The Manhattan and Brooklyn real estate markets had a white-hot spring. And recent UrbanDigs data suggests that the momentum in Manhattan may continue into the fall. It shows that roughly 15% more listings hit the market between Labor Day (September 6) and September 8. Typically, new listing activity front runs the volume of signed contracts, so a bump in new listings now suggests that hot market conditions in Manhattan, favoring sellers, may continue into the fall. But does that mean that homeowners, who are looking at the possibility of selling, should do it? It depends.
If there is no immediate need to sell a property, there’s no magic formula for figuring out the best time, or ideal market conditions, to list an apartment for sale — especially in New York City.
Instead, the decision is more of a process in which prospective sellers should weigh various market forces, determine their unique position in the market, and evaluate the real-time state of the market. That starts at a macro level, and works down to a seller’s individual circumstances.
After all, in the end, only two things matter: how much a seller can get for their property, and how long it will take to close a deal.
With that in mind, there are six factors for prospective sellers and their agents to think about when deciding whether to list their property at a given time: Supply, demand, relative demand, re-supply pace, price trends, and days on market (seller motivation). And as a case study, I’ll break down the hyper-local market dynamics for two related, but entirely separate classes of apartments: two-bedroom, two-bathroom co-ops versus condo resales in Manhattan’s Yorkville neighborhood, using the full month of July 2021’s data.
The first factor to consider is current market supply. That means looking at how many units on the market in a specific neighborhood have the same bedroom count, price point, and utility.
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As for our Yorkville case study, the number of new listings in July was fairly balanced between condos and co-ops. At the sub-neighborhood and bedroom count level, there are more co-ops coming onto the market. As co-ops in Manhattan outnumber condos by nearly three-to-one, an imbalance is expected, however, only 11 co-ops for eight condos suggests a slightly tighter co-op market.
With supply in the bag, homeowners should look at demand next. That means thinking about how many buyers are looking in your specific neighborhood for properties with your unit’s bedroom count, price point, and building type.
In July, the Yorkville market was active, with more than 1,200 contracts signed for co-ops and condos in July for Manhattan, and 15 for Yorkville. Compared to supply, which suggested a slightly tighter market for co-ops, the demand figures for July were more evenly distributed in Yorkville versus both Manhattan and the overall Upper East Side — a hint that buyers had options.
3. Relative Demand
Third is relative demand, which is the ratio between pending sales (demand) and active listings (supply). It tells sellers if there are more buyers or sellers in their given market, and which one of the two groups holds leverage. In other words, this is a look at how much stronger or weaker each market is in relation to a standard seller’s market.
Back to our case study — by looking at the relative demand, we get a sense that generally, condo sellers in Yorkville had less than expected leverage. Drilling down into bedroom count, we find that two-bedroom condo sellers in Yorkville had only a slight advantage over buyers, whereas co-op sellers enjoyed very strong leverage. The implication: co-op sellers who have priced their properties right may not need to negotiate, as buyers will compete.
4. Re-Supply Pace
Next, a look at the re-supply pace, which measures the net gain for a given market over the last month. This tells a seller how much more competition they can expect each month.
Through this lens, we can see that net co-op supply in Yorkville ran at a deficit during July, while condos appeared to be more in supply. However, when just looking at Yorkville two-bedroom properties, we find that condos were harder to replace. The implication here is that with such a low replacement rate, buyers may have felt more urgency toward completing a condo deal.
5. Price Trends
Looking at price trends to get a sense of where the market is trading will give you an indication of whether you’ll be able to get the price you want.
On the overall level, prices were up across the board from the previous year in Yorkville during July. While that suggests buyers may have been tempted to pay more, a closer look at Yorkville two-bedroom units finds the median price declined for both condos and co-ops, suggesting sellers might not have seen the premiums that other sectors were.
6. Days on Market
Lastly, look at days on market to get an idea of how long it will take to sell.
In our case study, sellers are in a good position: time on market appeared fairly consistent for both condos and co-ops, with an approximately two-month wait to sign a deal. However, note that two-bedroom Yorkville co-ops saw deals sign a couple of weeks faster than the overall market average for co-ops and Yorkville two-bedroom condos. That suggests that sellers who need to sell immediately may not have needed to discount their price all that much to get a deal done fast. On the other hand, Yorkville two-bedroom condo sellers, who needed a quick deal, may have needed to discount a bit more.
Putting it All Together
Adding it all up, a two-bedroom condo seller in Yorkville would have done well listing in July or August, but the combination of supply, demand, and price trends suggest pricing right — or at the market level — is especially important in order to avoid an exaggerated time on market or price cuts. It appeared to be an even better time to list a two-bedroom co-op in Yorkville. Sellers appeared to have the market on their side in July, although the lack of rising price action also suggests getting the price right from the get-go.
While considering these metrics isn’t a foolproof way to gauge the market, it’s better than sticking your finger into the wind. Real estate is an intricate, complicated business. But knowing what data to look at, and what to make of it, can help you and your agent decide whether it’s time to sell or a good time to wait.