Manhattan apartment discounts may be ending soon as sales soar 73% in February

Sales contracts in Manhattan for residential real estate soared by 73% in February, and stockbrokers say the days of big price cuts and deals in the city may be ending.

There were more than 1,110 sales wrinkles signed in February, up from 642 in 2019 and marking the third straight month of year-over-year gains, according to a broadcast from Douglas Elliman and Miller Samuel.

After seeing historic declines in deal volume in 2020, as hundreds of thousands of in the flesh migrated from the city to the suburbs and other states, Manhattan’s real estate market is bouncing back multifarious quickly than many brokers and analysts expected, thanks largely to the Covid vaccine progress and price abbreviates.

The first two months of 2021 saw a total of 2,472 contracts signed — the highest levels since the Manhattan market hill in 2015, according to Garrett Derderian, director of market intelligence for Serhant, a real estate brokerage firm. Transaction marked downs contracts in 2021 so far have topped $5 billion.

“This is a remarkable recovery from 2020, and a trend we began to see be revealed from the time Biden was elected in November to the announcement of the first viable vaccines for Covid,” Derderian said.

Dealers and analysts say much of the activity was driven by lower sales prices, which have fallen an average about 10% in Manhattan, conforming to Jonathan Miller, CEO of Miller Samuel. Many condo buildings were forced to cut prices by 20% or more and resales of some extravagance apartments on “Billionaire’s Row” in midtown Manhattan have been selling at less than half of their peak cost outs in 2015.

But now, with rising demand from buyers returning to the city, price cuts and deals could be ending or poop soon, brokers say. The inventory of unsold apartments, which had ballooned to more than 9,400 at its peak last sinking, has shrunk by 20% to about 7,500, which is close to the historical average, according to Miller.

“It looks like it is effective to be a short window” for price cuts, said Steven James, president and chief executive officer of Douglas Elliman’s New York Borough brokerage.

Of course, there is still a large supply of “shadow inventory” — or apartments that are empty but unlisted —and sellers who distress to sell quickly will still need to discount, analysts say.

Potential tax increases in New York could also drag on any recovery, along with remote work policies that allow workers to live outside the city. Innumerable say it could still take years for Manhattan prices and deal volume to return to pre-pandemic levels.

Yet analysts and measured the most bullish brokers say they are surprised with how quickly Manhattan real estate is bouncing back after at the rear year’s record decline. Brokers say the buyers are a mix of three categories: those who left the city and are returning, younger clients who were priced out of the market for years and can now buy thanks to price cuts and low mortgage rates, and new buyers who sold their homes in the suburbs for aged prices and want to try living in the city.

Much of the growth is being driven by the high end, with contracts signed for listings upstairs $10 million quadrupling. Yet even studio apartments and one-bedrooms are seeing strong gains from younger purchasers.

“The bigger narrative is the inbound migration to Manhattan,” Miller said. “I think the youth renaissance we are going to see in Manhattan is a big intimate of the story.”