May 2021 Market Overview

May 2021 Market Overview

  • Karp Dagan Team
  • 05/1/21

The Mayor’s recent announcement that New York would be back at ‘full strength’ by July 1, with stores, offices and theaters reopening, has created a frenzy of apartment inquiries, especially in the battered leasing market. The sales market has seen life throughout the start of 2021, with the exception of the Financial District and parts of Midtown lagging behind, as offices remained closed. We hope to see those areas catch up to the rest of the city in the not too distant future. 

Suburban Buyers Return Many baby-boomers, who were looking to sell after their children were grown, had virtually no audience for their large suburban homes after the devastating 2017 SALT tax deduction limit. 2020 however, changed all of that. Many of those who left the city a decade-plus ago are now returning, or buying a pied-a-terre in the city as well as in other areas. 

Luxury Market 42 contracts were signed last week at $4 million and above, one more than the previous week. This represents yet another milestone: 5 straight weeks of 40 or more contracts signed above $4M, the longest such streak since the Olshan Report started keeping records of such transactions in 2006. This is also the 14th straight week of 30 or more contracts signed at $4M plus. More contracts have been signed above $4M and above (694) so far in 2021 than all of 2020. 

New Development April was the best month for new condo sales in 5 years. Some 474 new development contracts were signed last month in New York City, according to Marketproof, which tracks sponsor sales across all price points in the city. The contracts were inked at 198 different condominiums. In Manhattan, 235 contracts were signed, up from 165 in March. It was the borough’s highest level of activity in three years.

Potential Tax Changes Large tax increases are on the table for wealthier could this impact real estate markets? It’s tough to tell at this time, although some proposed laws could directly impact real estate investment. However, this may not be as impactful on people's homes. Massive new capital gains taxes are of deeper concern. If someone earning $2 million in 2018 paid 50% in total taxes, how differently they will be impacted by paying 53% on $2.2 million in 2021 if their income rises? At the end of the day, most people may focus more on what they net and don't fully fathom the impact of taxation until tax day.

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