Manhattan Real Estate Prices Dropping: Should You Get in Now?

The coronavirus pandemic has hit Manhattan’s residential property market. And while home sales have picked up, retail prices have come down. In fact, real estate investors looking to add Manhattan real estate to their portfolio may have the opportunity to get some big discounts – while realizing that the city may have quite a long recovery ahead of them.

Manhattan apartments sell for less

At the national level, the housing stock is at a record low. But there are lots of apartments on offer in Manhattan. However, most buyers do not pay the seller’s asking price. Instead, they insist on getting a bargain.

Of the 2,457 Manhattan homes sold in the first quarter of 2021, 97% closed at or below the asking price. According to a report by appraiser Miller Samuel and real estate broker Douglas Elliman, this is the highest percentage of sub-asking price deals since 2009.

In the first quarter of 2021, the average price of condominiums sold was $ 1.55 million, down 4.7% year over year. The median co-op price was $ 780,000, down 3.8%.

In certain parts of the city the discounts were even more pronounced. In Midtown East, condos on listing were discounted an average of 14%, and the average price of completed sales in that neighborhood fell 12% to $ 1.3 million, according to brokerage firm Serhant. In Midtown West, the average price of completed deals fell 19% to $ 1.04 million.

One big reason for selling Midtown Manhattan real estate at such a bargain price is that the area is cluttered with office buildings that have been mostly vacant over the past year as companies switched their employees to remote working. As such, this part of Manhattan generally has limited residential appeal. And at a time when proximity to offices is hardly a selling point, it’s not shocking that buyers are given a solid opportunity to underpay.

Is Now a Good Time to Invest in Manhattan?

Now, from a bargain perspective, real estate investors should be looking for deals in Manhattan. However, investors should also proceed with caution. It could be many months before Manhattan’s nightlife reopens and the trend towards remote working subsides. As a result, the city’s lure may be subdued for some time, and those who buy apartments in hopes of securing rental income may find themselves sitting in vacant spaces for a few months, especially given the number of unoccupied apartments that already exist.

However, those who can afford to keep vacant apartments for short periods of time have the option to purchase cheap Manhattan real estate and take advantage of the boom that can come if the coronavirus front really does improve and the tenants return to the city again the city.

So now is actually a good time to buy in Manhattan for investors who understand what they’re getting into – and are ready to wait some tough months to see big profits at the other end of the pandemic.