2019 was the year when reality finally set in – a reality brokers already understood but very few sellers wished to acknowledge. At the same time, buyers, though in the drivers-seat, also had to come to grips with the fact that things for sellers weren’t (and aren’t) quite as bad as they wished – particularly with prime property, priced well, which has been selling at solid prices. The buyer tactic of “let’s wait and see” didn’t always work as planned – with some special homes selling to buyers who understood the new adjusted value of property and were willing to act quickly.
2019 saw record sales of both condominiums and townhomes. Never have we personally seen so many ultra-high-net-worth buyers out buying the very highest-end homes the market has to offer. Despite negative press driven by tangible changes in tax law, ultra-luxury homes have been trading at record numbers. We have many buyers who simply cannot find their ideal home despite having significant budgets.
That said, overall, the market was down in 2019 from 2018 in virtually every category. The start of 2019 was terrible – effected in great part by the scare of a significant stock market decline. The market, of course, rebounded as did the real estate market, but by no means in lock-step. Average days on market in 2019 reached nearly 500 days for properties asking over $4m while asking prices remained nearly the same as 2018 – showing that some sellers still didn’t get the memo, thus throwing off the numbers. Looking at sales volume on property over $4m, 2019 saw a 16% drop from 2018.
Looking at the bigger picture, over the past decade, we’ve seen a historic rise of financial markets which was tracking with the NYC real estate market until 2015, when the two markets diverged. Since the end of 2015, our real estate market has been dropping with very little relation to the bull financial market. For many this has been confusing. Our view is that despite having buyers with more money to spend than ever before, the uncertainty (politically and otherwise) of the past 4 years has outweighed the positive performance of buyers’ investment portfolios. Buyers won’t buy when the stock market is dropping, but they also won’t open their wallets when stocks are up but uncertainty is in the air.
Looking ahead, we are cautiously optimistic about 2020. Buyers are growing tired of the “wait and see” approach and there is pent up demand in the marketplace. That combined with upcoming bonus season and families learning about school admissions, we expect a healthy 1stquarter market.
On a personal note, we want to thank all our clients, friends and colleagues for their continued support. We wish you all the happiest of New Years and look forward to seeing and speaking with you in the months to come.