NYC Apartment Buyers Emerge From ‘Coma’ to Drive Record Sales

Manhattan apartment sales had their biggest gain on record, driven by opportunity-seekers sniffing bargains in a borough that’s still recovering from the Covid lockdown.

In the second quarter, transactions surged 152% from a year earlier, the biggest annual increase in data going back to 1990, according to a report Friday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate.

NYC Apartment Buyers Emerge From ‘Coma’ to Drive Record Sales

Also a record was the proportion of deals completed below the seller’s asking price, at 92%. That was the biggest share since the firms started tracking the metric in 2008.

“New York is coming out of its coma,” said Scott Durkin, president of Douglas Elliman. “People who left New York and found primary homes out of the city, they’ve come back and said “‘OK, the dust has settled. Let’s figure this out.’”

Plummeting infection rates and reopenings of restaurants and cultural venues have lured back city residents who decamped to the suburbs last year. They’re returning to a market that’s still heavy on property listings, while mortgage rates are near record lows, making this an opportune time to strike a deal for a place they can afford.

NYC Apartment Buyers Emerge From ‘Coma’ to Drive Record Sales

For now, with the return to offices still just a trickle, there’s less competition. That may change in the coming quarters, when more workers tire of commuting from the suburbs.

“We’re going to see a compression of that Covid discount,” said Jonathan Miller, president of Miller Samuel.

Buyers in the quarter preferred bigger apartments. The average size of units that changed hands was 1,241 square feet (115 square meters) -- the second-largest since 2015. That helped push the median sale price for all deals up 13% to $1.13 million, the highest in eight quarters, Miller Samuel and Douglas Elliman said.

“People throughout the city think differently now about their lives,” Frederick Warburg Peters, chief executive officer of Warburg Realty, wrote in a separate report today. “They anticipate spending less time in the office, so space at home, both inside and out, has grown in importance.”

The biggest discounts in the quarter could be found in lower Manhattan and the Upper East Side, according to a report Friday by the brokerage Serhant. Condo buyers in those areas got listing discounts averaging 12%.

Buyer interest is still flowing. The number of contracts signed in the quarter -- a better real-time gauge of demand -- soared 619% year-over-year to a record 4,633 transactions, Serhant’s report said. It was the greatest number of deals in a single quarter since at least 2008.

The demand is likely to continue as foreign buyers, largely absent for over a year, eventually return, said Garrett Derderian, Serhant’s director of market intelligence.

©2021 Bloomberg L.P.

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