{August 2021} NYC Going into Supply Shortage
Summer went by in a blink! We are in the middle of unpacking the million boxes from the move we were forced into on 6/25 when our apartment was flooded. This nomadic summer we lived in so many different neighborhoods, visited old friends in different parts of the country but we are so happy to be home, finally! Big thank you to my wonderful contractor!
True to August being one of the slowest months in the year for NYC real estate, transaction volumes dipped down again. But we saw something remarkable this month: more listings went into contract than those came on the market. This rarely happens. Because a certain percentage of the listings that come onto the market don’t sell, due to the sellers’ price expectations or changing circumstances. As a result, we usually see more listings come on than those that go into contract. The market experienced a real supply crunch in August. Let’s look at the Absorption Rate (a measure of total supply in the market): 7.7 months, which is almost the same as the long-term equilibrium rate of 7.3 months. For the first time in a very long time, the West Side and Downtown areas of Manhattan are seeing lower supply than the equilibrium, meaning West Side and Downtown are going into a supply challenge. While the rest of the country has been a crazy sellers’ market for almost 2 years, the NYC market is just getting to a point where demand slowly outstrips supply, finally leading the table to turn.
Good Read:
What was it like to be a landlord and developer during the pandemic? Here is a good first-hand description.
The NYC real estate market was the tale of two cities in October. Total transaction volume ticked higher, even though rates moved higher and sentiment was tense. Most of our new clients were understandably quiet. But quite a few of our repeat clients, the real estate veterans, were busy putting deals together.