August 2021 Manhattan market update
Posted by Wei Min Tan on August 5, 2021
The Manhattan, New York residential property market is currently a seller’s market. The key points to note in the August Manhattan property market are:
1. Tight supply
2. Interest rates at historical lows
3. High sales volume but prices are still lower than the prior peak, the Manhattan property market is not in a bubble
August Manhattan Market Update 7 minute video
Manhattan New Development
The new development market saw a surge in sales volume with increases of 19.2 percent and 145.3 percent compared to Q1 and prior year respectively. New development refers to newly launched buildings where the buyer would book, wait for 2 years for completion and then close when the property is completed.
Weimin’s article, How to buy new launch property in Manhattan
Manhattan Supply
Since November 2020, the market has been picking up and now we’re in a seller’s market. Shortage of supply is the issue and demand is exceedingly strong, driven by record low mortgage rates, pent up demand from 2020 and optimism from the Covid vaccines.
Deal example: Client’s three bedroom investment condo, where we got the best price per sqft in the building in recent years. Post pandemic, renters are looking for larger apartments with more space. That was a key driver behind investing in this three bedroom condo.
Pending Sales
The bottom of the Covid market was between May to July 2020. Since then, pending sales, referring to contracts in pipeline waiting to close, has been increasing every week until very recently when it started coming down a bit. There’s some stabilization which is good from a buyer’s perspective but since March of this year, it has been a seller’s market. Why? Because demand exceeds supply.
Comparison of carrying costs
If you own a condo, the carrying costs would be the mortgage, common charges and the property taxes. If you own a coop, then the carrying costs would be the mortgage and the maintenance. If you rent, it’s just the monthly rent.
In Manhattan, the cost of owning is always higher than the cost of renting. Why do people still own? It is because owners benefit from the appreciation and renters do not.
What We Do
We focus on global investors buying Manhattan condos for portfolio diversification and long term return-on-investment.
1) Identify the right buy based on objectives
2) Manage the buy process
3) Rent out the property
4) Manage tenants
5) Market the property at the eventual sale
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