In 2021, the post-pandemic recovery of the luxury real estate sector was expressed most in the segment of large and expensive apartments. Large-sized housing is still in the greatest demand on the market.
A peculiar feature of last year was that premium properties accounted for a significantly higher proportion of total real estate transactions than in pre-pandemic years.
In October–November 2021, 200 transactions were conducted. Volumes have declined slightly since then, but averages are still at 151 transactions a month.
In 2015-19, the monthly average was 98 deals. Thus, the current indicators are 54% higher than in the years before COVID-19.
This difference leads to a curious distortion in market analytics.
Median prices for luxury real estate are always significantly higher than median prices in other segments. This fact results in the so-called "pulling" of general median prices to higher levels in the market.
According to the observations between 2006 and 2019, elite properties pulled prices by about 13% every quarter.
Last year, the market's transactions varied in value from $200,000 to $80,000,000. Before the pandemic, the median for these transactions would have been extended by the specified 13% each quarter.
But only in the first quarter of 2022, the “pull” effect was already 18%.
At the beginning of this year, the number of transactions in the luxury real estate segment, and their share decreased, which would certainly lead to the "pull" effect weakening .
However, the facts mentioned above make it essential to take a more careful approach to reviewing market analytics in the future.
The market forecast
At the moment, the New York real estate market is entering the traditional hot spring phase.
First of all, you should expect that a large part of the housing market’s sellers will focus on providing sales reports to show high levels of growth: every month, quarter, and year. Inspired by these rates, another part of the sellers will set the appropriate prices.
In general, the cost of real estate will be higher to some extent due to economically justified prices. But, for now, buyers are willing to pay.
Currently, the New York market is a seller's market with high interest from buyers.
Sellers, however, should be quick and flexible, especially in view of the upcoming increase in key lending rates along with increased economic uncertainty based on events in Eastern Europe.
Buyers who are not willing to pay more should adopt a wait-and-see attitude. A huge volume of new properties is expected to reach the market soon. You need to be ready to react quickly in the case of purchasing real estate at low starting prices.