The first two months of 2022 have delivered fantastic results for the Manhattan real estate market. Manhattan real estate was resilient even with the war in Ukraine, the Omicron COVID surge, skyrocketing inflation, and unstable equity markets. The median sale price in February was 30% higher than it was a year ago, days on market were down 14%, and there was 20% less inventory on the market. As far as rentals, we’re seeing record pricing, where the median rent in January jumped 18% compared to the prior year. Inventory was down a whopping 86% compared to last year, a record drop. Incentives for tenants have disappeared and bidding wars have emerged.
Supply Shortage New York is expected to add 33,000 housing units through 2024, 6,000 units less than the historic average. In core Manhattan, which excludes neighborhoods north of the Upper East and Upper West sides, the average yearly supply of rental units is projected to fall to 1,792 from 2,545. For-sale supply will fall to 1,518 units per year from 1,992. About 37% of new for-sale units in Manhattan will be for the luxury market, with as many as 800 luxury units coming online in Midtown. This can mostly be attributed to rising construction costs and changes to rent laws that have greatly undercut rental to condo conversions.
New Development Developments stayed strong in February and reported 402 sponsor contracts, a 35% increase from February 2021. They asked a combined $1.07 billion, or about $2.7 million per unit. Manhattan led the way in pricing, with 175 contracts worth a combined $719 million, or 73% more than in pre-pandemic January 2020. The median unit price hit $2.73 million, or $3,134 per square foot.
Luxury Market Manhattan’s luxury market remains on fire, even reaching another record as February drew to a close. In the first two months of 2022, 244 contracts were signed at $4 million and above. That’s the strongest start of any year since the reporting began tracking in 2006. The first week of February saw 41 contracts signed above $4million, which was the largest weekly total of the year.
Foreign Buyers Foreign purchases of US residential real estate dropped in 2021 to $54.4 billion, $11 billion less than in 2010 and down from $77.9 billion in 2019, down from 2017 when $153 billion was sold. In 2016 $102.6 billion was sold and in 2015 it was $103.9 billion. The threat of more restrictive foreign ownership restrictions and curtailed visas for foreign buyers along with covid travel restrictions decimated this audience. We expect they'll return now, especially European buyers seeking a safe haven in the USA.
Mortgage Update The volume of Jumbo mortgages more than doubled in 2021 compared to 2020. $48 billion worth, a 17 year high. In 2022 mortgage rates are already over 30% higher than a year ago and this will impact many consumer's home buying budgets further as rates rise further. Competing with all cash buyers could make things tougher to enter the home ownership world.
A Monumental 2021 for Compass The Real Deal's 2021 rankings show COMPASS recognized as the Top-ranked Manhattan Brokerage for Total Number of Closed Sales Transactions in 2021. COMPASS agents also sold 40% of Ultra-luxe Deals over $10M!
Karp Dagan Team Website We are pleased to share the launch of our new team website which can be found here!