The average weekly signed contract volume in Manhattan and Brooklyn has been incredible in the first half of the year. Over 400 contracts were signed per week in Manhattan throughout May 2021, a very high level. This is being driven by several factors, yet over 85% of this activity is in the sub $3 million range. Most importantly, those who predicted the demise of New York City are being proven wrong. Successful vaccine efforts, a highly anticipated mayoral race, and low interest rates, combined with pent-up demand and more 'affordability' have helped drive an upward trending market.
Luxury Market Streak Continues Thirty-one contracts were signed last week at $4m and above in Manhattan, 9 fewer than the previous week. The good news: last week’s total extended the record streak of 30 or more signed contracts above $4m and above to 18 weeks in a row.
Record Breaking Townhouse Market Five townhouse contracts were signed last week, adding to the year-to-date total of 95 townhouse sales. At this point, it’s the most townhouse deals on record in recent history to start a year. The previous highest January to June total was in 2015, when 72 townhouse contracts were signed. This could be contributed by the pandemic attracting more buyers to large, private living quarters that afford outdoor space. One thing to note, the year-to-date average townhouse asking price is $10,492,164 and the average size is 5,749 sqft. This translates to $1,825/sqft which is not all that dissimilar than past years.
Cash Is King 25% of all sales nationally were all-cash deals in April, up from 15% from a year ago. This is a good indicator of the stiff competition a significant number of purchasers face. Many buyers are no longer competing with those merely seeking a home to live in. In fact, the number of investors in the market has increased from 10% to 17%, while the amount of first time home buyers has decreased from 36% to 31% from a year ago.
New York Rental Rebound In May, the number of new leases jumped more than 400% from a year earlier to 9,491.
Commercial Real Estate The pandemic hit the commercial real estate particularly hard, probably the hardest of all. Property tax bills now reveal just how hard. New York City expects property tax revenue to drop by $1.6 billion, or 5%, in the coming fiscal year, Bloomberg News reported. That’s the biggest drop in the city’s largest source of revenue since the early 1990s. Office buildings’ market value — not their real-world worth, but the metric used by the city’s Department of Finance — dropped by 16% across the city, according to the agency. The value of some major skyscrapers was cut by more than $100 million, the publication reported. The value of hotels and retail property fell by more than 20%. However, New York City hotel occupancy has bounced back faster than expected, according to the mayor’s office. Occupancy last weekend reached 72%, much higher than most predictions.
