Despite hopes that the New York real estate market will come back to life in the summer after the coronavirus lockdown was lifted in June, the number of closed sales in Manhattan fell 46 percent in the third quarter from the same period in 2019, down 46 percent to new Sales data.
Inventories rose 27 percent – the highest increase since 2009, according to a new report from broker Douglas Elliman – and demand remains weak. The median sales price for apartments was $ 1.1 million, 7 percent above the prior-year figure.
"The Manhattan market is emerging from a deadlock and has clearly been the outlier in the region to return," said Jonathan Miller, a New York reviewer and author of the report.
Sales at the lower end of the market of under $ 2 million were down 50.7 percent in the third quarter from the same period last year. Despite a weak market, Mr. Miller reported a spike in bidding wars for properties below $ 2 million late in the second quarter and early in the third quarter, up 3.6 percent from the last asking price. Urban Digs, a data reporting website, found that 52 percent of contracts signed since March 23 were for properties under $ 1 million, while 26.3 percent were in the $ 1 million to $ 2 million range.
Sales of high-end real estate, particularly in the resale market, remained unchanged between the second and third quarters, suggesting that sellers in the luxury sector are not as flexible in negotiating prices and not having the same urgency in selling quickly. The number of condominium and cooperative sales in the sector declined 47 percent for the quarter compared to the same period last year.
One category of the market that experienced a relative boost was redevelopment. New Manhattan apartment sales accounted for 15.6 percent of total sales that quarter, and average prices rose 18 percent to $ 2,886,098 from $ 2,449,020 in the third quarter last year.
However, these prices do not reflect the overall market as prices for larger properties tend to skew the numbers of all new developments sold. For example, 16 units closed this quarter at 220 Central Park South, Robert A.M. Stern's luxury condominium complex, including one for $ 99.9 million, and all of those sales were signed before the pandemic.
September was by far the most active month since the real estate market recovered. Shaun Osher, the founder and CEO of CORE Real Estate, said two factors had caused this shift: the end of summer and the start of the school year. As people returned to the city, the number of personal screenings skyrocketed. "If I had to guess, the number of screenings is ten times higher than in August," said Osher.
However, the increased interest has not yet affected sales. In September, the number of newly signed cooperative agreements in Manhattan was still 33 percent year-over-year, and condominium sales were down 51 percent, according to the Elliman report.
Brooklyn is a different story as the number of new contracts signed in September slightly exceeded 2019 levels there. "In no way, shape or form do we see the strength that previous markets have shown," said Frederick Warburg Peters, General Manager of Warburg Realty. "But the city is showing signs of recovery and I am cautiously optimistic that next spring will show robust numbers."
Sales in the suburbs are also on a plateau, indicating that urban exodus may be easing. For example, the number of new single-family home and condominium contracts on Long Island was above 2019 levels, but the revenue surge appears to have increased in mid-July and has declined sharply since then.
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