Many real estate investors only dream of owning property in Manhattan. With a median home value of roughly $1 million, you can generally expect to pay $1,371 per square foot of living space in the Big Apple.
Of course, there's an upside to buying Manhattan real estate: Not only do you stand to profit in the form of capital gains, but rental property is perpetually in demand. And with a median rent of $3,450, an apartment in Manhattan is generally worth buying -- assuming you can swing one.
If you've been eyeing the Manhattan real estate market for longer than you can remember, now may be the ideal time to start seriously looking at making a purchase. The reason? Pending apartment sales have plummeted, making August a great time to put in an offer.
A surprising trend?
In July 2020, signed contracts for Manhattan condos were down 56% from the previous year and co-op purchases were down 57%, according to brokerage firm Douglas Elliman and appraiser Miller Samuel.
The reason? In the wake of the COVID-19 pandemic, a lot of Manhattanites are abandoning the city and seeking out larger, more private spaces in the suburbs instead. In fact, in July, pending sales for single-family homes in nearby Long Island were up 41%. In Westchester County, New York, they climbed 112%. And in Fairfield County, Connecticut, they rose 73%.
Incidentally, all of these suburbs are considered to be within commuting distance from Manhattan. And while home prices themselves may be comparable, the cost per square foot out in these suburbs doesn't come at the same premium as it does in Manhattan, which adds to the appeal.
Jump at the chance to buy
Clearly, there's not a ton of buyer demand in Manhattan these days, and that gives you a key opportunity to snag a home -- whether to live in yourself or rent out as an ongoing income stream -- at a serious discount. Some sellers, in fact, may be desperate to escape their cramped apartments and enjoy the wide open spaces of suburbia, and families in particular may be itching to get out in time for the upcoming school year.
The takeaway? Do your research and start making offers now, before the COVID-19 crisis becomes a thing of the past and buyer demand in Manhattan starts to increase. Chances are, once the pandemic is in everyone's rear view mirror, some of the folks who rushed to escape the city will realize how much they miss the conveniences of late-night delivery and a subway that runs 24 hours a day. Those same people could become your stiff competition in a year or two, so if you've ever wanted to own a piece of residential real estate in Manhattan, this could finally be your opportunity -- and the last thing you can afford to do is pass it up.