For NYC homebuyers, virus angst clashes with fear of missing out
An open house for a Manhattan apartment draws no visitors. A buyer backs out of a condo deal after the stock market plummets. Another jumps at a purchase when mortgage rates reach irresistible lows.
Coronavirus is spreading in New York City. But when it comes to real estate, fear of contagion only slightly trumps fear of missing out on a deal.
Buyers are sorting through what a pandemic might mean for a market that's already struggling with an oversupply of homes and falling prices. On one hand, many are staying away, canceling showings, delaying relocations, pulling out of negotiated deals, wary of both human contact and the financial impact from a crisis that could bring the global economy to a standstill.
Yet there's another view: Borrowing costs hovering near historic lows may finally put an expensive purchase within reach.
"The only people going out right now are really serious buyers," said Brian Meier, a broker with Christie's International Real Estate in Manhattan. "They look at the numbers and say 'The risk is too big not to do this.'"
Meier has seen the split among his own clients. Five would-be buyers canceled appointments to look at properties this week, and two sellers withdrew their listings because they didn't want the public walking through their homes.
Then there's the renter who was casually browsing three-bedroom units for a year as he considered a purchase. Last Sunday, he went to an open house and made an offer immediately after calculating that his monthly costs to own the home would be cheaper than his rental. The seller accepted his bid Tuesday, Meier said.
"When I see this type of panic, I think it's a good time to do things," said Victoria Shtainer, a Manhattan broker with Compass. "It's a good time to buy a cruise for the future. It's a good time to go to that restaurant we were talking about; the restaurant we couldn't get into. Well, it's available today."
No one came
Anyone who's game to shop will get even more attention than usual, Shtainer said. She held an open house on Sunday for a Columbus Circle-area condo listed at abou
t $4 million. It was new to the market, and she thought it would attract at least the minimal three or four visitors. But no one came.
An empty-nester couple from Long Island set to look for a place in the city have delayed their plans indefinitely, Shtainer said. And she has two upcoming listings, both under $1 million, an affordable sweet spot in New York, that she may hold back for at least two weeks.
Other sellers have had the same idea. This year through early March, a time when inventory always rises ahead of the spring buying season, Manhattan listings climbed only 2.4%. That's down from the 8.9% average increase for the same period over the past decade, according to appraiser Miller Samuel Inc.
The deceleration in new listings intensified toward the end of February, coinciding with heightened concerns about the virus, said Jonathan Miller, president of the firm.
Sellers who do list aren't seeing much traffic. Open house attendance dropped last weekend to an average of 4.1 visitor groups per showing, the lowest rate this year, according to an index compiled by Fritz Frigan, executive director of sales and leasing at Halstead.
Stock market slide
The virus has already had a tangible impact on some would-be buyers. One who was set to sign a contract for a condo near the Brooklyn waterfront will probably walk away from the deal because she was relying on pulling money from her stock portfolio, now in decline, to cover a down payment, said Melissa Leifer, a broker with Keller Williams.
That may actually be good news for Leifer's client, the seller, who might get a higher price for the place now that mortgage rates are lower, she said.
"Once it's over, then everything will start stabilizing again," Leifer said. "Then the rates will start to creep back up and everybody's going to say, 'I should have bought that apartment when I got a 2.8% rate, and now I'm at 4%."
Home-seekers are at least browsing remotely. Internet viewing of Meier's listings is 50% higher than usual, he said. People may be more comfortable surfing the web and ducking out for a private showing, away from potential crowds, said Kimberly Jay, a broker with Douglas Elliman Real Estate.
"There are people that are working from home who are calling saying 'I have some time, I can see stuff during the week,'" she said.