New York Home-Purchase Contracts Plunge With Showings Banned

(Bloomberg) -- Turns out, New Yorkers want to see an apartment in person before spending millions on one.

The state’s pandemic lockdown, which outlawed face-to-face real estate showings, brought purchase agreements in Manhattan and Brooklyn to a near standstill in May, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate.

Contracts to buy Manhattan co-ops fell 80% from a year earlier, while condo deals plunged 83%. In Brooklyn, signed co-op agreements tumbled 76%. Condos there fared better, with a 44% decline.

“The market isn’t functioning yet,” said Jonathan Miller, president of Miller Samuel. “People as a general rule are not buying off a virtual tour.”

Manhattan listings priced at $5 million or higher fared the worst, with only 6 such condo deals signed last month, and one co-op contract. That compares to 52 deals in that price range in May 2019.

Most buyers who signed deals last month either viewed the property before the shutdown, or made the contract contingent on seeing the home once the restrictions ease, Miller said. New York City is expected to enter its second phase of reopening Monday, allowing in-person showings to start again.

For now, with so few contracts, there’s not enough price data to make conclusions about where values are headed.

“The thinking is that this market condition means prices are weaker than they were pre-Covid,” Miller said. “I don’t think you can have price discovery until the market opens -- and then, it will be immediately apparent.”

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