Home sales soar in Manhattan and the New York region

New York

HEADING into the spring sales season, the housing market in the suburbs of New York has already gone into overdrive, with bidding wars becoming the norm and many homes selling within days of coming on the market.

The frenetic activity - a second wave after a surge last summer - has been fuelled by multiple forces: historically low mortgage rates; pandemic-fatigued city dwellers desperate for more space; and many employers' willingness to embrace remote work, allowing buyers to look in places beyond what would be considered an easy commute.

Another major factor: unusually tight inventory, as people hold on to their homes longer, which over the past few months in some suburbs has led to demand outstripping supply for the first time since the pandemic began.

Brokers across the region report long lines at open houses, multiple offers coming in as soon as listings go live, and all-cash deals ruling the day. "This is the strongest market I have seen in two decades," said Sara Littlefield, an agent in Connecticut with Coldwell Banker.

"If there is a silver lining in this devastating pandemic, it's that it has allowed people the freedom to make lifestyle choices like relocating, or downsizing, or moving up," she added, "and they're taking that freedom."

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At the same time, Manhattan's housing market has also finally picked up. "Contract activity first broke even back in December with year-ago levels," said Jonathan Miller, a Manhattan-based real estate appraiser who also monitors suburban markets. Then it rose in the first two months of 2021, he said, adding that he expected the strong pace to continue through the spring.

In a just-released February report for Douglas Elliman Real Estate, Mr Miller found that signed contracts for all property types in Manhattan jumped 73.1 per cent from a year ago. "It's a combination of softer pricing, low rates and the distribution of the vaccine - people are feeling more safe about living in the city," he said.

Jeffrey Otteau, president of the Otteau Valuation Group, based in Matawan, New Jersey, agreed that depressed urban areas would recover. "I don't think anyone expected people would leave the city," he said, "and never come back." For those buyers focused on the suburbs, here is a glimpse at what is going on throughout the region.

Westchester County

Brisk could describe the weather and the pace of sales in Westchester this winter, as the single-family sales market builds on its 2020 gains, from Pelham to Scarsdale to Armonk.

A shortage of single-family houses explains the heightened competition. Starting last autumn, demand began eclipsing supply, according to a report from Douglas Elliman, and signed contracts have picked up since January: The busiest brackets have been houses priced from US$1-2 million, with US$600,000-800,000 a close second.

Among the crop of deals that closed this winter, the time from being listed to going into contract had shrunk to just two months, according to Julia Sotheby's International Realty, though brokers said that spread can be misleading because much of the time is eaten up by overworked bankers and lawyers completing paperwork.

In actuality, some houses are finding new owners shortly after hitting "coming soon" websites.

Low interest rates and scarce inventory, which are national trends, explain some of the local spike in demand and prices. But other factors are also in play.

After spending extended time outside of New York to avoid the coronavirus, lockdowns and street protests, some buyers warmed to the idea of full-time non-urban life.

Troy Benson, 37, who owns a marketing firm, and his husband, Nolan Fitzgerald, 34, who works in fashion, so enjoyed the months spent in their weekend house in Orange County that they decided to stay out of the city for good.

After selling the vacation property - in two days, for 15 per cent more than its asking price - as well as their condo in the South Street Seaport, the couple are in contract for a mid-century modern house by Edgar Tafel on six woodsy acres in Armonk last listed at US$2.475 million.

"New York is very high energy," said Mr Benson, who will scale down his time in his Manhattan office to just a few days a week. "But I think a lot of people get addicted to the energy and get stuck."

Recent converts to Westchester, brokers said, also include New Yorkers facing expiring leases on the rentals they escaped to last spring and who are now angling for more permanent addresses, further pressuring the market.

New Jersey

"The spring market really began in October - that's how crazy it's been," said Vicki Gaily, a real estate agent based in Saddle River.

