By Ian Slater | November 12th, 2020
Back in the middle of the shutdown, I (quite prematurely, I may add
) called that we would see a market where there were two mountains, and a valley in between them: sellers and buyers would be on completely different pages for a short period, and renters and landlords would be in the same position.
My thought would be that over the summer as the virus abated, we would see sellers and buyers come together and make deals, as we reached the “trough.”
This has only now begun to be seen in the data. For the rental market, per Bloomberg, new rental leases jumped 33%
from a year ago. I am seeing this on the ground: for our rental properties priced under $6,000 per month, I am seeing a flood of young tenants come back to the market and make inquiries to view them, all within the past week or so.
There is a certain sense of optimism in the market: buyers are happy the election is behind us, Pfizer’s vaccine news is abundantly welcome by all, and there is a sense of renewed hype about NYC on the tail end of this pandemic. But what I think (at least as far as what I’m seeing on the ground) is happening simultaneously, is the very real fear of a second COVID wave and an unchanged market in the winter/spring has gotten through to sellers and landlords- and they are playing ball with lower offers that they would not have considered in September and October.
Personally, I’ve seen sellers drop 3-5% under where I expected them to on recent deals, although my seller pool is split between future optimism and current reality acceptance. Landlords have come down precipitously as well as they are inundated with the realities of the vacancy levels in NYC.
Ideally this persists, and my premature call will be right over the winter and spring-- and the market continues to move at these quicker paces.