Quarter: Interrupted
Julia Hoagland
20-year NYC residential real estate veteran. My team closed hundreds of deals and over $1B in transaction volume. I now connect buyers and sellers with expert agents in New York City, across the US and around the world.
Activity in January and February 2020 increased markedly following a slow end of 2019. “Pause exhaustion” (buyers finally getting tired of waiting to execute on housing needs), decrease in uncertainty surrounding Brexit and the U.S.-China trade situation, seller capitulation, and low interest rates all contributed to the boost in number of inquiries and showings. Contracts were signed on units that had sat on the market for months without offers.
The State of Emergency declared in New York on March 7th due to COVID-19 halted all non-essential activity, including real estate brokerage. Some prior showings led to accepted offers and even signed contracts; however, as that reserve diminished, market activity slowed nearly to a standstill.
- January ’20 closings flat, February closings up 10% year-over-year
- Last week of March ’20 signed contracts down 42% year-over-year
- In the past four days: 44 properties listed, 42 contracts signed, 19 closings
The impact of this situation on so many areas of life is profound; we stay positive and believe we can emerge from this stronger, smarter and with greater humility. It remains impossible to predict the future with certainty; thus, we turn to the past for insight.
- Following 9/11 and 9/08, there was ultimately a flood of pent-up market demand
- 9/11 was a black swan event, during the tech-bubble recession, with mortgage rates double what they are today: post-event impact on values was negligible
- 9/11 directly affected one city; substantial demand from terrorist-accustomed Europe followed. COVID impacts the entire world and follows a ten-year bull run
- 9/08 was caused by fundamental financial market issues: post-event values dropped ~15%
The value of tangible assets is underscored when paper assets lose value; conversely, the loss to value of paper assets impacts purchasing ability.
The value of home is underscored when the world outside is scary. Stay well.
Source: Manhattan Brokerage First Quarter 2020 Market Reports