After a sales market slowdown that predated the pandemic, stretching all the way back to 2018, the New York City sales market is showing signs of a comeback. The StreetEasy Price Index demonstrates this NYC real estate rebound, rising quarter-over-quarter in Manhattan, Brooklyn, and Queens.
In Manhattan, this is the first borough-wide quarter-over-quarter home sales price increase in two years. The median asking price in Manhattan rose from $1,300,000 in the first quarter of 2021 to $1,345,000 in the second. In Brooklyn, home prices rose from $907,800 to $949,000. And they were up slightly in Queens as well, from $629,000 to $630,000. All three boroughs also saw record high inventory levels.
What’s Contributing to the NYC Real Estate Rebound?
One factor contributing to higher prices is the surge in demand during the second quarter. This is largely due to near record low mortgage rates and the economy’s reopening. All three boroughs analyzed experienced a record high number of homes entering contract between April and June of this year. A busier market means buyers are more likely to face competition, leading to sellers accepting offers closer to ask — or even above ask. In Manhattan, the closing-to-list price ratio rose from 87.3% to 88.7% during the second quarter.
Manhattan Homes Under $1M on StreetEasy Article continues below
NYC’s Housing Supply Is Still Outpacing Demand
In contrast with the rest of the country, New York City is still experiencing a surplus of for-sale inventory. During the second quarter, Manhattan inventory was the highest it’s been since 2010. And the number of homes for sale in Brooklyn and Queens also hit a record high, going back to 2010.
StreetEasy economist Nancy Wu notes that an increase in both supply (for-sale inventory) and demand (homes actually entering contract) provides some stability in home prices. Otherwise, the rise in pending sales would likely cause more dramatic price increases. That’s been seen in other large metros across the country, where home prices are appreciating in the double digits. Compared to other areas, the price upticks seen in New York City are modest.
Brooklyn Homes Under $1M on StreetEasy Article continues below
Are NYC Home Buyers Too Late to Get in on a Good Deal?
More choices on the market is great news for buyers, even as the NYC real estate rebound continues. As long as there is competition between sellers, prices will likely not jump to the pre-pandemic levels of nearly $1.5 million in Manhattan.
“Many people declared that this spring was the perfect time to make an offer on a home in New York City,” says Wu. “And as for the rest of this year, there’s still an abundance of options on the market, and mortgage rates are still low. The city is regaining a sense of normalcy, and a whole generation of millennials are entering home-buying age, making it a perfect storm for buyers. For home shoppers, inventory is the most reassuring thing. Not only are you more likely to find something you love, but you may have better luck negotiating as well.”
Manhattan Home Inventory Soars to Record High, Even as Prices Increase
- There were 14,656 homes available for sale in Manhattan during the second quarter — the highest of any quarter on StreetEasy record.
- The number of contracts signed in Manhattan also skyrocketed to a new record of 4,997. The second highest quarter on StreetEasy record was Q2 2013, when 4,141 homes entered contract.
- Manhattan homes spent a median of 67 days on the market during the second quarter. That’s the shortest it’s been since April 2018.
- The share of Manhattan homes with a price cut remained about the same between Q1 and Q2 of 2021. It dropped minimally, from 20.2% to 19.7%.
Brooklyn Homes Sold at the Fastest Rate Since 2016
- Brooklyn homes spent a median of 50 days on the market during the second quarter of 2021. This is the lowest since Q2 2016, when homes spent a median 42 days on market.
- The number of homes for sale in Brooklyn reached a record high of 8,461 during the second quarter.
- Pending sales continued to soar in Brooklyn as well, reaching a new record high for the fourth quarter in a row. The number of homes entering contract reached 3,132 in the second quarter.
- Nearly 1 in 5 (19%) homes on the market in Brooklyn had a price cut in Q2 2021. The share of price cuts rose slightly from Q1, when it was 17.8%.
More Sale Contracts Were Signed in Queens Than Ever Before
- Pending sales in Queens reached a record high of 1,475 during the second quarter. The record was previously set in Q2 2019, which saw 1,235 contracts signed.
- As pending sales rose, so did inventory. There were 5,140 homes on the Queens sales market in the second quarter, another new record for the borough.
- Similar to Brooklyn, nearly 1 in 5 (19.7%) homes on the market in Queens had a price cut in Q2 2021. The share of price cuts rose slightly from Q1, when it was 19.3%.
- The average Queens home spent 65 days on the market in Q2. This is down considerably from the height of the pandemic in Q2 2020, when the average was 112 days. In Q3 2020, though, Queens homes spent a median of only 60 days on the market.
View all StreetEasy Market Reports for Manhattan, Brooklyn, and Queens, with additional neighborhood data and graphics. Definitions of StreetEasy’s metrics and monthly data from each report can be explored and downloaded via the StreetEasy Data Dashboard.
Editor’s Note: In March 2020, New York City’s housing market temporarily froze as the COVID-19 pandemic began in the U.S. in earnest. Stay-at-home orders were widespread. Year-over-year data comparisons over the next few months will be made against both the COVID freeze of the spring, and subsequent housing recovery that began last fall. Assuming 2021 is more typical of a “normal” year in housing than 2020 was, with little to no activity in the spring and summer, we expect many of our year-over-year measures will show large gains over last spring and summer. We urge you to use caution in extrapolating too much from year-over-year measures in coming months, and we will always try to provide appropriate context to anchor reported changes in metrics to what is normal or expected.
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