Posted by Wei Min Tan on April 13, 2022
An 8-minute overview of the Manhattan real estate market update for April 2022 by top manhattan realtorWei Min Tan.
Historic Condo Price Trend in Manhattan
Looking at house price data going back to 1999condominium prices in Manhattan rose from 1999 to 2008, fell in 2009, remained flat in 2010, then rose again from 2011 to 2017. Manhattan experienced a decline between 2017 and 2019, and due to COVID 19, 2020 saw the decline extend as the market and the broader US economy came to a standstill.
Prices declined in Q1 2021 to $1,714 per square foot, reflecting 2020 transactions. Recovery began in Q1 2021. In Q1 2022, price per square foot recovered 16.2% from compared to the first quarter of 2021 to reach $1,992. Why? It’s because of pent-up demand, low interest rates and optimism about New York reopening
We are at the start of the next bull cycle and we expect prices to continue rising for about the next seven years. According to history, ascending cycles usually last about 7 years.
Manhattan Condos Q1’2022
The average price per square foot for a condo in Q1’2022 was $1,992. It increased by 16.2% compared to last year and by 0.2% compared to the last quarter. The number of sales rose to 1,647, up 51.7 and 0.3 percent from last year and last quarter respectively. Months of supply were 6.2 months, 35.4% less than last year.
This shows that the market is very robust.
Weimin’s article, Co-op versus Condo in Manhattan
Manhattan New Developments Q1’2022
Newer Manhattan developments are more expensive on a price per square foot basis. The average price per square foot for a new development in Q1 2022 was $2,295, up 6.6% from a year ago. The number of sales was 543, 89.9% more than a year ago.
The market is booming and it’s coming back. History has shown us that after a pandemic, the market generally does very well. The residential real estate market is doing well, but commercial real estate is not. This is partly because many retailers have closed as people shop online at Amazon.
The bottom of the covid period was July 2020 and that was when it was most favorable to buyers. It has resumed since 2021 and right now we are in a seller’s market.
Focus on larger apartments as people want more space after Covid
Our recommendation is to focus on larger apartments. That means if you can get a 2 bedroom instead of a 1 bedroom, get a 2 bedroom. If you can get a 3 bedroom, get a 3 bedroom because people want more space. The $2 million and above price segment, referring to sizes of 2 bedrooms and above, performs better than properties under $2 million, which are studios and 1 bedrooms.
Quarterly active offer vs. pending sales
The gap was greatest during the third quarter of 2020, which is when the market was at its weakest. Right now the spread is very tight and that’s another indication that we’re in a strong market.
Weimin’s article, Buying Residential Property in New York – Setting Expectations
Manhattan’s supply is now tight. We are below the historical average and had a high going back around May to July 2020. This is when the market was at its weakest. Since 2021, the market has recovered tremendously.
Manhattan Pending Sales
Pending sales refer to contracts waiting to be closed. Currently, pending sales are above the historical average. One of the current market challenges is low supply. We have a lot of buyers but not enough properties. Buyers are trying to lock in still historically low interest rates and buyers want to be able to see more properties.
What we do
We focus on of global investors buy condos in Manhattan for portfolio diversification and long-term return on investment.
1) Identify the right purchase according to the objectives
2) Manage the buying process
3) Rent the property
4) Manage tenants
5) Market the property during the eventual sale
Wei Min’s media interviews by CNBC, CNN, New York Times about investing in Manhattan real estate