The number of homebuyers purchasing apartments in Manhattan has dropped by 46 per cent in the third quarter amid pandemic lockdowns and soaring crime, with many instead flocking to the New York suburbs and to Florida.
According to data from Compass, some 10,000 homes are currently up for sale in Manhattan, a new record.
Even before the pandemic, there was a glut of high-end apartments needing to be sold in the city. But the inventory of unsold apartments now continues to rise as new listings hit the market, CNBC reports.
Current luxury apartments on the market would take nearly three years to sell, according to a report from Miller Samuel and Douglas Elliman.
Some 10,000 homes are currently up for sale in Manhattan, a new record. Urban flight and high costs have convinced many to move to the suburbs and out of state
Graph shows the number of sales in each borough, with Manhattan having the highest (from Streeteasy)
‘There is no shortage of apartments for sale, but there is a shortage of buyers,’ said Jonathan Miller, CEO of Miller Samuel.
There were only 1,375 total sales in the third quarter of the year. The number of sales is 44 per cent down from just a year prior. Signed contracts for September also fell 42 per cent in Manhattan from last year, according to Miller Samuel.
Manhattan has been hit with high unemployment and growing problems with sanitation and public transit and has only had 10 per cent of workers return to their office buildings. The city has also been hit by a massive surge in crime.
As a result, buyers are hesitant to purchase homes.
As the city looks to possibly raise taxes in a bid to save budget holes impacting NYC and the state, more buyers are looking to spend their real estate dollars elsewhere.
Contracts signed in the Hamptons have gone up 76 per cent in September, compared to last year. In Westchester County, New York, purchases have increased by 56 per cent while they have risen some 36 per cent in Fairfield County, Connecticut.
In the third quarter, only 1,375 total sales transpired. The number of sales is 44 per cent down from just a year prior
Florida has also seen an increase surge in buying, with signed contracts going up 62 per cent in Palm Beach County and 21 per cent in Miami-Dade County.
In addition to urban flight, Manhattan brokers have mislead the public by touting a ‘buyer’s market’ in Manhattan for months. They’ve claimed that prices were going to drop and continue to do so, in a bid to entice those who have been looking to buy for a while.
The average sale price in Manhattan rose 32 per cent in the third quarter to $2.18million. The median sale price also increased by seven per cent to $1.1million.
Statistical flukes are responsible for the increase, according to analyst. 2019’s city mansion tax depressed third quarter sales at the time. Hyper-priced deal closings at the new luxury condo tower at 220 Central Park South also contributed to the prices.
Manhattan has been hit with high unemployment, growing sanitation and public transit problems, increases in crime and has only had 10 per cent of office workers return to their office building. As a result, buyers are hesitant to purchase homes
Analyst say a more accurate reflection of price drop comes from the average discount between the asking price and sale price. Apartments in the third quarter sold an average discount of nine per cent, compared to five per cent before the pandemic.
Average price-per-square foot in Manhattan did rise in the third quarter. This suggest that prices may drop further before buyers should rush in.
‘If you look at 2009 and then Sept. 11, the sellers can take a few years to adjust,’ Miller said.
Miller added that he doesn’t expect prices to fall more than about 10 per cent. Prior to the pandemic, prices had already gone down 15 per cent from the peak of 2015-2016. Buyers will hopefully be incentivized to purchase by the time the price is down from 25 per cent from that point.
‘But that all depends on quality-of-life issues like policing, sanitation and public transportation,’ he said. ‘I don’t see an improvement in the market in the fourth quarter. But I think we could see notable improvement in 2021.’
Murders in New York City increased by 76% in September compared to last year and shootings skyrocketed by 127%, new crime statistics reveal
The citywide crime stats released on Friday show that New York’s summer crime wave continued into September, as the city continues to grapple with a disturbing rise in violence.
Tensions in the city remain high after months of coronavirus lockdowns, economic misery and unrest in the streets, causing petty disputes to frequently escalate quickly into violence. As well, police say that gang violence has been a major factor in the rise in shootings.
There were 152 shooting incidents across the city in September, compared to just 67 such incidents in the same month last year, a 127 percent rise, the data shows. Over the first nine months of 2020, shootings were up 91 percent.
Murders in New York City rose 79 percent last month compared to the same month last year
There were 152 shooting incidents across the city in September, compared to just 67 such incidents in the same month last year
Also last month, there were 51 murders in New York, compared to 29 in September of last year, an increase of 79 percent.
Through September 30, there were 344 murders in the city, compared to 246 murders in the first nine months of 2019, an increase of 40 percent.
Burglaries also rose an alarming 38 percent in September, and were up 42 percent for the year through September 30.
Overall, index crimes rose just 2 percent in September, with the rise in shootings and murders counter-balanced in part by declines in hate crimes (down 33 percent so far this year) and reported rapes (down 19 percent in September).
Police say that sex crimes continue to go under-reported, and urge victims to come forward by contacting the NYPD Special Victims Division.
NYPD officers stand guard during a protest to demand justice for Daniel Prude, on September 3, 2020 in New York City. Violent crime in the city is up sharply from last year
In a press release, the NYPD touted its strong enforcement efforts, saying that gun arrests rose 98 percent in September from the same month last year.
‘NYPD officers have achieved this record level of enforcement despite the approximately 2,500 officer reduction in manpower—from attrition and no new academy classes—as well as a 59 percent cut to the uniformed overtime budget,’ the department said.
Previously, Police Commissioner Dermot Shea has directly blamed Mayor Bill de Blasio’s $1 billion cut to the NYPD budget for the city’s recent surge in crime.
The $1 billion budget cut resulted in policing funds being reallocated to education and social services over the next year.