Photo: Courtesy of Sotheby’s International Realty
You’ve probably heard a lot about the uncertainty in the real estate market over the past year, especially when it comes to urban areas like New York and San Francisco. But it can be difficult to analyze what all of this means to you: rental prices. really At New York ? Is this a good time to switch from renting to buying? Can you use the market situation to your advantage and negotiate a good deal? With all the uncertainty of the past year, we could use a bit of advice. We therefore spoke with two real estate agents: Lisa larson, with Sotheby’s International Realty in New York, and Paul Warrin, with Golden Gate Sotheby’s International Realty in SF. They answered our urgent questions about the state of the real estate market (over a year after the start of the pandemic in the United States) and also shared practical tips for those looking to buy or rent right now. . Read on for their thoughts.
Larson: In general, the panic over families leaving New York in droves was exaggerated. The majority of those who left temporarily were those who owned a second home, could work from there, and also chose to have their children learn from a distance. Many have already returned, motivated by the growing availability of the in-person school and the city’s impressive vaccination rates. While the current trend of working from home will continue as long as businesses allow, many are also eager to return to the office. Buyers crave human contact and yearn for a sense of community that only New York City can offer.
Warrine: We were all surprised by the real estate market. We initially thought the market would slow at a breakneck pace, but soon after the lockdown and stay-at-home orders took effect, the market came back as strong as ever. In the first 12 months, the market was pulled by buyers looking for more home work and home study spaces, private outdoor spaces, and less densely populated areas. There has been a big shift from the downtown core to more residential areas of the city and out of town. However, we are now seeing – in the last month or so – many second home buyers returning to the city, looking to buy condos before the market peaks again.
Larson: Absolutely. Newly released StreetEasy The data showing that Manhattan’s median rents in the first quarter of 2021 fell 16.8% year-on-year to $ 2,700 and Brooklyn rents fell 20% to $ 2,390 – both marking new 10-year lows. Demand drives rental prices, and 2020 has brought vacancy rates that are higher than we’ve seen for decades as people scrambled out of the city – moves mostly made possible by the remote working environment. . Having said that, I think the vacancies have flattened out and there is already a noticeable increase in the posting of appointments. As temperatures warm, vaccination rates continue to rise, and businesses begin to call workers back to the office, we’ll continue to see tenants returning to the city – especially those looking for unprecedented deals. There are signs that major concessions, including massive discounts and several months of free rent, could come to an end, but it will likely be until summer 2022 to see a return in pre-pandemic rent prices.
Warrine: Rental prices were much more affected than selling prices in urban markets. Renters are much more mobile than landlords, and there has been a massive exodus of young professionals leaving town and working remotely. Rents have fallen 20-25% in San Francisco with record levels of vacant homes. However, with companies announcing plans to reopen their offices in the coming months, tenants are starting to return to the city.
Larson: In short, look for weak spots in the market. Currently, the upper end of the price spectrum enjoys the largest discounts. So, for buyers who are considering a roster increase, now is the time to act. Renters are also getting great deals in today’s market. Lock down the must-see list for your dream apartment and browse the market to find the apartment that’s right for you. Check the rental history of the unit to make sure the prices match today’s market realities and negotiate, especially if the apartment has been on the market for a while. Today, reduced rents are the norm, and concessions ranging from one to four months free rent on leases of 13 months and longer are common. While stocks remain plentiful, the summer months generally lead to an increase in rental activity, and therefore prices. Try to plan your lease before or after the summer rush.
Warrine: The sales market in San Francisco has already reverted to a sellers market, with some households receiving 10 to 15 offers. However, the downtown condo market has yet to fully recover. There are still some great bargains to be had there. In other parts of the city, the best strategy is to arrive as quickly as possible with a strong offer. Some sellers may be unaware of how hot the market is and may accept a strong offer up front.
Larson: Yes. Very low interest rates are here to stay for the foreseeable future, and the forecast points to a very strong decade for the New York City real estate market. With low interest rates, newbies can secure a monthly payment that rivals today’s low rental prices while avoiding the rent increases that are sure to follow once the market stabilizes. While there is a lot of competition in the lower price range that is most appealing to first-time buyers, there are still deals available across the city. That said, all buyers will want to make sure their finances are tight before entering the market as the pandemic economy has tightened lending standards.
Warrine: Interest rates are so good right now, and prices in some parts of the city are still far from their peaks. Now is the perfect time for tenants who want to buy.
Larson: When viewing ads online, buyers should learn to look beyond the stunning decor, which can be staged specifically to enhance the look of a drab home. Instead, focus on the bones of the house, including a good floor plan and flow, nice views, high ceilings, and a location. Additionally, beginners should be very knowledgeable about the building in which the desired unit resides, including both finances and structural health. A smart broker is essential in advising buyers on all the nuances involved in an urban market.
Warrine: Find a well-established real estate agent you like and trust to help you find a great home. Buyers who try to do it themselves often end up overpaying or overlooking important factors. Also, they miss out on many of the best opportunities, as a surprising number of homes sell before they even hit the market. In some places, up to 25% of sales are pre-market, and often the best homes are those that sell pre-market.
This interview has been edited and condensed for clarity.