One year ago, Manhattan’s real estate market was just emerging from the pandemic shutdown and questions loomed large about how the market would recover. This fall provides an answer: The hustle and bustle of the Manhattan sales market is back with the return of new developments and buyers who spent the past year window shopping.
Take 500 West Street 22nd Street, a 10-unit condo in the Chelsea neighborhood dubbed Park House. A pre-launch kicked off this summer, with one-bedrooms starting around $2.5 million, three-bedrooms at $5.565 million and a full-floor, four-bed-room spread asking $9.65 million. The model units debut this September.
There’s been “outstanding demand,” according to Compass agent Leonard Steinberg. “Our most expensive unit — the east penthouse — is in contract already,” he says. The asking price: $12.75 million.
“We expect a very busy fall,” Steinberg added.
Nancy Wu, an economist for StreetEasy, notes that the Manhattan buyer’s market is picking up from a slowdown that preceded the pandemic. “After three years, we’re seeing that prices are actually beginning to rise, month-over-month, in Manhattan,” she says. “A lot of condos have been lingering on the market since 2014 … they’ve had significant discounts in order to come off the market these past few months.”
StreetEasy’s market report for the second quarter of 2021 showed that Manhattan’s median asking price rose from $1.3 million in the first quarter of 2021 to $1.345 million in the second. Supply, however, still outpaces demand: During the second quarter, Manhattan inventory was the highest it’s been since 2010.
Wu adds that an increase in both supply of Manhattan’s for-sale inventory and demand (meaning homes actually entering contract) provides stability to the current market.
Otherwise, the rise in pending sales would likely cause more dramatic price increases.
“In the past, the reason there wasn’t demand was because there was way too much inventory and prices were unrealistically high,” Wu says. “It’s been the perfect time for a lot of buyers to come to the market after a year of window shopping.”
Buyers — encouraged by more realistic pricing, low mortgage rates and the reopening of NYC — are making moves in the market.
So what kind of options do they have when it comes to new development?
A number of boutique condos have hit the market, including Park House. 147 Ludlow Street, which holds eight loft-style residences on the Lower East Side, launched late August with prices starting at $1.895 million. At the Leyton, a recently launched 38-unit Upper East Side condo with prices from $3.25 million, buyers have been interested in the smaller building size as well as outdoor space that comes with select apartments.
Michael J. Franco, an agent with Compass, notes that the pandemic slowed down a wave of residential groundbreakings, limiting the new development market. “There’s still a lot of unknowns right now and I think there will be some hesitancy,” he says of buyers.
Still, this fall sales market marks a shift.
“With more people coming back to the city, there will be more traffic, there will be more buyers coming to the market, and I think it’ll work out to be a busy fall season,” he says.
This article appeared in the Labor Day issue of Behind The Hedges magazine. Read the digital edition here.