We had our second snowstorm in less than a week, but purchasers were still going out searching for their next place to call home. I have observed the most qualified and serious families and individuals venturing out with their masks, gloves and booties to view homes, condos, coops and even rentals. The buyers and tenants figure there would be less competition at this time of the year rather than waiting until the spring rush, when the weather is more conducive for those snow birds and snow flakes to re-enter the market.
Most important and understandable is that if you are older or have health issues, the Covid-19 pandemic has put a lot of fear and concern for your well-being into the public’s psyche and stopped you from buying. However, that being said, the demand is still extremely strong and the activity is greater than I have seen in a multitude of years. Our inventory as of January 2021 year over year has been reduced drastically.
Comparing the two-month period from November and December 2020 as per One Key MLS, inventory has been reduced by 36.39 percent in Nassau County. This statistic is due to the pent-up demand that had occurred due to everyone being housebound and not being able to go out and look at homes during the March-June 2020 time period when Gov. Cuomo shut everything down while the Covid-19 pandemic and its inherent infection rate were escalating along with substantial job losses and many reduced incomes. The buyers were out in full force purchasing with an insatiable appetite in the third and fourth quarters of 2020.
As of January 2021 the absorption rate was 2.8 months, which means it was calculated by the number of available listings divided by the number of contracts and with this analysis to show the number of months for a typical home to go under contract, assuming it is priced at fair market value.
The average selling price in Nassau County was $760,509, the median price was $623,000, meaning half of the sold homes were above that price and half were below. The average original listing price was $798,903. The median original listing price was $639,000, again, whereby half were above the original listing price and half were below. So homes were selling within about a 5 percent range of the original asking price.
The change in demand, which declined 6.87 percent for the period covering December 2020 to January 2021, is another figure that is closely looked at to show how strong the market is for purchasing. This is the change in the number of contracts over the selected period (two months, three months, etc.). It is smoothed by dividing that difference by the sum of the listings for the period (this normalizes this statistic so it can be better compared with the change in supply. For example, if you selected a two-month comparison period, and the total number of contracts went from 155 (two months ago) to 121 today, and the total number of listings went from 1,000 (two months ago) to 1,200 today, then this number would be minus 1.55.
So was it the first snowstorm back on Dec. 16-17, 2020, that may have caused the reduction in demand? Over the next few months going into the spring, we will know whether or not the demand to purchase is cooling off or remains strong and how this will factor into determining prices and inventory. With all this information is it to your advantage to list your home now or wait until the spring?
If in fact the stats in demand are not related to the weather but reflect more that prices have gone to almost an unsustainable level for the average purchaser and buyers are backing away for now, we shall see what trend emerges over the next few months. It will also provide more time for those buyers who are continuing to save for that ever important down payment to jump off the fence and become a qualified and creditworthy purchaser.
Lastly, those who are venturing out to purchase today regardless of weather must be very qualified and motivated minus the tire kickers that will be out during the spring and summer months. The question arises do you want the most serious legitimate buyers or the spring tire kickers, lookers and even worse those small numbers who might not have any intention of purchasing but whose devious agenda is to potentially steal and abscond with your personal possessions? The choice is yours, but now is a fantastic time to strike while the market is still very hot.
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has 39 years of experience in the Real Estate industry and has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S). For a “FREE” 15 minute consultation, a value analysis of your home, or to answer any of your questions or concerns he can be reached by cell: (516) 647-4289 or by email: Phil@TurnKeyRealEstate.Com Just email or snail mail (regular mail) him with your ideas or suggestions on future columns with your name, email and cell number and he will call or email you back.