After a turbulent initial start to 2020, the entire state of New York has now entered Phase Four of the reopening process, which means the real estate market status is drawing increased interest with hard money lending. The year actually got off to a strong start before the pandemic's onset until the promising projections and high expectations were sidelined by the uncertainty and general chaos that shook all sectors of the global economy. April subsequently saw historical lows in sales activity accompanied by the year’s most important pricing trends up to that point.
However, as the curve has begun to flatten and the majority of society began readjusting to the new state of normalcy, the state’s phased reopening process prompted a provisional return of transactional activity midway through May. June proceeded to paint an entirely different picture with heightened sales numbers and the first significant year-over-year price drop. However, that month also recorded the highest average sale price of 2020 at $717,733. July then posted the most significant drop of the four boroughs’ median sale price and was the most robust sales month since the beginning of COVID-19.
The transactional numbers have understandably been on a downward trend since the beginning of the viral outbreak. Still, June saw a resurgence in sales activity, with the monthly sales activity peaking higher than it has since March. Specifically, there were 1,670 residential sales over the course of the month, coming in 41% lower year-over-year. It should be noted, however, that this discrepancy between 2020 and 2019 is not as drastic as it appears; sales activity and the average sales price was artificially inflated in June 2019 as buyers and sellers alike rushed to seal transactions prior to the implementation of the new mansion tax. These favorable real estate market conditions continued into July. Sales activity consistently rose in New York City, with July 2020 up 40% month-over-month and down only 33% year-over-year—which is an encouraging sign that the market is getting back to some sense of normalcy. Transactional activity is also trending upwards, with average weekly sales surpassing 500 transactions for the first time in over 15 weeks, and monthly transactions over the 2,000 mark for the first time in over four months.
Looking at the specific communities comprising the collective New York City real estate market, it is apparent that the COVID-19 pandemic has taken its toll thus far in 2020 in terms of average sales price and transactional activity, however, things are looking promising for the future as the real estate business resumes full activity. In Queens, the median sales price recorded its first year-over-year decrease of 10% in July. This was offset by the fact that the median sales price jumped up 10%, for the highest price increase across the four boroughs. Sales activity in Queens also strengthened in July, topping 855 transactions and making this the borough’s most active month since March. Comparatively, in Manhattan, the average sales price bottomed out in July to $1.065, which represents a 15% decrease from 2019.
Manhattan was by far the hardest-hit residential market in the city in the first half of the year, where sales activity also decreased by 31% from the previous year. The Bronx recorded its highest price growth with the July median rising 7% year-over-year. The Bronx’s 260 sales recorded in July also represented a 60% increase month-over-month. Similarly, transactional activity increased in Brooklyn, which experienced a 19% month-over-month gain, with 595 transactions in July.
The neighboring markets of Long Island, New Jersey and Connecticut all showed similarly promising signs of improvement. The Long Island market hit new highs in August, with the median sales price in Nassau County peaking at $595,000, a 7.6% increase from last year. Pending sales also increased a whopping 45.6% from 2019, with 1,866 being reported throughout August. Likewise, month-to-month trends indicate growth in New Jersey in terms of both home sales and listings. Between April and May, new listings jumped from 7,272 to 12,822. And in Connecticut, closed sales of single-family homes increased 7.59% over July 2019 and the median sales price rose 7.55%.
Hard Money Lending: Current State of the NY Market | Gauntlet Funding – Melville, NY