Apartment contracts in Manhattan fell by more than half in July, while agreements in many New York suburbs more than doubled, showing a continued flight from the city over the summer.
The number of signed contracts for co-ops and condos in Manhattan – the best real-time activity target – fell 57% in July compared to a year ago, according to a report by Miller Samuel and Douglas Elliman. The high-end of the market is particularly hard hit, with co-ops priced between $ 4 million and $ 1
As offers dry up, the number of apartments listed for sale increases. New apartment ads jumped by 8% in July compared to a year ago. The number of unsold apartments is now at its highest level in almost a decade, according to Jonathan Miller, CEO of Miller Samuel. At the current sales rate, there is more than a 17-month supply of apartments for sale – more than double the typical Manhattan average of around eight months.
Miller said the lockdown in the city – which prevented brokers from showing apartments until late June – combined with hundreds of thousands of wealthy New Yorkers fleeing the city for the suburbs, for a tough July and potentially summer.
"The city is less of an anchor now," he said. "It will take longer for the city to recover than the suburbs."
The suburbs around New York had a banner in July, when New Yorkers bought second homes for escape – and possibly a new primary residence. Sales contracts in the Hamptons more than doubled in July, with 267 agreements. Signed contracts in Westchester County, New York, also more than doubled to 987 agreements.
Connecticut has been a particularly major recipient of New York City's problems. There were more than 1,200 signed contracts in July in Fairfield County, Connecituct, while Greenwich saw a 72% increase.
"Everything within a two-hour radius of the city is as busy as it has ever been," said Scott Durkin, president and chief operating officer of Douglas Elliman. "It's exactly this fear of tightness right now."
Nevertheless, New York realtors say that the city will recover quickly, once there is a vaccine and companies begin to bring workers back to the office. They point to September 11 and the financial crisis as proof that the city is always rebounds. And they say that the deep discounts that many buyers are hoping for will probably not be realized since sellers have so far pulled down on big price cuts.
"We had price cuts before Covid," Durkin said. "With such low interest rates, prices may not be as negotiable as some buyers might hope. But there will be people in different situations, and some may need to sell."
One segment that is likely to have to cut prices is new apartment development. Brokers say that new developments, which have been built with sky-high prices in recent years, will have to adapt to the more competitive market.
Getty Residences – a glamorous new Manhattan apartment building designed by Peter Marino on Wednesday – announced price cuts of more than 50% on some units. A full floor unit, with more than 3,800 square feet, had once been offered for over $ 20 million and is now listed for $ 10.5 million. The penthouse of the building was sold in 2018 for $ 59 million to hedge fund billionaire Robert Smith.