The resilient Manhattan real estate market entered a price recovery stage in Q3. After a record-breaking Q2 and an unprecedented 2020, we are seeing a healthy and balanced market correction. Overall, sales volume skyrocketed nearly 215% year-over-year, exemplifying strong consumer confidence in the value of Manhattan real estate and emphatically dismissing the narrative that the city is dead. A shortage of inventory further inspired buyers to act swiftly. New listings were down 30% year-over-year – this number represents a hyperactive Q2 and the seasonal summer slowdown. At just over 7,000 active condos and co-operatives, the market echoed similarities to 2014-2017, when inventory was at comparable levels, and the economy was rapidly recovering.
Q3 Recovery More apartments were sold in Manhattan in the third quarter than at any other time in the last 32 years, in the latest sign that New York City real estate is set for a faster-than-expected recovery, according to the New York Times. There were 4,523 closed sales of co-ops and condos in Manhattan in the third quarter, exceeding the record set in the middle of 2007, when 3,939 sales were recorded, according to Jonathan J. Miller, an appraiser. The quarter ended with more than three times as many sales as in the same period in 2020, when the market was largely locked down because of the coronavirus, and with 76.5% more sales than the same time in 2019, before the pandemic.
Q4 Will Be The Return Foreign Buyers The last quarter of the year will mark the return of foreign buyers, this on the heels of a United States administration announcement that the country’s borders will reopen to nationals from over 30 countries in November. Foreign buyers entering the buying pool means continued pressure on inventory as the city’s many attractions and beautiful homes make the city a desirable place to call home. With rents surging throughout the city we are starting to see foreign investors request showings for our listings.
Rental Market The third quarter of 2021 delivered a rental market with multiple offers, over ask bidding, and inventory shortages. With this we expect to see more renters who thought that renting would be cheaper, switch gears and become buyers, and investors will be returning as cap rates are on the up.
Luxury and Ultra Luxury Market 46 contracts were signed last week at $4 million and above, more than double the previous week’s total. It was also the biggest total since the week of April 19, when 56 contracts were signed (the highest total of the year). 32 of the sales were condos, 7 were coops and 7 were townhouses. This was the 11th time this year that 40 or more contracts were signed.
In the ultra-luxury sector, units priced at $20M and over, sales ballooned 50% compared to Q2. Still, the median and average prices were down 45.8% and 38.4%, respectively, attributed to price distribution changes throughout the bracket.
