1Q20 Quarter: Interrupted
Posted by Julia Hoagland — April 6, 2020
NEW YORK, NY - Activity in January and February 2020 increased markedly following a slow end of 2019. “Pause exhaustion” (buyers finally getting tired of waiting to execute on housing needs), decrease in uncertainty surrounding Brexit and the U.S.-China trade situation, seller capitulation and low-interest rates all contributed to the boost in number of inquiries and showings. Contracts were signed on units that had sat on the market for months without offers.
The State of Emergency declared in New York on March 7th due to COVID-19 halted all non-essential activity, including real estate brokerages. Some prior showings led to accepted offers and even signed contracts; however, as that reserve diminished, market activity slowed nearly to a standstill.
- January ’20 closings flat, February closings up 10% year-over-year
- Last week of March ’20 signed contracts down 42% year-over-year
- In the past four days: 44 properties listed, 42 contracts signed, 19 closings
The impact of this situation on so many areas of life is profound; we stay positive and believe we can emerge from this stronger, smarter and with greater humility. It remains impossible to predict the future with certainty; thus, we turn to the past for insight.
- Following 9/11 and 9/08, there was ultimately a flood of pent-up market demand
- 9/11 was a black swan event, during the tech-bubble recession, with mortgage rates double what they are today: post-event impact on values was negligible
- 9/11 directly affected one city; substantial demand from terrorist-accustomed Europe followed. COVID impacts the entire world and follows a ten-year bull run
- 9/08 was caused by fundamental financial market issues: post-event values dropped ~15%
The value of tangible assets is underscored when paper assets lose value; conversely, the loss to value of paper assets impacts purchasing ability.
The value of home is underscored when the world outside is scary. Stay well.
Source: Manhattan Brokerage Fourth Quarter 2019 Market Reports
Julia Hoagland and her team bring expertise to the Manhattan marketplace through extensive data examination and thoughtful interpretation. Julia and her team were ranked number one in their office multiple times in the past 14 years, and in the top one percent of nationwide agents and in the top five percent of Manhattan agents by Wall Street Journal/REAL Trends rankings and the Real Deal. JHT has specific core competence in the downtown loft market, repositioning unsold properties and estate preparation and sale. In addition to her work with local and national clients, Julia's international clientele take her annually to Hong Kong and Europe.