My Year-End Insights
December 19, 2021
Who would have thought that two years after Covid-19 emerged, the global pandemic would still be front and center in our lives? Along with virus mutations, uncertainty has returned as our status quo. Holiday parties have been scratched to minimize exposures; block-long lines surround test centers; a reopened Broadway is balancing frequent cancellations as actors or crew test positive; travelers fly double-masked.
We’ve been dealing with business unusual during a rising economy and a soaring stock market, but we’re ending the year with inflation levels not seen since the early 1990’s. We believed in New York, but who could have predicted that June, July and October would be our best performing months since 2007 with luxury home sales hitting ever-increasing new peaks?
To be sure, there’s great wealth in NYC mainly from corporate profits and stock returns, and even more is expected to line investment banker pockets with a reported 35% increase in bonus money in early 2022. Last quarter’s high contract activity will continue into the new year, but there will be headwinds. The Fed has reported they will raise interest rates at least three times next year, with the first hike expected in spring ‘22.
My Tea Leaves Show A Strong Q1 2022
January and February will see a marked increase in property listings, moving side-lined buyers away from the ropes.
Pressure will remain on apartments that need renovating because of continuing supply chain constraints, labor shortages, higher prices for materials, and extended timelines for approvals. Buyers will pay a premium for apartments in move-in condition.
Outdoor space and townhouses will be particularly valued, the former for their scarcity and the latter for their privacy.
Foreign purchasers are returning, increasing buyside competition for condominium products at all price levels.
First time homebuyers, especially millennials, will be impacted most by mortgage rate hikes, contributing to a short-term spike in contracts signed under $2M in the first half of the year.
We welcome 2022 with high expectations and optimism buoyed by a new pro-business mayor and confident that we will get a handle on this virus. Sending best holiday and new year greetings to you and yours.
If you need help outside of the NYC area, I have an amazing network of top Compass agents who can assist with your real estate needs nationwide.
Shirley Hackel, NYRS®
shirley.hackel@compass.com | (914) 980-0371