March is usually the busiest month of the year for Manhattan homeowners to list their properties in order to get ready for the busy spring buying season.
But as the coronavirus pandemic spreads across the region, new listing inventory has slowed to a crawl.
“Potential sellers [have been] holding back since the beginning of the month of March,” Jonathan Miller of Miller Samuel told The Real Deal. “I believe the virus is the likely cause — there is a hesitancy to list at the moment.”
Whether Manhattan’s property market is strong or weak, Miller said it reliably follows the same trend at the beginning of each year: Potential sellers start to list their homes in the first few weeks of the year. That number grows leading up to the months of April, May and June, when buying activity picks up.
The number of Manhattan condos and co-ops added to the market generally grows by about 7 percent in early March and accelerates to about 10 percent by the end of the month, Miller said. But this year, the listing inventory has only grown 2.2 percent through the month’s first nine days.
“We only saw nominal growth between the end of February and the first week of March, when we should be seeing an uptick,” he said.
Compass broker Brian Lewis agreed, to a point.
“The mood of the city and the country is dark right now. It’s not buoyant in any way,” he said. “It’s inspired sobriety in my sellers that I have not seen in months.”
Still, Lewis claimed to have at least three listings on deck and said he didn’t expect concern over coronavirus to slow down that process.
“The corona fear didn’t punch us so hard,” he said, pointing to New York’s soft sales market that has long been blamed on sellers’ unwillingness to trim prices. “We’ve been in a market that’s like a beach ball with a hole in it.”
Lewis said one of his sellers decided to pull their property off the market this week as markets tanked and fear of the virus’ spread deepened.
“It just really separated those that want to sell versus those that are fantasizing [over prices],” he said.
Miller added that inventory growth had already gotten off to a slow start in 2020, a trend he attributed to unease in the market over things like the presidential election and disruption from changes to SALT deductions, and new mansion and transfer taxes.
Slowing inventory growth
From the beginning of 2020 through the first week of March, Manhattan condo and co-op inventory grew 2.4 percent for a net gain of only 160 homes. If it had grown at the normal rate of 8.9 percent that Manhattan averaged during the same time period over the past decade, listing inventory would have increased by 601 homes.
Mark Chin, CEO of Keller Williams New York City, said he expects that the coronavirus’ impact on residential sales will delay transactions until the concern eases up. That’s in line with the uptick that usually occurs after presidential elections, he said.
“What I do think you will see is some of the volume pushed forward,” he said. “[But] it’s not going to destroy the real estate market.”
One explanation for the slowdown could be that sellers are concerned about allowing large groups of people into their homes during the pandemic.
Average attendance at New York City open houses fell to 4.77 visitor groups last weekend, down from 5.62 visitor groups the weekend before, Bloomberg reported. But several brokers maintain it has been business as usual.
Douglas Elliman’s Holly Parker said she toured a representative for someone stranded in a country with a travel ban around one of her listings, but hasn’t otherwise noticed any significant impact from the virus. She added that last week two listings created bidding wars.
“I hadn’t had two bidding wars inside of one week since I can’t really remember,” she said.
Lewis said he had expected last weekend to be slow, and was planning to sift through emails and listen to podcasts during his pre-scheduled open houses. Instead, he saw above-average traffic at one- and two-bedroom properties.
“Now nobody was shaking hands but [those listings] were slammed,” he said. “Markets are funny because they’re moods.”