Manhattan’s first week of Reopening
Posted by Wei Min Tan on June 26, 2020
The Manhattan property market was on PAUSE for 15 weeks. This week, as part of Phase 2, we reopened. Property agents are showing again, with masks, hand sanitizers, a lot more disclosures. Here are the key observations from the 15 week lock down until today.
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Market Indicators
The overall summary is that sellers started relisting properties again but supply is still way lower than historical norms.
Supply of property for sale as of today is 5,969 units. This is 22 percent lower than last year but a 16 percent increase from prior month. The norm for this time of year is 7,000+ properties for sale.
New property listings this week is 621. This is double new listings last week, which had about 300. This metric is related to supply, mentioned above. Both indicate that more properties are being listed on the market but still much lower than what they should be this time of year.
There are 83 contracts signed this week. Out of the past 15 weeks, the low in terms of contract signed was roughly between weeks 9 to 12. Contracts signed in May was 84 percent lower than last year.
Deal example (below): Investor client’s apartment purchased right before the lock down at a good price, still lower than any I’ve seen at the building.
Weimin’s article, How recessions impact Manhattan property
A lot of people moved to suburbs
I hear that the Westchester and Connecticut markets are very busy with buyers coming from New York City. One attorney in Westchester informed that she had 50 deals last month! There are two reasons for this. (1) Those who can afford it are escaping the density of Manhattan (2) For the smaller apartment residents, moving back to their family home as offices are not reopening for the next few months.
This should be a temporary phenomenon. Similar to post 911, people will come back to Manhattan. City living means minimal commute time, a large selection of cultural and entertainment options, diversity of people from all over the world.
Rental inventory
The moves out of Manhattan created a lot of inventory for rent. Tenants looking for apartments now have more choices. Due to a new law in 2019 where landlords have to pay the landlord’s agent’s fees, this makes rentals more attractive to tenants as well.
We had minimal delinquency as result of Covid. 95 percent of our clients’ tenants continued paying rent. On renewals, we increased rent or kept rent the same for the vast majority of tenants.
Investors moving in fast?
Since Monday’s reopening, two out of six condos I wanted to preview for my investor client already had accepted offers! For the studio to one bedroom segment, could it be that global investors are aggressively moving in? It’s still a bit early to tell. I know that the world thinks Manhattan is on sale right now.
Weimin’s article, Buying property in New York
Bottom of the market
I feel the bottom of the market, for the best deals, was during the lock down. Buyers who viewed before lock down and signed during the lock down. That was while uncertainty was at the highest and hence biggest deal opportunity. During lock down, there was also no competition and sellers were most negotiable because they didn’t know what is coming. This is common sense and one should not expect prices now to be lower than during lock down. Kudos to those who took the risk and signed in late March/April/May.
Below: A loft, one of the most coveted, and likely most negatively affected, during this period.
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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