Manhattan’s Luxury Real Estate Market Is Rebounding
New York City real estate has suffered a severe blow in the course of the pandemic. Landlords not only struggled to fill vacant apartments, but owners also found it difficult to find buyers last year. In fact, the vast majority of Manhattan homes sold in the first quarter of 2021 closed at or below their respective list prices, the highest number of sub-asking price offers since 2009.
While Manhattan’s real estate market is generally sluggish, one corner is showing signs of life – luxury real estate.
The demand for luxury real estate has increased
The perk of buying real estate in Manhattan right now is taking advantage of cheap prices. But even non-bargain hunters are showing increasing interest in houses in New York City.
A recent report by Olshan Realty shows that the number of real estate contracts for luxury real estate in Manhattan increased 60% in the first quarter of 2021 compared to the same period in 2020. In fact, 41 residential property contracts were signed, priced at $ 4 million or more for the week of March 15, bringing the total to 343 year-to-date numbers. In the same period last year, only 215 similar-priced contracts were signed before Manhattan closed largely to deal with the coronavirus outbreak.
Why the sudden surge in luxury property demand? Advances in the introduction of the coronavirus vaccine could generate more interest. As soon as the pandemic improves, the nightlife in Manhattan could open up and those who enjoy it may want to be close to the action. And buyers with the budget for high-end homes are clearly trying to get in now, while prices, while obviously high, are still competitive on a comparative basis.
Is now a good time to invest in Manhattan’s luxury market?
From a resale perspective, there may be an opportunity to value luxury homes at a relative discount now as Manhattan’s property market has not yet recovered and nightlife is still largely closed.
However, buying luxury real estate is a mixed bag. On the one hand, these homes can be a hot commodity due to their limited quantity, and there is the potential for serious profits in a healthy market. However, since it is difficult to predict when Manhattan as a whole will recover from the effects of the pandemic, investors buying luxury homes today can hold them in their respective portfolios for some time, thereby hampering their cash flow.
Of course, the fact that buyers are showing interest in luxury Manhattan real estate could be a sign that they have high hopes for the city. And that sentiment could have an impact on the general real estate market. Manhattan homeowners struggling to find buyers may change their fortunes in the near future, while landlords may find it easier to fill vacancies. New York City has a long history of recovering from crisis, and at this point there are signs that it is well positioned to overcome the effects of the pandemic soon enough.