Douglas Elliman recently released the Elliman July New Contract Signed Report for all of its luxury real estate markets in the U.S. (Download the PDF of the report here.) This report is produced monthly, and we’ll be taking a look at some of the data from the Manhattan report from July of 2020.
This report has been drawing a lot of attention from the media, who are unfortunately trying to paint the picture of a mass exodus from New York City amidst the coronavirus pandemic that has rocked our beloved city. It is true that many of our friends, neighbors and clients have moved out to more rural and suburban second home properties for the time being—including us spending a lot more time at our home in Nissequogue. However, this is just a temporary situation until things get a little more back to normal in the city.
July Market Indicators
Everyone has been quite interested to see the real estate numbers from July as it was essentially our first full month back in business after more than three months of being totally shut down. We found ourselves extremely busy during the lockdown, as there were still some transactions in process and our buyers, sellers, developers, landlords and renters all had a lot of questions during these uncertain times. We kept up with our team and our contacts through Zoom meetings and we used the technology to our full advantage to keep things moving even when the market was basically on stand still.
“For the first time in history, real estate in New York was shut down,” says Tom. “We could not show properties from March 15 through June 21. On June 22, we got hundreds of broker emails saying ‘it’s time to get back to work!’ Mickey and I shook our heads because we’ve never worked harder in our lives throughout those past three months!”
What We Learned
The July Elliman New Contract Signed Report showed us a lot of interesting trends. Some of the news was good as we saw a quick spike in real estate activity after the three-month hiatus. Some of the news was not as good as many of the key indicators were down when comparing the year-over-year data between July 2020 and July 2019.
It’s no surprise that the really high-end New York real estate markets are still suffering. Where we really wanted to look was at he condo and coop markets, where the most activity typically happens in Manhattan.
A Closer Look at the Data
Keep in mind this data is comparing July 2020 versus July 2019. The first thing to note is that the number of active listings for both condos and coops increased by 30.3% this July (compared to last July). This makes sense after the market shutdown and a lot of pent-up supply and demand.
We’re basically condensing our normal spring and summer markets (the most active time of year) into one shorter summer market.
Here are some other numbers that stood out to us from the report:
FOR COOPS
• Average sales price decreased to $1,177,226 from $1,227,089
• Median sales price decreased to $809,500 from $865,000
• Discount from original asking price increased to 11.2% from 10.9%
• Discount from last asking price increased to 4.7% from 3.6%
• Initial Index offer decreased to 5.89% from 6.04%
• Transactions over $1,000,000 decreased to 35% from 40%
• Transactions under $1,000,000 increased to 65% from 60%
• Median number of days on market to C/S, from last ask price increased to 136 from 70 days
• 69% of coop sales are financed of which 81% are contingent on financing
• 4% of buyers are international
• 19% of coops sold at ask & above the asking price.
FOR CONDOS
• Average sales price increased to $2,712,890 from $2,259,122
• Median sales price increased to $1,715,000 from $1,645,000
• Discount from original asking price increased to 16.4% from 9.7%
• Discount from last asking price increased to 13.1% from 4.8%
• Initial Index offer increased to 10.89% from 7.69%
• Transactions over $1,000,000 decreased to 71% from 74%
• Transactions under $1,000,000 increased to 29% from 26%
• Median number of days on market to C/S, from last ask price increased to 123 from 78 days
• 53% of condo sales are financed of which 83% are contingent on financing
• 11.5% of condo sales are new developments
• 20% of buyers are international
• 12% of condos sold at ask & above the asking price.
Webcast Discussion
We recently hosted a webcast, where we talked with Howard M. Lorber, Executive Chairman of Douglas Elliman, and Jonathan Miller, President & CEO of Miller Samuel. Jonathan’s firm is the one that produces these reports for Elliman.
Check out the full recording of the webcast:
In this webcast, we reviewed some of the findings in the Elliman New Contract Signed Report along with other trends in the New York City real estate market, pre-COVID through what we are seeing now with the market reopened.
“We’re seeing two different scenarios in Manhattan and the region around it,” says Jonathan. “Contract activity in Manhattan is rising since April, but still down 57% year over year. Inventory is also up. New York is improving, but at a slower pace than some other markets.”
In the conversation, they talk about how markets outside of Manhattan are seeing a lot more activity. This is especially true out on Long Island. The higher-end markets there haven’t done quite as well, but the middle- and lower-end properties have been selling fast and at good prices. Howard also talks about some of Elliman’s other luxury markets nationwide and how they are doing right now.
“New York City is the toughest market,” he says. “Long Island has not recovered on the high-end, but the middle-end is doing well. Florida is doing stellar, up 30-40% with Palm Beach being the number one market in the country. California is up about 15% and Colorado is way up. People are flocking to Aspen for the healthy outdoor lifestyle. Suburbs are up everywhere. The Hamptons have seen a record year so far in volume and transactions, but not prices. The rental market is also thriving.”
What Does it All Mean?
The point of looking at reports like this is to get real numbers that help us gauge market activity. The fact is that the New York real estate market was already soft long before Covid. That’s no secret, but we know it always bounces back because the Manhattan lifestyle will always be in demand. Until schools, shows and restaurants are back open, a lot of Manhattanites are likely to live elsewhere if they have the means to do so. These are people who own second homes and are very mobile.
“Life will go on,” Tom says. “We’re optimistic. It’s just a tough moment and the uncertainty doesn’t bode well for anything.”
“The pent-up real estate demand will never fizzle away,” adds Mickey. “It will stay pent-up until a vaccine is announced or when theaters and restaurants open again. We’re still going to transact business. We’re still showing apartments. We’re still bringing new listings to the market. People need a place to life. People need to sell and move on. Business will continue.”
Tom Postilio & Mickey Conlon are leading real estate brokers with Douglas Elliman. They specialize in Manhattan luxury homes, apartments, condos and coops. If you are ready to buy or sell, or if you have any questions about the local real estate market, contact Tom & Mickey today!