2021 Contract Activity Jumps
Stats from the second quarter reaffirm Manhattan real estate’s amazing rebound. Following on the heels of a stellar Q1, surging pent-up demand and low interest rates continued to work in tandem to drive up the number of contracts signed. At this point, we have regained values that were lost to Covid discounts and, by and large, we are back to pre-pandemic pricing. It’s activity however, not pricing, that’s way up.
We emerged tentatively at first from 2020, a devastating global pandemic year of uncertainty, fear and loss. As the vaccine became more readily accessible, New York reawakened, and our market picked up steam by early February; March figures were off the charts, and then April, May and June followed suit. Since the first week of February, Olshan’s Report has recorded a steady clip of 30 or more contracts signed for the $4M and up category--a 22-week streak of accelerated contract activity besting the previous record tallied during the boom of April-May 2015. From February 1 through June 27 of this year, an astonishing 834 properties in this luxury product category went to contract--71.2% greater than the 487 contracts signed during the first half of 2019.
This year is likely to go down as one of the best years for contract activity. The increase in pending sales from Q2 to Q1 is a significant 34.6% gain--more impressive than the triple digit percentage increase in year-over-year stats of 634.6%. Why? Our market was frozen during and immediately after last year’s 15-week state ordered lockdown from March 10 to June 22 and had nowhere to go but up. In sharp contrast to Manhattan’s deep freeze, nearby suburban areas in Connecticut, Westchester and Long Island and out-of-state markets like Seattle, Aspen, and Austin, among others, experienced explosive growth in both volume and prices with properties selling over asking with multiple bidders waiving all contingencies in order to be competitive.
Consistent activity in pending sales has characterized much of this year. We are seeing the following emerging trends and expectations:
● Competitive bidding has returned for realistically priced properties, though we are still in the early phase of a transitioning seller’s market. .
● Suburban empty nesters are coming back to NYC, and they are paying cash for pied-à-terre residences in top buildings.
● As travel restrictions ease and tourism returns, we can expect the return of foreign buyers.
● As more businesses will require employees to work in offices for at least part of the week beginning in September, look for increases in pied-à-terre purchases.
● Buyers are paying up for condition, views and outdoor space. Properties that require renovation will need to be discounted steeply to overcome expected delays caused by DOB permits and board approvals for improvements.
● Some listings that have lingered on the market and grown stale may be ripe for the picking.
With five consecutive months of sustained signed contract velocity, the pulse of the market and momentum going into the second half of 2021 are strong. Forget about seasonality, at least for the summer months, as the market is extremely busy at the start of July with buyers and sellers moving to parity. With half the year in front of us, now is the time for sellers to seize and leverage this moment. There will be greater competition after Labor Day. New York is decidedly back; restaurants are buzzing again, and live events are resuming for socially starved New Yorkers. It’s time to secure a piece of the Big Apple residential pie. Buyers and sellers, I am at your service, as always.
Shirley Hackel, NYRS®
shirley.hackel@compass.com | (914) 980-0371