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Record for Transactions in Manhattan and Competition Heats Up at the Right Price

The market for New York apartments continues to accelerate, but only one in three has been listed at the correct price

A view of Manhattan. Photo: Terry W. Sanders

Manhattan Real Estate Sales Market Report 3Q 2021 

Let’s take a look at the residential real estate market in Manhattan.

There were over 4,523 sales in the 3rd quarter 2021, more than triple the number registered in the 3rd quarter of 2020 and still over 76% higher than the same period in 2019. It’s basically an all-time record for volume of transactions.

Median sales price was at $1,115,000, up year over year by +1.4% and by +8.8% from the same period two years ago. While the average sales price was $1,874,942, down 14% from 2,179,777, skewed lower by the fact that the mix of apartments-sold included more units of smaller dimensions.

Manhattan. Photo: Terry W. Sanders

But how long did it take to sell an apartment? Sellers: you might want to pay attention here. 152 days was the overall average for the 3rd Q, up 6.3% compared to last year. However, listings that were priced correctly and required no price adjustment sold within an average of 78 days and accounted for 30.3% of all sales, which means that only one in three homes was priced correctly from the start.

Those listings that did require price adjustments took an average of 181 days to sell, so 103 days more than a property priced correctly. Do you see how important it is to hire an agent who understands the market and positions your property for success?

Now, if you are looking to buy, let’s consider these other key statistics:

  • The Listing discount stood at 5.6%, down from 8.9% in the year-ago quarter.
  • The market share of cash purchases reached 48.6%, the highest share in two and a half years.
  • The number of apartments sold ABOVE asking price, in a bidding war scenario, rose to 8.3%, the highest market share in three years.

What are these numbers showing?

That competition is intensifying, buyers more and more often have to fight for well priced properties, and despite the low mortgage rates, are “forced” to offer cash in order to win.

Chrysler Skyline i Manhattan Photo: Terry W. Sanders

So, even though not yet at “full strength,”–for example, the number of bidding wars is still far from the 31% record set in the third quarter of 2015–the market is coming back big time. And the result, the Listing inventory, was down -17.4% from last year when it stood at a record high. The number of months to sell out all the inventory at the current market pace dropped to 5.1, the fastest market pace in six years. But buyer, don’t get discouraged, there are still plenty of opportunities out there.

South Florida’s  invasion of investors

According to the latest Redfin investor real estate report in July, home purchases by investors in Miami and Fort Lauderdale jumped a whopping 90% in the second quarter of 2021, compared with the same period the year before.

Investors bought 2,640 homes in Miami in the second quarter of 2021, up by about 91% compared with 2020. They purchased 2,163 homes in Fort Lauderdale in the second quarter, up by 183% from the same period a year ago, and they gobbled up 1,243 homes in West Palm Beach, a 53% increase from the second quarter of 2020, according to Redfin. While investments may have dipped in 2020 due to COVID, the numbers in 2021 were also higher than in 2019 for Miami and Fort Lauderdale (and slightly lower for West Palm Beach).

Before the pandemic, people didn’t have as much cash on the sidelines, and they used it to travel, go out to eat, and other sorts of things. Now they’ve got the extra income.

Real estate experts describe two types of investors — one who’s solely looking to make a buck and the second who intends to use the home part time while also taking a profit through rental or an eventual sale.

Based in New York City, Steven Michaelson, like so many others from the northeast during the pandemic, decided in December that he and his family could use a break from their Upper East Side condo, Covid restrictions and the cold. Michaelson, his wife and their three kids rented a house on Palm Island, minutes from Miami Beach. “We fell in love,” he told the Miami Herald.

The vacation, he said, quickly turned into a search for a second home. By February, the family landed their vacation pad, a 1,900-square-foot unit at The Continuum on South Beach for about $4 million. Michaelson said it will not only serve as a getaway — but also as an eventual profit center as it rises in value.

The Michaelsons already know how they’ll split their time in the years ahead. Summer in East Hampton, fall in Manhattan, and winter and spring in Miami. “Real estate is like an elevator,” Michaelson said. “It’s always going up. If you can own your own place, then it’s great to live in your investment.”




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