March 2021 Market Overview

March 2021 Market Overview

  • Karp Dagan Team
  • 03/1/21

In February we saw signed contract volume rise 24% compared to January, a continuation of extraordinary winter numbers. Looking back six months ago, February 2021 also saw contracts increase 160% compared to September 2020. This is an amazing figure given that February is typically a very quiet winter month and September is usually very active. It’s a clear sign that the Manhattan real estate markets have bounced back and confidence is on rise.  Prices are not climbing just yet, but deep discounts have certainly faded. 

An Inventory Shortage Coming? This time of year we are used to supply going up, however it continues to go in the other direction and slowly dwindles. On the other hand, pending sales continue to go up, last week it was a 4% increase compared to the week before. Last week 346 contracts were signed in Manhattan: if that pace continues - around 300 contracts per week - over 15,000 units could be absorbed in 2021.....could even a city like New York that some proclaimed were being abandoned experience inventory shortages like most of the rest of the USA?

Biggest Rental Discounts On The Smallest Apartments Real bargain hunters are focused on size: As demand for larger apartments rises, studio and one-bedroom apartment prices are still plummeting. Tiny bargain apartments, which were becoming more popular before, are now becoming even cheaper as people want to upgrade to a live/work home. Manhattan studios are down about 20%, one bedrooms are down 18%, two bedrooms 14.5%, and three bedrooms at 15.5%. Manhattan’s ultra-luxury apartments (starting at $6,500 a month) didn’t get the same steep discounts the rest of the city did. They stayed about the same price as they were last time last year.

Rates on the Rise This year may have kicked off with the lowest mortgage interest rates in history, but the record lows aren't going to last. Rates are now starting to climb and are expected to continue heading higher throughout 2021. Just last week, mortgage rates rose to the highest point since August 2020. The average interest rate on a 30-year fixed-rate mortgage went up to above 3%, still almost half a percent lower than a year ago.

Luxury Market 36 contracts were signed last week at $4 million and above, extending the luxury market’s streak of 30 or more deals to 5 weeks in a row. In the last 11 weeks, 297 contracts were signed at $4 million and above totaling over $2.5 billion in volume. 208 condos, 47 co-ops, 3 condops and 39 townhomes. 

Mega Mansions The mega-mansion is selling in Manhattan again.....TWO $50 million-plus mansions on the Upper East Side have gone to contract within one week as the market rebounds from its Covid-induced coma.

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