1Q21 Manhattan: Back in a New York Groove

Nine weeks of 30+ $4M+ closings set a 15-year record. Pandemic discounts are limited, and in fact renovated property with low monthlies in great locations with private outdoor space is more valuable today. Multiple bids and above-asking trades are increasing in frequency. 

Despite the spring season, inventory remains low. The velocity of sales in most markets is leading to signed contracts exceeding new listings. Deals in 1Q21 exceeded half of those in 2020; this with the international market still largely absent. 

Drivers are pent-up demand from a slow 2020, low rates, high equities, and real estate hedging against inflation (with the stimulus it’s easy to imagine a declining dollar). New condo permits, while slowing in 2020 still exceed financial crisis levels, likely because financing is more readily available.

Average sales price and PPSF were down 7% and 5% Y-O-Y; the median price was up 2%. We advise not seeking the biggest discount, which often accompanies the least desirable product, but instead paying more for quality assets that hold value in downturns, appreciate over time, and remain liquid. Consider areas with temporarily high inventory and long-term promise and capitalize on the temporary leverage.

• Midtown West 3BD+ co-ops have 42 months of supply (March)
• Midtown East studio condos have 27 months of supply (March)
• Manhattan has 11.8 months of supply (March) 
• Average 3BD+ resale prices were down 15% Y-O-Y

People are more mobile than ever: we are hopeful NY state politicians modeled appropriately for wealthy moves to lower tax jurisdictions in their recent tax hike proposals. Regardless, there is still only one New York. 

Sources: Olshan Report, Manhattan brokerage 1Q21 Market Reports, Mortgage Bankers Association, Bloomberg, NY Post