Manhattan’s real estate market emerged from the third quarter of 2021 with a ferocity, posting its busiest third quarter in at least three decades, according to market reports from Douglas Elliman, Brown Harris Stevens and Warburg Realty (soon to be Coldwell Banker Warburg).
Luxury apartment sales surged about 226 percent year over year and almost 33 percent from the previous quarter, according to Douglas Elliman. The brokerage netted a total of 453 luxury sales (which the company defines as the top 10 percent of the market), and those luxury sales saw the highest market share of bidding wars in at least five years, according to the report.
Sales showed strong gains across the board, though, with number of sales across all price ranges increasing nearly 229 percent year over year and 32.4 percent from the previous quarter to a total of 4,523 sales.
“Sales reached their highest total in more than thirty-two years of tracking, driven by rising vaccine adoption, low mortgage rates, and improving economic conditions,” Douglas Elliman’s report states. “Since the spring of 2020, the market has largely inverted in performance,” the report added. “The higher end of the market saw more sales gains than the lower end, reflecting the greater pandemic economic damage experienced by lower-wage earners.”
Manhattan apartment closings for Brown Harris Stevens reached heights not seen in eight years, and prices saw sharp growth after bottoming out at the beginning of 2021, the brokerage’s report stated. Resale co-op prices were up 17 percent year over year while resale condo prices were up 15 percent year over year.
Average days on market for those units were also down 25 percent from the previous year, dropping from an average of 157 days during Q3 2020, to an average of 117 days in Q3 2021. Meanwhile, sellers received 97.4 percent of their last asking price, which is the highest percentage in nearly four years, according to Brown Harris Stevens.
“The Manhattan real estate market has made an unbelievable comeback in the past year, which may surprise the naysayers out there,” Brown Harris Stevens CEO Bess Freedman stated in the report. “But those of us who live and work here never had any doubts.”
Amid strong demand throughout the summer, inventory has dwindled, and saw unexpectedly low recovery post-Labor Day, Warburg Realty CEO Frederick Warburg Peters noted. That low inventory has kept the city firmly positioned in a seller’s market.
The third-quarter market “came in like a lion and continued roaring throughout much of the summer,” Peters said. According to Peters, the lion did “take a nap” during the end of August and “remained drowsy” for the majority of September. “But now that lion is waking up again,” Peters added. “He’s still hungry — and game is scarce!”
The brokerage’s report also noted that high-end condo sales (priced above $4 million) flourished during the third quarter, while high-end co-ops sales simultaneously languished. Peters speculated that co-op boards’ regulations, including prevalent practices of only allowing 50 percent financing and having strict regulations regarding renovations, played a big role in those dwindling numbers.
“During these weeks in which 30 or more high-end condos have sold, the number of co-ops going into contract above $4 million has hovered around three or four, just 10 percent of the absorbed condominium inventory,” Peters said. “In my opinion, a series of poor decisions made by the Boards of Directors of these co-op buildings over recent years has led to their substantial devaluation, even though they continue to occupy a place of pride in many of Manhattan’s most prime locations.”
Peters suggested that moving into the fourth quarter, the market is unlikely to change drastically, with supply continuing to hamper demand.
Update: An earlier version of this story incorrectly stated that Warburg Realty had already changed names to “Coldwell Banker Warburg,” however, at the time of publishing, the company’s name remained Warburg Realty and will do so until final DOS licensing is processed.