NYC Real Estate

Manhattan Real Estate Deals Fall By Nearly 60% As Suburban Market Thrives

Potential contracts for Manhattan apartments have fallen by more than half this past July while deals in more suburban environments have doubled, proving that many individuals are trying to escape the reality of a close knit metropolitan area in the middle of a global health crisis. 

Technically speaking, the number of signed contracts for apartments and condos in Manhattan has dropped by 57% in July when compared to the numbers one year ago. According to reports from Miller Samuel and Douglas Elliman, the higher end of the market is what’s being hit especially hard, as co-op properties that are priced between $4-$10 million are down over 75% when compared to 2019’s sale numbers. 

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While the number of actual signed listings is decreasing, the number of new apartment listings is continuing to increase. New listings in Manhattan jumped 8% when compared to last year, and the number of unsold apartments is at its highest level in nearly a decade. According to Samuel and Elliman, the market is currently in a position to have more than a 17-month supply of apartments to sell; the typical Manhattan average is an eight month supply.

Obviously the pandemic and lockdown procedures that come with it are impacting the industry. Metropolitan’s all over the world are being hit hard, but Manhattan is especially struggling, especially considering New York City was the initial epicenter for Covid-19 when it first began affecting individuals in America. 

The lockdown is preventing all apartment showings to be done in person, making it difficult to get deals signed. Additionally, many native New Yorkers are fleeing the city for more suburban options to ride out the rest of the pandemic. The numbers in July are a reflection of individuals who either know someone, or have additional properties in more suburban settings; like on Long Island or Westchester even. CEO of Miller Samuel, Jonathan Miller, spoke with the media about these trends and why the city is the last place people want to be right now. 

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“The city is less of an anchor now, it’s going to take longer for the city to recover than the suburbs. Anything within a two-hour radius of the city is as busy as it’s ever been, there’s just a fear of density right now.”

Sales contracts in the Hampton’s nearly doubled with July with 267 signed deals. In Westchester County, deals also doubled when compared to last year with 987 signed deals. However, experienced real estate brokers working in the city aren’t too worried about these numbers. While this is the worst international crisis they may have ever experienced, it’s not the first time the city’s real estate industry has had to recover after mass tragedy. 

Many use September 11th or the Great Recession as an example for the way in which the industry is able to recover along with its citizens. After both, deep discounts on properties in the city is what helped recover New York’s economy, and many are expecting the same results this time around especially among higher end properties.

NYC Real Estate

International Buyers Investing In New York Real Estate Market

Like every industry in the world currently, the New York real estate market has had to make major adjustments to the way it runs during the Covid-19 pandemic. The biggest adjustment has been for smaller companies coping with a slowing of sales and an oversupply of luxury listings. However, in an unexpected turn of events Italian real estate buyers are seeking to invest their money in New York real estate. 

Italy has obviously taken a major economic toll throughout this pandemic, as they were one of the countries hit the hardest back in March/April. Now, investors from the country are seeing the potential for better deals in New York when compared to the current real estate climate in Italy. 

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Andrea Pedicini is an Italian native who works for the major New York real estate firm, Corcoran. Pedicini recently spoke with the media about how he’s always worked with investors from his home country even before the pandemic, however, as Italy began easing its lockdown restrictions, he noticed a major influx in inquiries from new and repeat clients from the country. 

In times like this, Italians look at New York as literally a safe haven. I’m currently working with more than 30 new leads, all eager to invest in New York-area real estate in the next six to nine months.”

Pedicini also recounted how he, and many other agents, have begun advertising more heavily on social media as a way of attracting more international investors. Sergio Iorio is one of Pedicini’s long-time clients that Pedicini advertises on his accounts. Iorio owned properties in Brooklyn’s DUMBO neighbourhood, and the Upper West Side, both of which have doubled in value thanks to the market and Pedicini. 

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While timing the market is always difficult, with the current state of the world clients have more wiggle room when it comes to negotiating, and more sellers are growing desperate. Iorio himself, who is the CEO of Italmatch Chemicals  one of the largest chemical companies in Europe, has been encouraging his investor friends to take full advantage of the situation in New York currently. 

“I would like to continue to invest a percentage of my assets into New York because I believe in the long term.”

Most international investors are mainly interested in townhouses and well-managed smaller boutique buildings, as previously stated, these types of listings are saturating New York’s market right now. Having sellers and agents essentially lose three months of the traditionally very busy spring real estate season has been damaging, but international investments during the summer could help the industry slowly regain momentum as the rest of the economy also recovers. 

However, while there’s been an extreme increase in international buyer interest in New York real estate, most are still waiting to pull the trigger until a new sense of normalcy is brought on by the slowing of this pandemic. Many agents do believe that this interest will help fuel the economy as the months progress, especially considering this is not the first time the industry has endured a lull in sales due to international/national tragedies.