Manhattan Real Estate Finally Bounces Back to Normal

The volume of sales surges back to pre-pandemic levels, but prices are up just slightly.

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As vaccination levels rise and businesses reopen, residential real estate has finally bounced back to where it was before Covid devastated New York.

In Manhattan this spring, the number of apartments that sold was more than double what it was a year ago, when the city was locked down in the early days of the pandemic, according to a half dozen market reports released Thursday.

Though in many ways the market had no where to go but up — apartment showings were restricted for most of last spring — the surge in closed deals is even strong by historical standards. Not since 2015, a time of a major boom, has there been a three-month period with comparable activity, the reports show.

There was more of a mixed picture in terms of prices, with co-ops and condos trading for an average of $1.9 million and a median of $1.1 million, up slightly from last spring. Brokers say the so-so improvement can be explained by an oversupply of apartments, which has fueled discounts.

But the spike in sales volume seems to have the real estate industry wiping sweat from its troubled brow.

“The way people were looking at the city a year ago, it would now be a dystopian hellscape with nine people left in Manhattan,” said Jonathan Miller, the appraiser who wrote the report for the brokerage Douglas Elliman, referencing early fears that many New Yorkers would decamp permanently to the suburbs or second homes outside the city. “But it seems that cooler heads have prevailed.”

Though the count of total sales varies from firm to firm because of different methodologies, all showed huge spikes in activity, versus spring 2020, but also compared with this winter.

There were 3,417 completed deals from April to June, versus 1,357 deals a year ago, according to Elliman, for a gain of 152 percent. Even when measured against the January to March quarter, when Manhattan had 2,457 sales, this spring seemed particularly busy.

In the third quarter of 2015 — the most recent high point — there were 3,654 sales, Mr. Miller said.

The Corcoran Group’s report showed a similar increase in sales. “A year-and-a-half after the pandemic began, it’s safe to say that New York City has its mojo back,” Pamela Liebman, Corcoran’s president and chief executive, said in a statement.

Buyers over the last few months gravitated toward co-ops, a housing type that had seemed to lose some favor in recent years. Co-ops accounted for 49 percent of all deals, versus 37 percent for existing condos, according to Corcoran. And in the frenzy of the post-pandemic market, downtown seems to have benefited at the expense of uptown, according to Compass, which reported that neighborhoods like Chelsea, SoHo and the East Village accounted for 31 percent of all deals.

For Elizabeth Stribling-Kivlan, a senior managing director at Compass, one of the spring’s most heartening developments was improvement in the financial district, a neighborhood that became a veritable ghost town during the pandemic with the emptying out of office buildings. Median prices there soared 33 percent in a year, the largest increase of any neighborhood, she said.

Yes, shuttered stores, sleepy business districts and gun violence make Manhattan feel different than before, she said. But with more workers expected to return to offices this fall and beyond, the borough should soon start to resemble its old self.

“People are feeling like they want to come back there, they want to see what will come out of this,” she said. “It’s a new era for us.”

Prices, though, may have a ways to go. The price per square foot for resale apartments, which is a useful indicator because it controls for the apartment size, Mr. Miller said, actually declined this spring over a year ago, to $1,408 from $1,461, or 3.6 percent.

“Prices are still not at parity with a year ago,” he said. The overall discount that buyers are paying on list prices is at 6.4 percent, which is better than 2020 but still higher than the decade average of 4.9 percent. “There still is a Covid discount out there,” Mr. Miller said, “but it’s easing.”

Increased inventory in Manhattan also may contribute to the gap between asking and selling prices. There were 7,880 unsold apartments this spring, up from 6,225 in spring 2020, when many sellers pulled their apartments off the market over fears of having strangers in their homes.

And while bidding wars have become the norm in many suburban towns, they accounted for only 6.8 percent of all deals in Manhattan this spring, versus 31 percent in the hot market of 2015. “This market is a return to normal,” Mr. Miller said, “whatever ‘normal’ means.”

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