While overall residential contract activity in the city continues to lag behind prior years’ levels, the battered industry ended the year off on the upswing, according to an analysis of brokerage reports.
Co-op contracts signed in Manhattan exceeded 2019’s levels for the first time in December by 17.6%, condo sales were up 6.3%, according to a Douglas Elliman report. At Compass, contract activity was up 4% compared to the fourth quarter of 2019 and 8% at Corcoran over the same period.
“It’s encouraging in the sense that we’re seeing inventory decline from last quarter as well,” said Jonathan Miller of Miller Samuel, who authored the Elliman report. “There’s been a noticeable pivot where metrics show improvement relative to the lockdown or Covid period norms.”
Increases in deal volume were especially high since the third quarter with a 43% uptick at Corcoran and 39% at Elliman according to Miller, which spell good news for the beginning of 2021.
“As we enter a new year and with multiple vaccines available, the election results certified, and with record low-interest rates, we can expect a Manhattan real estate renaissance in 2021,” said the Compass report.
New development sales also continued to inch up each quarter since the pandemic began, according to data from Brown Harris Stevens Development Marketing. The absorption rate was up 27% during the quarter compared to 2019, and 32% since the previous quarter.
Manhattan inventory increased by 29% year over year for the quarter at Compass and 36% at Corcoran, though luxury apartment inventory for units priced at $20 million or more fell by 36%, according to Compass. Elliman reported a 32% decline in co-op and condo inventory for the month of December between 2019 and 2020.
That’s a sign that owners are confident in their homes’ long-term investment, the Compass report said.
On average, rising inventories caused prices to fall. “Sellers reduced prices and negotiated as buyers gravitated to more space in properties demonstrating clear value,” said the Corcoran report, especially on the West Side where the average price per square foot fell by 24% thanks to a smaller market share for apartments along Central Park.
Sales volume in Midtown saw the steepest decline over the year, with a 42% drop in contracts and a 14% increase in units on the market. Upper Manhattan and the Financial District showed the next highest decreases in contract signings, followed by Downtown, the East Side and the West Side.
Manhattan has shown a steady upward grind in contract activity since April and for the first time exceeded the levels reached in the pre-pandemic era, said Miller.
“What’s significant about that is the entire region has been showing year-over-year sales growth with the help of record-low mortgage rates except for Manhattan. This is the first time Manhattan has shown year-over-year gains that the New York City metro area had been seeing since the summer. “
Sales for the entire year are still about 20% below 2019 levels, he added, but the outlook for 2021 remains positive.
"With average discounts of 12% off last asks [for new developments], consecutive quarters of growth, and a vaccine in distribution, 2021 should continue to mount a comeback for Manhattan in terms of absorption and price stability," said Robin Schneiderman, a managing director at BHSDM.
“The robust contract activity in Q4 will be reflected in the sales in the first quarter of the year,” said the Compass report, “and we expect this momentum only to accelerate.”