Market Comes Back to Life…Are There Still Chinese Buyers?

The NYC real estate market improves slightly in the first two months of 2019, both in terms of sentiment and level of activities.  Attendance at open houses improves from an average of 0-2 people last year to 2-4 people this year.  Agents are much busier than last year, although deals are still hard to complete.  Median Sales Price remains unchanged from 4th quarter 2018 at 1.1mm.  Listings still take about 4 months to sell, same as the second half of 2018.  One thing that does change is the amount of inventory.  After an onslaught of inventory that came on since last spring, which led the Absorption Rate (AR) to reach as high as 10 months last November, sellers are more cautious about putting their houses on the market.  The AR is now back at 8.5-9 months.  We have the FED to thank for the market’s change of heart.  With the mortgage rates falling as a result of the pause in rate increases, buyers feel more confident that the market is not falling much further, if at all and hence are moving off the sidelines. 

 I just came back from 3 weeks in China, visiting and talking to buyers in the 3 biggest cities: Beijing, Shanghai and Guangzhou.  The state of the affairs there is a Tale of Two Cities.  The government continues to tighten its grip on money moving overseas.  Versus when such measures were first announced in Jan 2016, it is still harder now to bring money out.  On the flip side, the desire of its citizens to move money is even higher today than in 2016.  Around 120 people came to my events, I would say about 10% would achieve their goal of investing in New York real estate.    

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