The Manhattan real estate market rebounded at a very impressive level throughout the first quarter of 2021, but discounts were prevalent and negotiability was buyer-friendly. Clear signs of real recovery were seen during Q2 from a market that had started to suffer around June 2019, when higher mansion taxes were introduced. Even with the upward trend in activity, prices are not breaking records and certainly don’t mirror the massive over bidding we see in other parts of the country. However, multiple bidder scenarios have begun to emerge and often pricing is landing closer to the ask. In some instances, depending on the asking price, homes are even selling above ask.
Q2 Recap Once written off as dead, Q2 data proves that the residential real estate market in the city that never sleeps is alive and thriving. Overall, Manhattan apartment sales volume in Q2 rose 144% year-over-year and 50% compared to Q1. What is driving the upward trend? A mix of factors including: pent up demand, reasonable pricing, low-interest rates, and an expanded pool of buyers. There is a high volume of West Coast purchasers fueling home sales in the city. This comes as the tech industry strengthens its presence in Manhattan, led by Google, Facebook, and Amazon. In addition to tech industry buyers, an uptick of millennial shoppers compounded with generational wealth transfers and suburban empty nesters looking for added excitement in the city point to a healthy stream of real estate activity for the foreseeable future.
While inventory was slightly higher, pandemic pricing seems to be a phenomenon of the past. For three straight quarters, average discounts have stayed steady at 9%, which means that sellers are willing to price appropriately and reasonably. Additionally, the luxury category in the $10 million to $20 million range witnessed a steep average sales price increase driven by a hyperactive market, particularly downtown, and both the Upper East Side, and Upper West Side. In summary, the city is back, and Q2 market data proves that the resilience of New York is strong. With vaccination rates in the city reaching over 70 %, in addition to an expanded buyer pool and renewed optimism all-around, the future of the residential real estate market in the city is bright.
The Luxury Sale Streak Is Over For 22 straight weeks, from February 1 and ending July 4th, 30 or more contracts were signed at $4 million and above in Manhattan. This absolutely shattered the previous record of 6 weeks that was set in the spring of 2015.
Penthouse Demand More than 220 penthouses sold in Manhattan so far this year, the most on record. That marks a 35% increase from the 164 penthouse contracts signed for the same period in 2019, prior to the pandemic.
Rental Market Heats Up Lease signings for New York City apartments hit record highs in June, leaving far fewer available than is customary at this time of year. For the third month in a row, Manhattan broke records with 9,642 new leases signed in June — the most since Miller Samuel began tracking in 2008. The number of homes available for rent in Manhattan is down 54 percent since January and 38 percent since May. Competition among prospective tenants is heating up with fewer homes available for rent. Landlord concessions have been waning, as 1.9 free months of rent were offered in June in Manhattan, the lowest it's been since August 2020.
Compass Launches Its Own Mortgage Company, called OriginPoint, with the goal of shortening the time to close for our clients and helping us reduce uncertainty and risk from the closing process.
