New York Apartment Prices Q3, 2020
Posted by Wei Min Tan on October 4, 2020
New York property report: Q3’2020 Manhattan condo market
This Q3 property report reflects contracts that were signed during and after the COVID 19 lockdown. COVID-19 shut down the Manhattan property market from mid March until June 22, after which Manhattan real estate reopened as part of NYC’s Phase 2 Reopening. The below are key metrics for the Q3’2020 Manhattan real estate market.
Key Point 1: Sales volume down 46 percent
For the overall condo and coop market, sales volume in Q3 declined by 46 percent compared to year ago. This represents the second largest drop ever, with the largest drop being in Q2’2020. In Q2, the market was shut down hence preventing property viewings, contract signings and closings. Q2 marked the largest sales volume decline of the past 30 years. Specific to condos, sales volume in Q3’2020 was down 43 percent.
Key Point 2: Q3 listing inventory up
In Q1 and Q2, sellers were wary of listing property for fear of strangers visiting their homes (and bringing the virus). As result, listing inventory declined in Q1 and Q2 and there was pent up supply. During the week of June 22, the first week of reopening, new listings went up by 500+ properties that week alone. Q3 saw pent up supply continue to be released into the market. Q3 listing inventory was 9,319 for the overall condo/coop market, the fifth highest in the past 20 years. The highest level of inventory was during the Great Financial Crisis in 2009. Specific to condos, inventory was at 4,464 units, an 18.7 percent increase vs year ago.
Deal Example: Investor client’s condo at 200 Chambers Street, luxury building in Tribeca with premium price and rents. Purchased at approx $1.5 million. The low carrying costs and high demand make this a good investment. Located next to Whole Foods, World Trade Center, Goldman Sachs headquarters. This apartment faces the building’s zen garden and comes with a washer/dryer within the apartment.
Weimin’s article, Investing in Tribeca property
Key Point 3: Listing discount 10.3 percent, months of supply +108%
Listing discount in Q3, the different between contract price and listing price, was 10.3 percent. This reflects negotiability and an 11 year high. Contract signing was lowest during the shut down period, and buyers who entered contract then got the largest discounts.
The months of supply, reflecting how many months it takes to sell current inventory, was 21.9 months for condos, a 108% increase from prior year.
New York (Manhattan) Q3, 2020 Condo:
Negotiability, reflected in the listing discount of 10.3 percent, was the highest in 11 years. Number of sales declined by 43.2 percent.
Average price and price per sqft increase is because it is comparing against Q3’2019. In Q3’2019, the price of closed apartments skewed lower. Reason is that higher price point apartments all tried to close in Q2’2019 due to increased mansion taxes for higher price apartments which became applicable starting Q3’2019.
Average price $3.392m (43.3% vs prior year)
Avg price per SF $2,016 (+3.3%)
Number of sales 612 (-43.2%)
Listing inventory 4,464 (+18.7%)
Listing discount 10.3%
Days on market 169 (+77.9%)
Months of supply 21.9 months (+108%)
Deal Example: Client purchased this unit at 88 Greenwich Street. 17th floor with double height ceiling and water views. One block from World Trade Center means strong appreciation potential. There are 4 new residential condos coming up in the area, all with much higher prices per square foot. The areas is transforming and 88 Greenwich will benefit from it.
Weimin’s article, Investing in a Manhattan penthouse apartment
Residential Rents August 2020:
The rental market was hit much worse than the sale market. Offices all have work-from-home policies until 2021. As result, many tenants didn’t renew leases and moved out of Manhattan temporarily, to save on rent and because much more space is needed when everyone is working/schooling from home. Rental inventory increased 166 percent to 15,025 units and vacancy rate shot up to 5.1 percent.
Average Rent $4,038 (-4.0% vs prior year)
Rent per sqft $62.97 (-9.7%)
New development sales volume fell by 39.4 percent. Listing discount 8.5 percent, compared to 8.9% in Q2 and 2.6% in Q3’2019 (without COVID).
Average price $5.866m (+54.5%)
Avg price per SF $2,793 (+6.4%)
Number of sales 214 (-39.4%)
Listing discount 8.5%
Months of supply 14.6 (+73%)
Sales share of market 15.6%
Data Source: Miller Samuel
Article updated Oct 4, 2020
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