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Good morning
Halstead Open House Index contributors and followers!
The numbers are in from the 2nd weekend after the coronavirus
was detected in New York City, the fear and worry is creeping in, and
in our field, everyone is asking: how is this going to affect buyers
and sellers of real estate?
Before I
come to my weekly recap of the last weekend’s numbers, quick note.
Yesterday morning I inserted one more question in the survey: “Is
Your Listing On StreetEasy?” By this morning I received 15 new
replies and you can read the numbers on the bottom. As the number of
listings labeled “Not on StreetEasy” is growing, I think it will be
interesting to track the open house traffic in this category.
So, here
they are. The average attendance last weekend in New York City was
4.10 per open house. I received 340 replies, fantastic increase of
25% from the weekend prior, when we received 270 surveys. So, does
this number indicate that panic over the virus is affecting the
market? I’d say yes, but it is more complicated; it is the virus AND
the stock market. Of course, these two are connected. The buyers
really do not want to liquidate their stocks in order to pay for real
estate. When one’s portfolio is down 20-25%, this is a reasonable
position to take. With nervousness about their decimated stock
portfolios comes insecurity about real estate valuations. If buyers
feel that values of real estate will further depreciate because of
the virus and financial instability, they will postpone their
decisions to buy. In the short run, in my opinion. If we are able to
replicate Chinese efforts in curbing the virus, then by mid-July or
early August we should see the markets and buyers confidence coming
back to normal.
Let’s put
this number 4.10 into perspective. On February 23rd (before the virus news) the average was 5.62 per
open house. Followed by the drop of 15% to 4.77 per open house on the
weekend of March 1 (after the news about the virus in NYC broke out).
This followed by another 14% drop in traffic, from 4.77 to 4.10 this
past weekend. 4.10 per open house represents the slowest weekend in
the first quarter of 2020. The true indicator will be to watch the
traffic at the rest of the weekends in March and early April. A
number of you also left me interesting comments in the surveys, I
decided to print some of them at the bottom of this
report.
44 open
houses reported zero traffic, this is 12.9% from all surveys
received. Last weekend that percentage was 11.5% and the weekend
before that it stood at 9%.
The most
visited open house honorary mention goes to Zoe
Kellerhals-Madussi from LG Fairmont. Her first open house at 340 E 80th Street attracted
31 parties! (who is afraid of virus on Upper East Side?). Here, in
her own words: “Hi Fritz, wow so cool. Thank you! Answers
below. 1.Why was your exclusive so attractive? The exclusive was
attractive because the price is right and the layout is great. It
needs work but it ticks off all the boxes in terms of the essential
needs one would seek for in an apartment. 2. How
did you handle the crowd? We were very surprised to see so many
people. The building requires we bring attendees up from the lobby so
two agents from our team were present. We just let attendees do their
thing. We have been doing second showings all week. 3. Any
offers? Yes multiple offers. We are considering accepting one by the
end of the day.”
Here is the dataset. Let’s check the
action in each borough:
Manhattan – the average dropped to 4.03
per open house, a drop of 14% from the weekend earlier. Busy in Other
Upper Manhattan Areas (8.25) and Soho & Tribeca (8.00), East
Village (5.60), Chelsea (4.89). Upper West Side (4.80) and Upper East
Side (4.54) were above the average. Slow in Midtown West (2.17),
Midtown East (2.74) and Harlem (2.68). Last year, on March 10, 2019
weekend, the average was 3.34 - and there was no virus or Dow
Jones madness then! See the rest of the numbers below and beware of
the averages with small sample sizes. We received 264 responses from
open houses in Manhattan.
Brooklyn – the average dropped to 4.88,
from 5.53 recorded the weekend earlier, an 11.75% drop of traffic in
Brooklyn. Busy in Crown Heights (12.00), Fort Greene (9.50) and
Park Slope (7.50). Slow in Dumbo (2.00), Bed Stuy (2.00) and Cobble
Hill (2.50), but again: beware of the small sample sizes. We received
42 replies from Brooklyn. Last year, on March 10, 2019 weekend, the
Brooklyn average was 4.13.
Bronx – the average dropped to 2.31 per
open house, from 4.10 recorded the weekend earlier. We received 16
replies from the Bronx open houses.
Queens – the average went up, to
5.23, from 4.33 recorded at the weekend prior. Anything is possible
with low sample sizes – we received just 13 replies from the Queens
open houses.
Staten
Island – two
visitors at one open house reported from the Richmond County.
Size – Multi-units buildings were
strong with 7.67. Among apartments, 1BRs (4.79) and 2BRs (4.39) had
the most traffic. Slow at studio open houses with 2.46). See the rest
below.
Price – the most traffic was in
$1M-$2M price range, the slowest in $3M+ range.
Condition – fairly equal distribution
this week, somehow “Mint/Excellent” condition lagged with 3.80 per
open house. Are you placing a bit too much value on the renovations?
First Open
House – 291%
more traffic at first open houses vs. at the “stale” ones. 9.21 vs.
3.16.
By
Appointment Only – 74% more traffic at “normal” open houses vs.
those advertised “by appointment only”. I think with the virus issue
we will see a shift to more open houses “by appointment only” or to
no open houses at all!
Listing on
StreetEasy? – received
just 17 replies, so don’t make much of the averages, the sample is
too small. 5.87 for StreetEasy “YES” and 5.00 for StreetEasy “NO”.
As promised,
I am quoting here some comments I received from you this week:
Mallory
Brown Bogard: “Terrace (private) is the crown jewel of this
home. 900 sq ft with outdoor kitchen, green egg smoker, custom wood
sectional seating, and more. Glad the coronavirus didn’t keep the
buyers away!!”
Doreen
Mangan: “I was
pleased with the turn-out, given virus concerns. Was ready with
booties, disposable gloves, and Lysol wipes. Of the 18 parties,
possibly three were neighbors. There isn't much inventory for an
apartment this size in Hudson Heights/Washington Heights at the
moment, and at less than $1million, in a lovely coop, there is a
great deal of interest.”
Peter Poljan: “Might be interesting to know
how many people are doing by appointment open houses due to
coronavirus.”
Debra
Hoffman: “I
wanted to mention that we just dropped the price on this apartment to
the basement and only had three attendees. I am beginning to wonder
if fear of going out and the coronavirus is affecting open houses.”
Beth
Gittleman: “Despite
interest rate lows, the fear of the coronavirus and daylight savings
we think were very impactful this past weekend.”
Nicole
Beauchamp: “I look
for the index weekly, find it valuable to see data from other open
houses and notes from fellow agents. This was first open house since
the week of non-stop corona virus news in NYC- and I wonder if that
had any impact on people coming out at all. Very curious to see what
others experienced today. This was the third open house for this
listing, and the first one where we had zero attendance.”
On another
note – I think it is high time for all of us in the brokerage
industry to get truly politically active. Political winds from Albany
and the City Council are so damaging and unfavorable for our
industry. Poorly written rental laws from June of last year (with so
many unintended, bad, consequences) is just one example. The
pied-a-terre tax law, if passed, will be devastating. We need to
start supporting political candidates with some common business
sense. Let me know what you think.
Lastly, I’d
like to hear from you more about how the virus issue is affecting
your business? Do you see sellers taking their properties off the
market? Or delaying placing them on the market? Do you see buyers
pulling out of deals? Do you see buildings forbidding open houses?
Share here and I will print your comments next week!
Best of luck
at your open houses this coming weekend. Weather forecast is good for
Saturday and Sunday. Keep up the good work and encourage your
colleagues in the industry to participate in our survey.
Fritz
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