More apartments were sold in Manhattan in the third quarter than at any other time in the last 32 years, in the latest sign that New York City real estate is set for a faster-than-expected recovery, according to new market reports.
There were 4,523 closed sales of co-ops and condos in Manhattan in the third quarter, exceeding the record set in the middle of 2007, when 3,939 sales were recorded, according to Jonathan J. Miller, an appraiser and the author of a new report by the brokerage Douglas Elliman. The quarter ended with more than three times as many sales as in the same period in 2020, when the market was largely locked down because of the coronavirus, and with 76.5 percent more sales than the same time in 2019, before the pandemic.
“What we’re seeing right now is a catch-up,” Mr. Miller said, referring to pent-up demand after a year of near-record inventory for sale. “All the suburbs were booming while Manhattan was seeing sales at half the normal rate last year. Now we’re seeing this massive surge.”
The data comports with others companies’ findings. Sales volume topped $9.5 billion, the most in any recorded quarter, according to the brokerage Corcoran, while Brown Harris Stevens reported the highest quarterly sales numbers in eight years.
“The fire sale is long-since over,” Gregory Heym, the chief economist at Brown Harris Stevens, said about the discounts received during much of 2020. Those discounts were largely because of a glut of luxury inventory that existed even before the pandemic pushed prices down, and Covid “forced a price adjustment that had been needed for several years.”
Thanks to the uptick in sales, spurred by rising vaccinations and still-low mortgage rates, sale prices have already exceeded prepandemic levels in many segments of the market.
The median sales price in Manhattan in the last three months was $1,115,000, up 1.4 percent from the same period last year, and up 8.8 percent from the same time two years ago, Mr. Miller said. One-bedroom co-ops and condos, which make up the largest share of sales, sold for a median $800,000, up 3.6 percent from a year ago.
Competition is once again tightening. In the resale market, sellers cut an average 2.6 percent off their last asking price, the smallest discount in almost four years, according to Brown Harris Stevens.
Bidding wars are also returning, and the share of all-cash buyers, after falling to a seven-year low of 39.3 percent at the start of the year, is up to 48.6 percent of all sales, in line with the longtime average, Mr. Miller said.
But the market is far from fully recovered. There were 7,694 active listings in Manhattan, about 17 percent more than the 10-year average for the third quarter, Mr. Miller said, and a protracted return to the office for a large share of potential home buyers, some of whom may never return to five-day commuting, casts doubts on some analysts more sanguine expectations. A setback in coronavirus abatement and rising mortgage rates could also stunt momentum.
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Still, the surge in sales has been encouraging for sellers and their agents, who, for part of 2020, stopped counting days on market altogether, because of dim prospects.
At the pace of sales during the third quarter of 2020, it would have taken more than 20 months to sell off all the existing inventory — the second-worst pace of sales in more than two decades. This last quarter, there was just 5.1 months of supply, when the average in the last decade was 7.2 months.
“That’s why the market feels so incredibly fast,” Mr. Miller said. “I think we have a couple quarters ahead of us with a very brisk pace.”
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