We discovered that the real estate market in New York City is already thriving in the first quarter of 2021. The arrival of the new year instilled in New Yorkers a renewed sense of commitment to the city. Low prices, which haven't been seen since 2011, combined with historically low interest rates and the possibility of a new presidential administration, sparked a buying frenzy. Inventory had risen to 9,600 units in late October, but had fallen to just over 7,000 units by the end of March.
Role of competitive bidding
Competitive bidding is another practice that has resurfaced in Manhattan. This phenomenon never fully vanished in Brooklyn, where inventory rose more slowly, absorption remained higher, and bidding remained competitive. The revival of open bidding, on the other hand, has made headlines in Manhattan. Just two weeks ago, a Warburg listing on the Upper West Side for a 6-room, renovated apartment (asking in the mid-$2 million range) attracted 22 phased open house attendees, 6 offers, and a selling price 10% above the asking price. Variations of this situation have been used in homes of all sizes. Motivated buyers are flocking to well-priced units, particularly those in excellent condition, who want to make sure they get a taste of the Big Apple before it's too late. While they are initially surprised to find demand so much higher than expected, these buyers know that in order to get the good stuff, they must now act quickly.
It wasn't like this six months ago. As the country's real estate market recovered after the lockdowns ended in the second half of 2020, New York's market failed to recover. The first wave of COVID struck the city so hard that even long-time residents appeared to lose trust in the city's ability to recover. Many of the pleasures of city life were no longer available: restaurants, concerts, movies, theatre, and sports were all closed. Many who could afford to leave town did so, and everybody worked from home. Also, at the end of 2020, it was unclear how the city will be reconfigured to accommodate post-COVID living goals.
Despite the slow market, several deals made during the fall season offered insight into what New Yorkers would be searching for as the city reopened. Terraces drew buyers who had been locked inside their apartments for months. Parents of school-aged children relocated to be closer to their children's schools. And everybody needed one or two home offices. As the market gained traction in January, February, and March, these patterns only intensified and broadened.