Luxury Manhattan Residential Real Estate Market Has “Garbage” Year in 2020

By: Benyamin Davidsons

The year 2020 will be remembered as “garbage” by the luxury Manhattan residential real estate market. As reported by the Real Deal, Donna Olshan who tracks Manhattan properties prices in her weekly reports since 2005,says the proof is in the pudding. Her report, which delves into residential properties above $4 million, shows that 2020 was bad even for a pandemic year, based on the number of transactions and the total value of sales.

“I just consider 2020 a year you can throw out,”Olshan said. “It’s a garbage year.” Her latest Olshan Report, which looks at the whole year, reveals that there was a 31 percent decline in signed contracts for luxury homes in 2020 compared to 2019. The market’s peak was in 2013, when 1,372 contracts were signed for luxury townhouses, condos and co-ops. In 2019, there were 935 contracts inked. By contrast, in2020, only 645 such transactions were signed. The data shows that “this will go down as one of these years with a big asterisk after it,” Olshan said.

The co-op market was especially disappointing, with only 133 contracts signed in 2020, in comparison to 222 signed in 2019. Condos fared better with a total of 418 deals, as opposed to 595 last year. The average asking price was $2,733 per square foot for the condos that did go to contract, down from $2,802 last year.

Real estate brokers had predicted that the pandemic would lead to an increase in townhouses in the luxury market. It would make sense that home buyers would choose to forgo elevator rides in favor of spacious homes with more personal and outdoor space. Even that forecast didn’t play out so well. A total of 92 townhouses priced over$4 million went into contract in 2020, compared to 114 deals in 2019. “What bears out is that cheaper townhouses sold,” Olshan said.

As per the Real Deal, 2020’s inked deals also included discounts. There was a 12 percent average discount off of the first asking price across the board for luxury homes in Manhattan, up from 10 percent in 2019. Olshan added that the complete scale of discounts won’t be clear till the properties close.

The only figure which really increased year over year was the size of the homes that went into contract. Personal space was in demand during the pandemic which forced everyone to stay home more, with offices and schools going remote. The average size of the condos that went into contract was 2,953 square feet, up from 2,874 square feet in 2019.