The NYC real estate market has had its share of challenges over the last few years. Of course, 2020 was unlike any other. Real estate business was suspended from March 22 through June 22 and while transactions did occur virtually, many of them had begun negotiations (or had been shown) prior to the shutdown. The good news is that since re-opening in June, signed contracts have been steadily increasing each week and the over $4M luxury market has been stronger in the most recent weeks. There have been 158 contracts signed over $4M since June 22 compared to 208 signed in the same period last year. Not surprising, the under $2M market city wide has shown the most activity with relatively little room for negotiation if priced appropriately.
It is no secret the current market favors buyers but the speculation that all sellers are desperate and will negotiate dramatically is misleading. Most people leaving the city are renters! And prices were already lower because over the last 2 years there was strong downward pressure on pricing largely due to the 2018 change in the Federal tax code where NYC lost state and local tax deductions. In addition, NY State increased mansion taxes in mid-2019 throwing another wrench in a weakened market. Add to that: an overabundance of new development properties and fewer foreign buyers.
While there are many challenges and unknowns, there are many reasons to be encouraged. Manhattan ended the Third Quarter 2020 on a positive note. Signed contracts were up 167% versus Second Quarter 2020 when the market was on “pause” due to stay-at-home restrictions. Furthermore, September saw sales turn an important corner: monthly signed contracts were up versus 2019 which is the first time that happened since February 2020. While pent-up demand from the lost spring market is certainly a factor in this uptick in sales, it does appear that demand is rebounding in Manhattan. Although supply, tax, and affordability challenges remain, lower prices, record-low interest rates, and easing Covid-19 restrictions will most definitely propel the Manhattan market back closer to the stronger sales levels we experienced at the start of 2020.
The Upper West Side
Some key takeaways from the 3rd Quarter:
• West Side sales fell 30% year-over-year. Resales fell sharply, but new development sales nearly tripled due to completions at 220 Central Park South, Waterline Square and The Park Loggia.
• Active Upper West Side real estate listings rose 31% year-over-year. Resale listings jumped, but new development listings fell 19% as Three Waterline Square and 200 Amsterdam were taken off the market.
• New development sales were the reason West Side price figures were higher. Median price increased dramatically and Average price per square foot spiked more than 50% due to a record of four closings over $10,000 per square foot, all at 220 Central Park South.
• West Side resale co-op prices fell due to a 20% drop in the market share of sales within two blocks of Central Park. Conversely, average prices of resale condos actually rose due to more sales near Columbus Circle and on 57th Street.
• New development prices stayed fairly level compared to last year as sales shifted to lower-priced properties versus last year when 40% were at 220 Central Park South.
If you are a buyer, there are great opportunities right now, especially if you are buying for the first time, upsizing or are seeking a pied-a-terre or investment property. Mortgage interest rates remain at historic lows: below 3% for a 30-year fixed loan. There is less competition with fewer buyers in the market and there are deals to be had. It is important to work with a knowledgeable and strong broker who can get the up-to-date information on listings both on the market and in contract and, most importantly, negotiate effectively on your behalf.
If you are seller, with so much competition, it is critical that that you do everything it takes to make your property stand out through staging, or simply rearranging furnishings. First impressions are key! Work with an agent that has the expertise to advise you on the physical presentation. Make sure they can create and implement an innovative and strategic plan to market your property and most importantly can guide you on proper pricing. And last, choose someone with a good sales skills and track record and great negotiating skills. These qualities are especially essential now!
Deanna Kory is a Licensed Associate Real Estate Broker at The Corcoran Group
She has 35 years of experience as a top agent in Manhattan and consistently ranks among the top 3 agents at Corcoran year after year. Not only has she called the Upper West Side home for nearly 4 decades, the predominance of transactions she represents take place here. She is known for her integrity, her calming guidance, her sharp analytic and negotiation skills, her expert knowledge in staging homes for sale and her excellent track record achieving high sales prices for her clients. Deanna heads a team of agents that are hard-working, smart, and ethical professionals as well as a creative and innovative marketing team. www.deannakory.com