenter of this epidemic. As the impact of this epidemic started coming into focus, many investors, landlords, and business owners found themselves in a state of paralysis. However, the trends we have noticed over the past few weeks suggest that this initial shock has begun to wear off and brighter days are in store for us ahead.
As the calendar turned to May, our firm has seen a strong uptick in accepted offers on residential purchases and sales. Most notably, only a small percentage of these deals were “sight unseen” and contained mortgage contingencies while the average price discount was under 8%. This level of activity has remained consistent over the past few weeks, we have also seen a surge of Sellers reaching out to get ready and list their apartments as well as Buyers trying to gauge the market prior to making offers. When the epidemic first struck, our deal activity was down roughly 87%. Over the past few weeks, this number has shrunk to about 67%. While these numbers are still far from pretty, we can nonetheless take solace in the fact that we are trending in the right direction and the market is beginning to adjust to our new reality.
Between 9/11, Hurricane Sandy, and the recession in 2008, NYC has established itself as one of the most resilient cities in the world. While there is no doubt our city will recover from this latest challenge, widespread adjustments will be made to the way we conduct business going forward.
The COVID-19 epidemic is not something we are incapable of recovering from although the ultimate recovery time may be greater than those following the past catastrophes. The entire team at Chaves Perlowitz Luftig LLP is here to serve as a resource in getting our city back up and running. Our team’s perseverance, diversity, and flexibility enable us to act with the necessary wherewithal to emerge from this crisis stronger than ever. Our real estate attorneys look forward to working with you for many more years to come. Contact us today for a free consultation.
Chaves Perlowitz Luftig LLP is one of the most highly regarded real estate and estate planning firms in New York City. Our team of top-rated real estate attorneys and estate planning lawyers have extensive knowledge, resources, and connections to help you achieve your goals and plan for the future.