As momentum shifts from the suburbs to urban centers and international travel returns, New York’s stunning turnaround is predicted to continue in 2022.
New York’s Housing Market is Back
Because New York was an early COVID hot spot, its housing market had a year of depressed sales and prices. Manhattan’s housing market was about six to nine months behind the rest of the country in terms of high demand and soaring prices.
All of that changed in Q3 2021 when a record number of apartments, 4,523, were sold, (the most apartments sold in Manhattan in more than three decades), and the median sale price hit $1,115,000, an increase of nearly +9% over Q3 2019 pre-pandemic, according to data from the latest report by the brokerage Douglas Elliman.
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The author of this report, Jonathan Miller, President and CEO of Miller Samuel Appraisers, said, “Everything is off the charts. Not only on a year-over-year basis, where there can be distortions, but compared to two years ago, sales are still way up.”
Brooklyn & Queens Also in High Demand
Sales in Brooklyn and Queens also pushed sales and prices to higher record highs than ever before.
The median sale price for apartments in Brooklyn during Q3 2021 hit a record $828,351 while the average sale price hit $1.02M, both record highs, according to Gregory J. Heym, chief economist with the brokerage Brown Harris Stevens.
Heym said, “A lot of people went to Brooklyn and Queens to escape Manhattan.” Both offered buyers a larger choice of single-family homes, green space and relative affordability when compared to Manhattan.
In Queens, Patrick Smith, an agent with Corcoran indicated there were twice as many sales from January to mid-November 2021 compared to the same time frame in 2020 and the highest sales volume since at least 2006. Smith also indicated that the median sale price in Queens during November 2021 hit $995,000, an almost +9% y/y increase.
Renewed Confidence in Manhattan’s Luxury Sector
The sudden turnaround that showed its cards in Manhattan’s housing market during Q3 2021 was driven by affluent renters and buyers who had the means to move. During March 2020 to June 2021, some 254,500 households, an increase of +106% of out-migration households compared to the pre-pandemic baseline, that could afford to leave the city did so. Q3 2021, those affluent renters and buyers became in-migration households in Manhattan.
According to Donna Olshan, president of Olshan Realty, 1,877 contracts were signed for units priced at or above $4M during the third week of December alone, almost 3 X the number of $4M+ sales in 2020 and the most signed contracts of units priced at or above $4M+ since at least 2006.
Olshan said, “I think it was pent-up demand. They were buying New York at a discount (an average discount of –9% from listing to contract). Some of them would walk through a plague to get a deal.”
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Pandemic-Spurred Renter Discounts in 2021 Disappearing in 2022
Renters, who had the unheard-of advantage of steep discounts just one year ago, are now being faced with sticker shock rent increases of +30% – 40% as many leases are expiring at the beginning of 2022.
Even in November 2021, renters were gasping when median rents shot up by +24%. Now, in the midst of a buoyant rental market, hundreds of thousands of renters are at risk of losing their homes when the statewide moratorium on evictions ends in mid-January. Renters in parts of the Bronx, Staten Island and Queens, many of whom are essential workers, are most vulnerable.
Thanks to The New York Times.
