By: Hellen Zaboulani
Homes and rentals in New York City continue to drop in price, following the COVID-19 pandemic. While many landlords and building owners have been trying to hold on to their properties awaiting better prices, keeping apartments empty indefinitely is not a viable option for most. Many owners have come under pressure as mortgages, maintenance and taxes must be paid. Owners have unwittingly been selling at discounts and offering generous concessions.
The falling prices have led to “a home buyers’ bonanza in Manhattan,” as per an article by the NY Times. Savvy shoppers are buying at deep discounts, realizing that this is an opportunity to snag a deal in residential Manhattan real estate. As reported by the Times, the exodus from the city has forced developers to cut condo prices by up to 50 percent in certain parts of Manhattan including Tribeca and the East Village, making the market significantly weaker than other areas including Brooklyn and Queens. Manhattan’s luxury real estate has actually seen prices dwindle since 2017, followed by the pandemic which dealt a heavy blow.
While sales activity has started to pick up, prices haven’t. In fact, in the first quarter of 2021 a whopping 97 percent of the 2,457 Manhattan homes sold were at or below the asking price, the highest share since 2009, as per a Miller Samuel analysis reported by the Real Deal. Many large developers, which had started constructed during a peak market, are selling units in bulk or even converting to rentals, as a result of the weak market.
“From here on in, it has to go up,” Gary Barnett, the chairman of Extell Development Company told the Times, after admitting that three out of six of the company’s aggressive condos projects are expected to lose money. The Real Estate developer is not alone in conceding that loses must be taken and units must be sold despite the discounted prices.
Related Companies, one of New York’s biggest landlords, is also making deals at two of its projects. Residential condos at 35 Hudson Yards and 15 Hudson Yards are now seeing 23 and 17 percent discounts respectively. “Pricing is a reflection of market conditions, and as a result of current pricing there is really strong sales momentum,” said a Related spokeswoman.