When the coronavirus pandemic first hit U.S. soil, New York City was dubbed its epicenter. And not shockingly, that caused residents to flee the city in droves. That dealt Manhattan's residential real estate market a very unfortunate blow.
By mid-2020, signed contracts for Manhattan condos and co-ops were down 56% and 57%, respectively, from the previous year. And for the rest of 2020, apartment sales were extremely sluggish.
But recently, things have been looking up for Manhattan apartments. In fact, during the third quarter of 2021, more Manhattan apartments were sold than at any other point over the past 32 years.
Manhattan has made its comeback
In the course of the last quarter, Manhattan saw 4,523 closed sales of co-ops and condos, surpassing the record set in 2007 when 3,939 sales went through, reports Douglas Elliman. The quarter also ended with three times as many sales as in the same period in 2020.
Last year, home sales in New York City's suburbs soared as buyers prioritized square footage and outdoor space over proximity to office buildings and nightlife. But now that the city has reopened and more and more companies are beginning to call workers back to the office, the demand to buy in Manhattan has increased exponentially.
Prospective buyers looking to purchase Manhattan apartments shouldn't expect the deep discounts that were offered throughout 2020, though. Back then, real estate investors were desperate for buyers and offered steep price reductions in an effort to get contracts signed. Now, investors have the upper hand. So, buyers should expect to pay a premium for a Manhattan home in the near term.
Over the past three months, the median sale price of a Manhattan apartment was $1,115,000, up 1.4% from the same time last year and 8.8% from the same time in 2019. One-bedroom co-ops and condos, which comprise the largest share of recent sales, sold at a median price of $800,000, up 3.6% from the same time last year.
Bidding wars are also coming back to Manhattan. And the share of all-cash buyers is up as well. During the past quarter, cash offers represented nearly half of all apartment sales in the city.
Great news for investors
All this is very encouraging for not just real estate investors looking to unload Manhattan properties but also the city's residential landlords and local businesses. At this point, people clearly want to move to New York City rather than run far away like they did for much of 2020. And an influx of residents could be a boon to Manhattan-area restaurants and stores, many of which are struggling in the absence of a full-time return to office work.
If things on the COVID-19 front manage to improve over the next few quarters, the city's real estate market could enjoy a solid revival after a very challenging year. And a lot of investors could profit from that revival tremendously.