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NYC and COVID-19

What happens to NYC residential real estate if there's a recession?

 

Condo and apartment contracts in Manhattan declined by more than half in July. However, several NY suburbs have more than doubled their numbers, showing a preference buyers have for non-crowded areas during COVID-19.

Co-ops and condos sales in Manhattan have declined 57 percent compared to last year. Co-ops are priced at $4M to $10M down over 75 percent.

Meanwhile, new apartment listings are surging once again, jumping by 8 percent in July compared to last year. The amount of unsold units has grown to its highest point in almost a decade. Experts estimate that there is more than a 17-month supply of apartments with the current sales rate which means that there's more than double the normal average.

As the pandemic worsened March thru late June, real estate agents were not able to organize showings or open houses, and many New Yorkers left the city for the suburbs.  Several New Yorkers purchased new primary homes and secondary homes in suburbs within a two-hour radius from NYC. This is why contracts in the Hamptons increased by more than double in July, having over 260 signed contracts. 

The state of Connecticut has highly benefited from buyers' new behavior, having more than 1,200 signed contracts in Fairfield County, CT, while Greenwich, CT grew 72% in July.

Despite this trend, agents who remembering the Great Recession and Sept. 11 believe in a quick recovery, and a bright future once the vaccine is found.

Brokers estimate that market will have to adapt, like by lowering prices of condos. New developments will have to compete in a market saturated with unbelievable high prices over the past few years, and we already see it happening. As of last Wednesday, a luxurious new condo building in downtown Manhattan announced price cuts on more than 50 percent of their units. It seems like NYC has lost some clout tokens, but we're sure it'll find it's footing soon.

 

Remember to contact us at Castles Unlimited with all of your real estate needs.

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