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New York

Manhattan’s condos get year-end sales boost as inventory balloons

Deals over $5M jumped 36% in final quarter

Condo sales over $5 million surged in Manhattan in the final quarter of 2020 (iStock)
Condo sales over $5 million surged in Manhattan in the final quarter of 2020 (iStock)

Manhattan homebuyers are back.

Condo sales in the final quarter of 2020 jumped nearly 39 percent to 1,909, according to Douglas Elliman’s quarterly report on closed condo and co-op sales. The total compared to the third quarter, when there were 1,375 condo sales in Manhattan. High-end home sales also jumped.

While transaction volume is still down nearly 21 percent year-over-year, it has improved since the beginning of the pandemic. In the third quarter, deals were down 46 percent year-over-year. That compared to Q2, when the number of sales dropped more than 54 percent year-over-year, marking the sharpest decline in 30 years.

Appraiser Jonathan Miller, who authors the Elliman’s report, emphasized the significance of the October through December gains, noting the seasonal expectation for sales in the fourth quarter, based on 20 years of data, is an 11 percent drop.

“It’s going against the grain,” he said.

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A surprising bright spot in the report was a surge in high-end condo sales.

The number of condos that sold for $5 million jumped 36 percent year-over-year, to 113. Meanwhile, the number of condos that sold for less than $5 million slid by about 16 percent year-over-year, to 789.

“I have to say I myself am surprised,” said Pam Liebman, CEO and president of the Corcoran Group, which reported similar fourth quarter results. “I think high-end brokers are feeling good right now.”

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She also highlighted the increasing volume of signed contracts throughout the quarter, which could roll into early 2021. Beginning in October, the firm reported a 10 percent year-over-year increase in signed contracts; November saw an 8 percent jump; and in December there was a 3 percent uptick.

“It just goes to show you the resiliency of New York,” Liebman said. “So for those that counted New York out, sorry you lost.”

But just because Manhattan’s deal volume is improving, doesn’t mean all is well.

Price discounts have reached their highest levels in a decade, according to a fourth quarter report from Ryan Serhant’s new brokerage, Serhant. The report is based on market-wide data. Across the borough, the average discount on closed sales from initial asking price was 10.4 percent. For new development condos, the average discount was 8.7 percent.

For higher-priced units, the gap gets wider. The discount for homes listed over $10 million was 23 percent, while for new development condos it was 25 percent.

Then there’s the vast supply of condos and co-ops for sale in Manhattan. That total has also reached the highest level in a decade, with about 9,550 homes listed for sale. That’s 28 percent above the number from a year ago, according to Serhant’s head of research Garrett Derderian. (There are 18,000 unsold units when taking into account shadow inventory — units that aren’t officially listed on the market.)

Derderian said that at the current sales pace, it would take 6.6 years for the units to be sold.

“There’s a lot of inventory out there,” he said.

Correction: An earlier version of this article misrepresented Manhattan listed inventory as inclusive of shadow inventory.

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