Prior to the coronavirus pandemic, New York City, sales prices were falling and rents were heating up rapidly. According to StreetEasy Market Reports, during the first quarter of 2020 NYC sales market appeared poised for another competitive home-shopping season. More sellers were adding homes to the market with buyers ready to use their negotiating power amid falling prices.
In the two weeks before the first quarter ended, the pandemic’s impact on daily life intensified, and, as social distancing became the norm, uncertainty shifted the real estate market’s outlook. Citywide, there was a significant drop in new sales inventory, with 73 percent fewer new sales listings added to StreetEasy between March 15 and March 29 than in the two weeks prior. Buyer activity dropped off, too: 58 percent fewer homes went into contract in the last two full weeks of March compared to the first two weeks.
The rentals market also felt similar effects. New rental listings fell 52 percent in the second half of March compared to the first half. While asking rents changed minimally, 20 percent fewer landlords offered a rent cut on their unit at the end of the month than the beginning. Rather than offer discounts, many landlords have chosen to keep their units off the market until the pandemic slows.
Buyers, sellers, renters and agents also changed their behaviors to adapt to the stay-at-home order and public health protocols. The addition of walkthrough videos to listings on StreetEasy increased 330% in March over February.
Since March 15, daily walkthrough video views jumped eightfold on rental listings and threefold on sales listings. StreetEasy also launched 3D Home® tours to help NYC home shoppers continue their search through an integration with the Zillow 3D Home app.
“Economic uncertainty is causing understandable hesitation from buyers, sellers, and renters,” StreetEasy Economist Nancy Wu said. “In the best-case scenario, home-shopping season has simply been postponed for a few months. With so many variables – including how COVID-19 may spread, and other policy and economic reactions to the virus – it’s too soon to try and predict what will happen. But if coronavirus does in fact trigger a global recession, we could see prices and buyer activity levels mimic what happened during the 2008 financial crisis.”
“Nevertheless, activity continues for those who need to move for life events, or renters who must sign a new lease. New Yorkers are nimble, and our adaptation to the times and quick adoption of new technology is like nothing this city has seen before.”