As soon as pandemic restrictions eased, Ms Gaily, founder of Special Properties, a division of the real estate firm Brook Hollow Group, noticed a burst of pent-up demand, largely from people fleeing urban areas. "I haven't had a day off since," she said.

Her biggest challenge - and the task facing other harried agents across the state - is finding enough available properties to sell at all prices.

As at January, there were nearly 44 per cent fewer homes listed for sale in New Jersey from a year ago, according to the New Jersey Realtors trade association. At the same time, closed sales rose during the month by 17 per cent, and the median sales price surged about 20 per cent.

"I've never seen the inventories as low as they are now," Ms Gaily said, noting that in Saddle River, which is in Bergen County, there are "maybe 40 homes" available right now, down from the usual range of 55 to 85 this time of year.

Long Island

Buyers throughout Long Island are likely to face continued competition, too, along with rising prices, in large part because of the shrinking supply of available homes.

"In the last two months, we've seen such a depletion of new inventory that sales growth has been nominal," said Mr Miller, the Manhattan-based appraiser who also follows the Long Island market. He noted in the Douglas Elliman report that signed contracts in February were flat from a year ago, while inventory levels, excluding the Hamptons and the North Fork, fell nearly 37 per cent. "That's a free fall."

On the South Shore, there is about a month's supply of available homes, or even less, in some areas, agents said.

"We would normally have five to six months' worth at any one time," said Seth Pitlake, an agent at Douglas Elliman in Merrick. "It's not that inventory is not increasing, it's just that anything that comes out in the market is being scooped up."

Mr Pitlake's clients Tom and Alicia Monforte, both in their early 30s, witnessed these tight conditions as both seller and buyer. Their Great Neck co-op sold in a week, but when they began searching for a larger property farther east, in Bellmore, they found themselves in a crowded field of purchasers.

"We would put in an offer only to find out someone else offered US$40,000 over the asking price," said Mrs Monforte, a clinical social worker, adding that "every free moment was devoted to looking".

On the North Shore, Mr Pitlake's Roslyn colleague at Douglas Elliman, Maria Babaev, who specialises in the so-called Gold Coast, recently listed a five-bedroom, split-level in Roslyn Pines that "needs lots of work".

In just one showing, she said, "I had 27 groups of buyers coming in and received eight offers, three above asking." The winning bid: 10 per cent above the US$999,000 list price.

Connecticut

In Fairfield County, towns that struggled with flat sales a year ago have had major bounces.

There are also far fewer houses to go around than at any time since the pandemic began, which is starting to cut into sales volume, according to Douglas Elliman.

In February, there were 510 signed contracts, versus 623 in February 2020. Greenwich, though, has posted huge gains in the new year: There were 108 signed deals in February as compared with 42 a year ago.

Gains were perhaps expected south of the Merritt Parkway, whose popularity derives in part from regular train service. Indeed, in the past two months, Westport had 33 sales of single-family homes priced from US$1-2.5 million, compared with 19 last winter, according to William Pitt Sotheby's International Realty.

But points north were strong as well. Ridgefield had 18 similar sales, according to Sotheby's, up from six, and New Canaan had 55, up from 11; countywide, there is almost no difference between list and closing prices.

But as potential sellers cancel plans to downsize because of suddenly back-at-home children or over worries about finding new homes, supply has been crimped, and the steady stream of New Yorkers searching for homes into the county has created cutthroat conditions.

"Briefcases full of cash are coming in; it's been crazy," said Alex Ramsey, a financial services worker who for the past year has been trying to relocate his family from their four-bedroom house in Stamford to a five-bedroom in either Westport or New Canaan.

One house they liked had 45 showings in two days, Mr Ramsey said, "and a line of cars with New York plates filling the cul-de-sac".

Six of Mr Ramsey's offers have been rebuffed so far, with the most recent in January, when he failed to connect on a Westport house despite offering a 10 per cent premium. "There seems to be so much irrational behaviour," he said. NYTIMES