Nationwide, the changes in the real estate market over the past couple of years have been dizzying, but nowhere as much as in New York City. So, what should we expect this year?
The early months of the pandemic lockdown found workers fleeing large cities and opting for the slower pace and natural amenities of rural areas and the lower prices of smaller cities. At the same time, low interest rates and more time spent at home led many who hadn't previously considered buying a home to take the plunge, driving up demand and maxing out supply all over the country.
Across most of the U.S., 2021's housing market was unprecedented. The median home sale price rose by an astounding 24 percent last year, with realtors noting that it became common for homes to receive multiple cash offers, usually as soon as they were listed for sale. Indeed, nationally 56 percent of homes sold for above their list price. But, with interest rates now set to increase, that trend appears to be ending…just not in New York.
Manhattan had a record-setting 4,523 apartments sold in the third quarter of 2021—the greatest number of sales in more than 30 years—with a median sales price of $1.1 million, 9 percent higher than the median price before the pandemic.
Experts say it's because those same people who chose to leave the city early in the pandemic decided that they really do love New York, after all. They chose to come back, and they chose to buy. Since July of 2021, net migration has continually increased to the very same neighborhoods that led the 2020 departures.
And it's not just Manhattan. Brooklyn and Queens are also seeing record-setting sales, with the median price in Brooklyn in the third quarter of 2021 hitting a record high of $828,000. In Long Island City, Queens, there were twice as many sales in 2021 as in 2020, the highest volume the area has seen since the early 2000s.
Predictions for 2022
So, what will 2022 bring? The experts say they see no signs that the real estate market is slowing down. Home sales are expected to increase by another 6.6% this year, and prices are expected to rise by almost 3% over last year's highs.
That may drive some buyers, especially Millennials buying their first homes, out to the suburbs. But, because prices in the suburbs are also rising, many of those same New Yorkers are likely to hold on to the lesson they learned when they left the city early in the pandemic: There's just no substitute for New York.
The Law Offices of Melvin Monachan, PLLC specializes in working with current and prospective homeowners on all their real estate needs. Call (347) 389-1682 today to schedule a consultation and learn more about all your residential and commercial buying and selling options.