January 2021 Market Overview

  • Karp Dagan Team
  • 01/1/21

As the year came to a close, it was unusually busy for a holiday season. December signed contract volume was up over 33% compared to September 2020, usually a more active month. There is some renewed optimism that we are on our way out of this pandemic with the hopes that millions will be vaccinated by April this year. As extremely low interest rates start to tick up urgency may return as buyers see inventory disappearing and 'deal' sizes shrinking. We are seeing multiple bids on some properties...

Wishing you a very Happy and Healthy 2021!

Luxury Market Between Dec. 28 and Jan. 3, buyers signed 17 contracts for properties above $4 million — the highest post-Christmas week total since at least 2006, when Donna Olshan began tracking luxury deals, according to her latest market report. Last week we saw 27 contracts signed. This is a promising start to a typically quiet time of year. 

Demand for Single Family Single-family landlords have reported record occupancy and fast-rising rents since the pandemic began. Individuals, family offices, pension funds, and Wall Street’s boldfaced names are shoveling billions of dollars into build-to-rent projects. More than 50,000 houses were built specifically to serve as rentals during the 12 months leading to October, up over 60% from the prior year. While Manhattan rentals have taken a huge hit due to the pandemic, with vacancy hovering around 5.5%, in December, we saw a 94% increase in leases signed. This is a VERY promising sign. 

Baby Boomers Relocate New Jersey, New York, California, Connecticut, and Illinois rounded out the top five states experiencing an outflow of residents to other locales, according to United Moving. Most were due to retirement as we are in the peak babyboomer retirement era. In the 3rd quarter of 2020, about 28.6 million Baby Boomers – those born between 1946 and 1964 – reported that they were out of the labor force due to retirement, 3.2 million more Boomers than the 25.4 million who were retired in the same quarter of 2019. The top retirement destinations in 2020 included Arizona, Delaware, Florida, South Carolina, and Wyoming. The SALT tax deduction limit in higher-tax states was a key reason to move to low or no-tax states. 

The Newest Amenity A+ air quality systems in homes will become a KEY amenity in real estate: Improving ventilation typically involves some combination of letting in more fresh air, upgrading air filtration systems, and installing technologies like UV light to kill those pathogens. For a typical office building, current ASHRAE standards recommend 20 cubic feet of outdoor air per minute (cfm) per person, and experts like Sasse recommend that a room’s air should be replaced three to five times per hour.

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