New York”™s resilience and the rebound in the real estate market in the city as well as throughout the Hudson Valley came under scrutiny during a webinar produced by the Hudson Gateway Association of Realtors (HGAR) in the series “Getting the Deal Done.”
HGAR”™s CEO Richard Haggerty said, “We rounded out last year with record-breaking numbers. The post-Covid surge and recovery continued well into 2021. Comparing 2021 residential sales to 2019 residential sales, Westchester was up 19%, Putnam County 10.6%, Rockland 19%, Orange 11%, Dutchess 20%, Suffolk almost 12%. Interestingly, Queens and the Bronx had just an incredible rebound: Queens 65.7%, 2021 over 2020, and Bronx 61% from 2020.”
Haggerty reported that there was some softening of the market in the fourth quarter of 2021.
“I really expected that to happen, quite frankly, because we just couldn”™t maintain that frenzied pace. I think what we really saw in the fourth quarter of 2021 was a return to the seasonality of the market that we lost in 2019,” Haggerty said. “In 2019, we knew that the market totally closed down for all intents and purposes in the second quarter, came roaring back in terms of showings and accepted offers in the third quarter and that led to a ton of closings in the fourth quarter.”
Haggerty said that people should not be misled by the fourth quarter 2021 softness.
“I”™m very bullish as we go into 2022,” Haggerty said.
Jonathan Miller of Manhattan-based real estate appraisers and consultants Miller Samuel Inc., said, “Westchester and counties north of the city just were rocket ships as I described it in terms of activity and Manhattan was asleep. The city now is the outlier in the sense that they still haven”™t caught up to what happened in the surrounding counties and I think we”™re going to see that in the first half of 2022; heavy, heavy volume continuing, bidding wars rising, all that intensity.”
Miller said that the suburbs have a problem that the city doesn”™t have.
“The city ”¦ it has more to sell,” Miller said. “The characteristic for the suburbs and you could argue for most of the country is that inventory is not just low, it is insanely low.”
Marissa Tracey, director and global private banker at Citi Private Bank, said that the demand for residential real estate in Manhattan was driven in part in the second and third quarters of 2021 by school reopening for in-person learning.
“If you wanted your child to stay in school in New York you needed to move back to the city,” Tracey said. “Suddenly you were going to be working from home with kids going back to school and you needed something bigger, larger. Your concept of what it meant to live in a New York City apartment and the space you needed changed dramatically.”
Tracey said that at Citi they see the Federal Reserve tightening interest rates in small steps through 2024 to control inflation, which will result in mortgage rate increases. She said the bank sees 10-year adjustable rate mortgages at around 2.1% by the end of the year. She said the bank does not see mortgage rates going into the 6, 7 and 8% range.
Joe Rand, chief creative officer of Howard Hanna-Rand Realty and executive director of Broker Public Portal said, “In a time when people see inflation coming, real estate is generally a good hedge on inflation. That should help the market overall.”
Rand said that rather than focusing on interest rates, people need to pay attention to the actual cost of carrying a home in terms of dollars spent each month.
“Right now, in real dollar terms, the monthly payments to buy a home in the Hudson Valley and Northern New Jersey are ”¦ as low as they”™ve been anytime and much lower than the mid-2000s and much lower than the mid-80s because the rates have been so low,” Rand said. “Now rates creep up. That”™s going to take away a little bit of that and the fact is prices have gone up.”
Miller said that the residential rental market recovery is following the level of office reopenings.
“All those central business districts are going to enjoy greater tenancy because ultimately if I have to come in a couple of days a week versus five days a week at home maybe I”™ll live closer to the office,” Miller said.
Tracey said that financial services companies want to see their employees in the office.
“I don”™t think it”™s a one day a week. I think three days a week may be the new normal,” Tracey said. “Some people may be able to get two, some people it may be four, but I think that at the sort of studio/one-bedroom purchase price and the rental market you”™re going to see increased demand there because ”¦ the younger people, the 30s and under, who now need to be in the office are going to need a place to live and for those two days a week when they are working from home they want a nice place to live and they”™re willing to spend more money on that.”
