Frederick Warburg Peters examines the factors influencing New York City’s spring market and inventory.
Tax day has come and gone, and agents and buyers alike are awaiting the influx of new listings that spring historically brings. But where are they?
New York City has been suffering from inventory shortages for more than a year now, and it doesn’t appear that there are plans to offer buyers many new alternatives in the coming months. Listing activity has picked up a bit in the past week or two, but the total number of listings is still 10% below where it was at this time last year. And back then, there wasn’t that much stock.
Agents, eternal optimists like us, argue that the deficit is a result of spring break. But now that April is halfway over, that explanation seems a little hollow. Many consumers are still waiting for the flight to take place, confident that Mamdani’s election will blindly rush them out of the city in November.
These days, Ron DeSantis and Rick Scott don’t seem to have the same luck drawing people to their states as they once did.
Do we tax the wealthy?
It’s too early to tell whether New York City Mayor Zoran Mamdani will be successful in raising taxes in New York City, but most of these increases must be approved by the governor, and this is also an election year for Kathy Hochul.
So even though we all know that people making over $1 million a year can probably afford to pay a little more, we probably shouldn’t hold our breath for her to tax the wealthy anytime soon. Especially since most of them travel by Uber or Lyft, which so far has not reflected the rise in gas prices coming from the Strait of Hormuz.
However, I think the disruption caused by the Iran war is affecting sales inventory in another way. Despite the changes associated with the second Trump administration, New Yorkers were active in real estate transactions in the first quarter.
Many properties that had been on the market for months or even years changed hands over the winter. However, the Iran war has caused a sense of anxiety in many New Yorkers, and I think anxious people tend to avoid change.
The addition of this new conflict to those already underway in Gaza and Ukraine will create a different and more unstable world order than the one we enjoyed during much of the post-recession period. Such concerns do not lead to major changes. Many sellers decide to maintain the status quo (or list at an unrealistically high price).
And many buyers, surprised to pay more than $4 a gallon on their way to the Hamptons and frustrated by the lack of stock, decide to just take a breather.
New York City Market Resilience
That being said, neither the New York real estate market nor New York itself is going anywhere. During my 45 years in the securities industry, countless “influencers” have predicted our company’s demise many times.
The tech bubble, 9/11, the recession, the coronavirus — all were heralded by some as the death knell for New York City. But we are too strong to lose.
There’s too much Broadway, too much music, too many great restaurants, and too many great immigrants bringing their own indigenous customs, art forms, and cuisines to add to the mosaic. Not only do stocks rise and fall, billionaires appear and disappear, but so do socialists and populists and everyone in between.
Either way, New Yorkers have limited tolerance for delayed gratification. After they catch their breath, they spring into action. And experienced agents have patience. When they do, we will be there.
Frederick Warburg Peters is a licensed associate real estate broker with Brown Harris Stevens and former CEO and founder of Warburg Realty.
