Manhattan home-shoppers aren't finding huge Covid-19 discounts yet

New York

MANHATTAN home-shoppers are insistent on finding bargains in the middle of the pandemic. Sellers are not offering many.

The median price of previously owned homes that changed hands in the fourth quarter fell just 1.5 per cent from a year earlier to US$925,000, said a report on Tuesday by appraiser Miller Samuel and brokerage Douglas Elliman Real Estate. The lack of deep discounting held back buyers: the number of resales tumbled 23 per cent to 1,617.

Shoppers are seeking opportunity at a time when thousands of New Yorkers have fled, office work remains remote and nightlife is on hold.

While developers of new multimillion-dollar condos boosted sales by cutting deals for well-heeled buyers, owners of existing and lower-priced homes are making fewer concessions. They are holding out hope that Covid-19 vaccines will bring people back to Manhattan and eventually get them their asking price.

"They withstood the pandemic this far, they can take it a little further," said Steven James, chief executive officer of Douglas Elliman's New York office. "They have a sense that we're pulling out of this and if they wait a little bit longer, it's going to be a little bit better."

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In Q4, units that sold for less than US$500,000 spent an average of 153 days on the market, or 41 per cent longer than a year earlier, brokerage Corcoran Group said in its own report. Homes costing US$500,000 to US$1 million lingered for 129 days on average, a 12 per cent increase. For homes in the US$2 million to US$3 million range, the listing time fell 7 per cent.

Fewer resales led to a pileup of inventory. At the end of 2020, there were 9,964 properties on the market, up 36 per cent and the highest year-end total since 2008, said Corcoran.

The steepest price declines were for Manhattan's largest co-op apartments, brokerage Brown Harris Stevens said in its own report. The average for a co-op with three or more bedrooms fell 23 per cent from a year earlier to US$2.45 million. Condos with at least three bedrooms sold for an average of US$4.26 million, down 2.5 per cent.

Brown Harris CEO Bess Freedman said in the report: "With inventory still at high levels, there will be more price adjustments needed to attract buyers." BLOOMBERG