POST COVID: WHERE ARE THE DEALS AND WHERE CAN SELLERS YIELD PROFITS?

Which neighborhoods are the most depreciated by Covid?  Is anywhere in Manhattan a seller’s market again?  Are the greater discounts in the condo or the coop markets?  

Clients have been asking me these questions all year and since most official market reports offer only macro-views, we decided to dig beneath the surface to provide intimate snapshots of each major Manhattan neighborhood sub-market and what you can expect in today’s landscape ON THE GROUND.

Tribeca has been a relatively static or declining market in the ensuing years since the market peak of 2015. But due to the typically larger sizes of Tribeca apartments, compared to their counterparts uptown or in Brooklyn, we’ve seen an interesting influx of younger buyers flood the Tribeca market during and after Covid. This has resulted in a nice resurgence in activity and even pricing. In February of 2020, the average price of a 3BR condo was $6.024M, yet by June 2020 the Covid discounts brought the avg price down to $4.572M and by October it was a dreadful $2.684M. However, as of June 2021 the avg price of a 3BR condo has shot up to $6.609M. Tribeca may be seeing a resurgence in the remainder of 2021 and looks to be a hot market again by 2022 if not already.

Chelsea is one of the most advantageous prime locations currently available to buyers looking for deep discounts. For example, in Jan 2020 the average price for a  3BR condo was $6.2M.  In May 2021 the average price was $3.622.  A combination of the glut of new high-end inventory along the Highline and the Covid/Post-Covid market being generally unavailable to foreign buyers due to travel restrictions has caused depreciation. 

In the years following the 2015 market peak, the LES was poised to receive one of the greatest development and infrastructure additions in all of Manhattan, second probably only to NoMad, thanks to scores of new luxury condos of a quality level heretofore unseen, along with the expanded/upgraded Essex Market in its center. But with Covid making other more prime areas like Chelsea and Tribeca available for a discount, the LES has suffered as a result, and many sellers who acquired new development condos in 2016-19 have had to liquidate at a loss.  So this is a good opportunity for buyers to come in and reap 10-20% discounts off original acquisition pricing, and we are still very gung ho for the future of this area and buyers would be wise to invest here now.  For example there were more sales of 2BR condos here during the months of April-May 2021 (39) than all of 2020 (36).  Pricing has not improved but the buyers are clearly taking advantage of the inventory.

Harlem, probably one of the hardest hit during Covid saw a drastic fall in prices. The drop comes more in East Harlem rather than West Harlem although Harlem overall remains a buyers market. The median list price of homes in Harlem was $795K in June 2021, trending down -20.1% year-over-year. The median listing price per square foot was $968. The median sale price was $649.5K.

It’s probably not a surprise that Covid really took the wind out of the sails of Hudson Yards condo product.  The premium buildings are selling modestly but more significantly the market for many new (and recently new) construction condos is aggressively pursuing deals.  It’s unfortunate because this area still shows enormous promise but the pricing is noticeably depreciated. In March 2020 the median closing price of a 2BR condo was $6.305M, hot on the heels of contracts signed during the healthy rebound we saw in Jan/Feb of 2020.  But by December ‘20 it was $3.064M and last month June ‘21 down to $2.527. Still the activity levels are strong so buyers are wise to take advantage. The northern part of Clinton closer to Columbus Circle seems to be faring better than the southern part adjacent to Hudson Yards. 

In the 16 years I’ve sold real estate, the UES has never been considered a ‘hot’ market. Well sometime this spring that all changed, and the UES is being treated to activity levels across the board that are remarkable. This may be due to a variety of factors, not the least of which is that without foreigners dominating the condo market, domestic buyers are looking to exploit the high quality of living the area offers. From January 2019 though December 2020, no more than 2 or 3 4BR condos traded. Yet in 2021 every month has seen a minimum of 7 4BRs sold, with June 2021 boasting a whopping 16. The coop market is surging even greater, where the average price of a 4BR coop in October 2020 was a paltry $1.35M yet has increased incrementally over the last several months to a whopping $6.355M in June 2021. This is frankly a great time not just to sell but also to buy in the UES because this wave will likely continue through 2022 and prove the UES is indeed full of appreciating assets.

What can we say about the UWS? Excessively negative press during Covid lockdown about safety and some mean-spirited criticism of the city’s decision to utilize some hotels for homeless shelters could not keep this nabe down. While the number of sales declined (like everywhere else) during Covid, we’ve seen the area bounce right back without hesitation and by late last year we found buyers already caught up in bidding wars. In June 2019 the number of 4BR coop sales here was 8, by June 2020 it had gone down to 5, and last month it was 12. Pricing has not gone up yet but bidding wars have proven that absorption is quite efficient as demand is stronger here than anywhere else in Manhattan. 

Not unlike the UWS the West Village traditionally holds its value.  What we saw in 2020 was that sellers in the West Village could afford to hold out for a better market rather than sell at a discount or a loss so the amount of trades simply declined. In 2020 the average number of 2BR condos trading was 1.5 per month.  Yet since March 2021 that number has reached a minimum of 6 2BR condos trading per month.  Perhaps an even better metric is the average price--in Jan 2020 pre-Covid it was $4.03M for a 2BR condo. Yet in Dec 2020 it was $4.178M. It turns out the West Village boasted immunity to Covid.

Midtown East typically yields attention to Midtown West but that’s not what we are seeing presently.  While pricing has been fairly stable, with the median price of 2-4BR condos staying curiously the same from essentially mid-2019 to the present, the number of transactions declined during 2020 but have surged this year. There were only 4 2BR condos sold in Dec of ‘20 but by June of ‘21 that number shot up to 24.

Soho selling values were quite strong throughout 2019, then Covid saw sellers holding onto property (similar to the West Village) rather than sell at discount, with much fewer closed sales last year compared to 2019.  But 2021 has been extremely active, with the average price of a 3BR condo in June at $7.377M, and the amount of 3BR sales in May ‘21 (12) exceeding any month overe the prior 24 by a longshot.