By: Ilana Siyance
New York City residential real estate has begun its rebound.
The pandemic ravaged New York City in so many ways, leading to an exodus of fleeing residents. Now though, demand is back up. As reported by the Wall Street Journal, New Yorkers are upgrading to bigger homes, out-of-towners are moving in, and investors are seeing an opportunity too good to miss.
There were over 4,500 Manhattan condo and co-op sales closings from July to September 2021, as per a recent Douglas Elliman market report. The sales made this the most active third-quarter in over three decades, the real estate company said. In the second quarter of 2020, median sale prices for Manhattan condos and co-ops had tumbled, hitting a low of $1 million due to the pandemic, dropping almost 18% below the same period in 2019, as per Jonathan Miller, chief executive of Miller Samuel Inc. The lower prices were a result of the fear induced flight out of the crowded city. Since then, however, prices have been edging back up and Manhattan median prices are back to pre-pandemic levels. In Brooklyn and Queens too, median sales prices reached all-time highs, and the housing market is booming.
“Many of these people saw what happened after the [housing market] collapse in 2008,” said Donna Olshan, head of Olshan Realty Inc., a NY residential brokerage firm. “They saw that when New York goes on sale, it’s for a short period of time.” This NYC price rally is not led by international buyers, as the previous frenzies had been. Covid-19 travel restrictions kept foreigner buyers limited. International buyers made up only 11% of new-development sales in the third quarter, compared to about 28% in 2019, said Pamela Liebman, CEO of Corcoran, a real-estate agency.
New Yorkers themselves scooped up 53% of sales last quarter, as per Corcoran, brokers also said there was strong interest from New Jersey, Connecticut, and California buyers looking for a second home. That doesn’t mean international buyers won’t join the rally, though. In November, tourism will open up to vaccinated foreigners and Ms. Olshan told the WSJ, she believes this will help real estate sales continue to flourish through the first quarter of 2022.
No doubt, NYC still has many hurdles to overcome following the pandemic. There is still homelessness, growing crime, and retail and commercial space is still suffering from vacancies. Still, we are now on the path to a powerful rebound. Thanks to low interest rates, and strong stock portfolio performance residents are ready to make a long-term bet on the city’s resilience.