New York real estate shows gradual improvements at last. Lately, it seems that many are rooting for the fall of Big Apple, reporting on an alleged exodus and claiming that more home hunters prefer the suburbs than the busy city. Many people left the city to shelter in less densely populated areas after the city became the world epicenter for the coronavirus. The event, however, is only a change in market temporarily and not fundamentally as the slow beginnings of revival have characterized the third quarter of New York City’s 2020 real estate market.
The city opened up for showings in late June, and through July, August, and September momentum gradually gathered. COVID-19 shut down the business entirely from mid-March until the last week of June, essentially eradicating the second quarter and the spring market: by order of the Governor, property could not be shown. During those months, the city has numerous cases of coronavirus. Then, owing to the extreme measures taken by the state government to keep people at home and properly masked when they ventured out, the infection rate abated, leaving the city with a low virus caseload.
In addition to the pandemic, Manhattan suffers from multi-million-dollar condo overload, a phenomenon which was already impacting that marketplace before the virus struck. The third quarter reawakening has seen strong activity particularly in the market for properties costing $2 million and under; according to UrbanDigs, this price range has represented over 70% of all deals made since March 23.
One- and two-bedroom units all over town have even experienced some competitive bidding, as long as their prices reflect the new reality at 10% to 15% below top of the market prices. As one ascends the price ladder, however, the discounts get bigger; the trophy co-ops and condominiums, if they are selling at all, trade at 20% to 25% below their 2016 prices. And no buyers are overpaying.
Surprisingly, a lot of condo and home finders want to grab the opportunity. Long-term investors are taking advantage of the price drops and buying properties in New York that they can sell once things return to “normal.” Signed contracts in Manhattan have hovered around 150 per week since the end of July; in January the number topped 200 almost every week. The top end is steadily improving: of these 150, the Olshan Report indicates that deals at $4 million and over have gone from 12 and 14 in the preceding weeks to 21 last week, 16 of them condominiums and only 3 co-ops. This is the largest number of new contracts per week in this price category since 2014.