The arrival of July 1 marks the end of one of the most remarkable neighborhoods in New York City real estate history. More than 30 contracts worth $ 4 million or more have been signed every week since February, the most outstanding record since the start of the 2008 recession. And not only, or even in the first place, these larger units are so popular. For almost every home at a good price ranging from $ 500,000 to $ 5 million, many offers have been made in both Manhattan and Brooklyn. The number of days on the market, which has historically averaged between 90 and 100, is now approaching 60. Many newly listed properties will not last even a week. All of these statistics paint a picture of how the local market is undersupply and fluctuates with demand.
By all accounts, the skeptics who wrote that New York was dead were predicted prematurely; Jerry Seinfeld was right! In fact, the city has a history of disaster recovery: the property market skyrocketed in January 2002, less than 4 months after 9/11, and again in late 2009 and early 2010, well before other countries began to recover from the 2008 recession. This time, as cities across the country were the epicenter of the first wave of the COVID-19 outbreak, many New Yorkers fled the city, ostensibly never to return. Of course, things look different now. After a school year in the Hamptons, Westchester, or Fairfield County, many people find they miss their old lives. Unfortunately for those who have abandoned their city homes, it has proven difficult to find a replacement, and it is getting more and more difficult. The total number of Manhattan properties for sale, which peaked in October 2020 at just under 9,600, stood at 6,675 last week. In addition, as travel opens up, national and international demand for New York City homes has risen again, further contributing to the decline in supply.
As always, the market is less generous with its gifts. Condominium sales, especially in the more expensive price tiers, far outnumber cooperative sales in both quantity and price per square foot. Olshan’s records for the past two weeks, which track more than $ 4 million in Manhattan contracts, show deals for 49 condominiums and only 17 co-ops. While the area below 14th Street is particularly popular for condominium sales on both the Upper West and Upper East sides, newly built super-luxury buildings such as Amsterdam Avenue 200 and 78th East Street, 151. they see goods flying off the shelves.
Meanwhile, co-ops worth $ 10 million or more languish, often for months, as a new generation of ultra-wealthy buyers are ambivalent about the constraints on co-op ownership. In addition, new buildings are ready to move in and require only finishing. However, their pre-war counterparts, lining West Central Park, Park, Fifth and West End Avenues, usually require some work, and often overhaul.
Today’s hot market may seem like a bubble, but it is not. Several factors contributed to the surge in home purchases in the wake of the pandemic. First, people throughout the city now think differently about their lives. They need a home office and may need a garden or terrace. They expect to spend less time in the office, which is why space at home, both inside and out, is gaining in importance. Secondly, as the city revives, there has been a sharp increase in demand from local, but also national and international buyers.
Finally, more and more older people are aging on the spot, removing an important source of inventory from the market. Taken together, this means that at a time when demand is sharply increasing, fewer properties appear on the market. At present, the ratio of supply and demand is shifting more and more sharply towards demand.
How long will this last? Almost certainly until 2021. Prices began to rise in New York, especially for condos under $ 5 million and the most popular new condos. It has been one of the hottest springs in history (in every sense) and the real estate community looks forward to a busy summer ahead.