Over the last several months, the lending market has been frozen. In many cases the banks that were doing loans had restricted commercial loans to 50% down clients with 1 to 2 years in reserves because of the wave of late or non payment on loans as a result of the pandemic.
As the pandemic has eased somewhat in New York due to New Yorkers focus and determination to shelter at home, social distance from others and wear masks in public, the banks have shown more interest in placing loans, especially with the multi family market. We seem to be headed back on track, hopefully to some sort of normalcy in the near future.
The Mortgage Bankers Association revealed that by the end of March, 2020 mortgage originations had dropped by 40% nationwide.
The forward movement of some banks and the change in the market can be explained by the reopening of some businesses and rents being paid.
Medridian Capital Executive V.P. For sales Brian Flax said “ lenders need to make loans”.
In terms of the way lenders underwrite, a more conservative lens is being used. The Federal Reserve dropping interest rates to near zero has definitely helped the market.
The larger national banks such as Wells Fargo are mostly still on pause with regards to commercial real estate lending. Smaller regional and community banks have been the banks which have shown interest in origination loans on multi family properties.
Signature Bank has financed loans on multi family properties throughout the city in neighborhoods such as Washington Heights, Hamilton Heights and Hell's Kitchen.
The other asset classes that have remained strong during the pandemic have been warehouses and industrial properties which have remained in operation during the pandemic.
According to Eric Orenstein, an attorney in the transactional department at Rosenberg & Estis “I don't see things ramping up in the next two months”, “there needs to be a steady transition back to people working in the office. Until you have that for a period of time, I just don't see volume coming back with any regularity”.
Despite the fact that the availability of credit is tight, on a more optimistic note Tendayi Kapfidze, chief economist at Lending Tree says “If you can get a loan, then the price is going to be relatively low”. “The challenge right now is access”.
If you are interested in selling your property or you know someone who is planning to sell their Brooklyn or New York property, whether a single family residential property, an apartment building, a commercial property, mixed use, multi family, coop or condo, vacant land or a development opportunity, call us. You will be very happy that you did.
We always bring our clients the top market price for their property and provide exceptional personalized service from initial consultation to closing.
Accord Real Estate Group
Your Brooklyn Real Estate Brokers and Agents