Manhattan’s condo market is bouncing back after being slammed during the pandemic’s early months, with the gains powered by pied-à-terre buyers and those seizing the chance to acquire roomier primary residences.
New condominium sales contracts rose 21% in January and December from the same months a year earlier, according to real-estate analytics company UrbanDigs. That marked a broad improvement for the battered condo sales market in the New York City borough, even as Manhattan offices remain largely empty and some retailers and restaurants have closed for good.
Condos and co-ops on the Upper West and Upper East sides recorded the strongest sales activity, UrbanDigs data shows, though some big-ticket, high-profile sales occurred downtown. Super Bowl quarterback Tom Brady and his supermodel wife Gisele Bündchen sold their Tribeca condo for $37 million.
Real-estate brokers say Manhattan’s recent turnabout reflects pent-up demand and tighter suburban inventories, as well as growing buyer confidence that the worst of the Covid-19 pandemic might be behind the city and that its home prices look poised to rise further.
“I think people started to see with the depletion of inventory, with the vaccine around the corner, a renewed positive opinion about the health of the city,” said
a broker at Sotheby’s International Realty Inc.
Ms. Field added that some buyers worry about possibly missing out on good deals. “The fear is that we may be looking at the bottom of the market and living there now,” she said.
Manhattan has long been home to some of the highest home prices in the country, leading to an average condo sale in the borough of about $3 million in 2018. The market hit a rough patch in 2019, but was beginning to emerge from it as the pandemic began—until Covid-19’s ensuing impact hurt the Manhattan market more than it has nearly any other major city.
The Pandemic and Real Estate
When companies based in Manhattan let employees work from home as the city shut down, many workers fled for cheaper cities or more spacious towns and suburbs within driving distance. A net of 70,000 residents left the New York metropolitan region over the course of 2020, according to estimates by location-analytics company Unacast.
Manhattan sales nosedived 54% during the second quarter, according to a report from real-estate appraisal firm Miller Samuel Inc., the biggest quarterly decline in the 30 years the firm has tracked this data.
Prices of closed condo sales in Manhattan were down more than 20% in the fourth quarter of last year compared with the previous quarter, and the average unit sold for roughly $2.7 million in the most recent quarter, according to Miller Samuel. Co-operative apartments, which are less expensive because they tend to be older, smaller and carry more restrictive ownership rules than condos, sold for an average price of $1.13 million. But their prices have held up better, slipping only about 7% between the third and fourth quarters.
Some buyers say they enjoyed being in control. Shuko Hattori, a mother of two who works in finance, went into contract on a two-bedroom Upper West Side co-op in November. Ms. Hattori said she last purchased a home in Brooklyn in 2016, and found shopping for a home during the pandemic much more buyer-friendly because there were more properties to choose from in Manhattan than usual and more time to make a decision.
“The last time I looked, things were flying off the market,” she said. “Now I feel like the prices are lower. No one is paying over ask. So that’s obviously different.”
Real-estate investors and families purchasing properties for their children have also helped boost sales. That was the case for Joy Wu, a 23-year-old product manager for a medical-supplies company, whose parents bought a new two-bedroom apartment for her at 15 Hudson Yards, the 914-foot-tall skyscraper on Manhattan’s West Side.
She and her broker were able to negotiate a discount off the original asking price. “My parents were saying, from an investor perspective, this is just the time to do it,” Ms. Wu said.
Some high-end renters are also taking advantage of discounts to buy for the first time, though the most successful and qualified buyers have tended to be those who already own condos in the city, but are looking to upgrade, said
senior managing director of new-development marketing firm Corcoran Sunshine.
a mortgage broker with the loanDepot lending company, pointed to the dwindling supply of homes for sale in hot corners of Long Island and the Hudson Valley, which swelled with new residents after the pandemic first hit. That inventory shortage has helped draw more buyers who initially set their sights outside the city.
“It’s kind of turned their heads the other way,” he said.
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Source: WSJ – US News