The Real Estate Collapse of 2020

Buyers are rethinking the cost of living in Core Manhattan, where the median retail price was $ 1.1 million in the third quarter, according to real estate agent Douglas Elliman, even after three years of mostly falling prices. (The median in Brooklyn was $ 790,000.)

Shortly after the market reopened in June, the majority of purchases came from first-time and emerging buyers, said John Walkup, founder of UrbanDigs, a real estate data company.

“That first wave of buyers was the one who had to move,” he said, and most deals were under $ 2 million. Since September, Manhattan sales have grown by between $ 2 million and $ 4 million, surpassing the volume of contracts signed in the same months of last year.

Still, buyers want their pounds of meat. From March to September, homes in Midtown Manhattan, the center of the real estate universe before offices and businesses closed, were sold at the biggest discount of any neighborhood. The median difference between the asking price and the final price was 12.4 percent, or about $ 250,000, according to StreetEasy.

At that time, there were only five boroughs that sold more than half of the above homes, and none of them were in Manhattan: Downtown Brooklyn, Flatbush, Gowanus, and Greenwood in Brooklyn, and South Jamaica in Queens.

“People feel safer in Brooklyn,” said Michael J. Franco, an agent at Compass. “Some of my clients see this as an alternative to moving to the suburbs” because their dollars continue to expand and it is convenient to travel to Manhattan when necessary.

While discounting was widespread this year, prices didn’t plummet as some bargain hunters had hoped – largely because prices started falling long before Covid. In 2018, new caps on state, local, and real estate tax deductions disproportionately affected high-priced markets like New York, and tax changes in 2019, including increased transfer taxes on residential property over $ 1 million, further slowed sales.