Well, its no surprise. The real estate market is in a world full of hurt from the impact of COVID-19. I've certainly touched on this subject but in a nutshell before the virus hit, the number of sales was up about 9% with inventory decreasing for the first time in nearly two years. It was a sign of the market picking back up with buyers who were starting to take advantage of the low prices and above-average discount at around 7%.
New listings for the week of April 26th was down 88% with new contract signings down about 65%. To lure sheepish buyers, agents and developers are trying everything from millennial-friendly Instagram tours to deeper discounts and even “satisfaction guarantees.” Sure it's going to take a more aggressive buyer to purchase an apartment unseen in an uncertain time but people have done it every day with new development. Everyone knows New York's real estate is amongst the most prime in the world. Purchasing below market value is ideal which is why it's a very interesting time. The average offer is nearly 15% below asking with the average deal being made about 8% below asking. I believe this will be even more profound when we can actually start seeing apartments in phase 2 as there will be a spike in new inventory and buyers taken out of the market due to the economic downturn. Keep in mind that the majority of the higher discount spreads will be for the upper price ranges however you will see deals being made at the entry prices. The NYT features a deal that was made of a studio that had two decreases prior to COVID with a most recent asking price at $695k. A sign that it was overpriced, to begin with, and that the seller was starting to face the music. A deal was reported to be made at an additional 9% below the asking price. For new development, here's my favorite example;
"At One Manhattan Square, the 815-unit tower on the Lower East Side, the developer, Extell, has announced its deepest discounts yet: up to 20 percent off select units in a building where prices ranged from $1.2 million to over $13 million. Before the pandemic, the developer was already offering to cover up to 10 years of common charges on the most expensive units, at a cost of tens of millions of dollars to the project. About 33 percent of the units are now closed or in contract, according to an analysis by the data company MarketProof. A spokeswoman said the developer would not release new sales numbers."
I imagine glove and mask showings will eventually commence but one thing I do believe is that it's a great time to invest in your future. At the very least if you've been thinking of buying, you should be saving your favorite listings and watching closely.