- Investors and trade-up purchasers are seeking opportunities in the traditionally resilient market
- City apartments with outdoor space and single-family homes in lower density outer borough neighbourhoods are particularly sought after
New York City is one of the most expensive and attractive residential locations in the world. This pulsating metropolis on the Hudson River is the most densely populated city in the US with 8.5 million people. The outbreak of coronavirus brought the real estate market in the “Big Apple” to a temporary standstill. The current mood of economic uncertainty is naturally prompting some restraint among buyers and investors. “Activity is still down, but the buyers and sellers who are in the market are serious and trying to move quickly. We anticipate continued pressure on prices in all market segments while uncertainty around the virus continues. The one possible exception is luxury properties offering the most in-demand features and locations, which may receive multiple bids” says Stuart Siegel, Managing Director of Engel & Völkers in New York City. Volatility in the stock market is driving some investors to increase their real estate portfolios, including the bulk purchase of new development units. Meanwhile, private buyers are recognizing more than ever just how important a home is as a place of refuge and sanctuary. So the demand for real estate in prime locations in and around NYC as a lifestyle and financial investment, is only set to increase.
Price developments during the coronavirus crisis*
During the period from March to August 2020, with no property showings allowed, prices in the New York City real estate market dipped. Compared to other cities internationally, however, prices remain very high indeed. Sales prices for luxury townhouses on the Upper East Side reached up to 22.4 million (approx. 19 million euros), followed by 13.45 million in Soho (approx. 11.38 million euros) and 8.4 million in East Village (approx. 7.11 million euros). Apartments at premium addresses on Central Park South sold for 16.4 million on average (approx. 13.88 million euros). The average price per square foot for apartments in this prime area is 5,600 (approx. 4,740 euros). In Tribeca, homes changed hands for an average of 5.1 million (approx. 4.5 million euros), with average prices per square foot at 2,100 (approx. 1,780 euros). Apartments within the Hudson Yards development sold for an average of 6.0 million (approx. 5.1 million euros), with apartments selling at an average of 3,100 (approx. 2,620 euros) per square foot.
On the increase: Client demand for comfort, security and privacy
“Due to ongoing social distancing requirements, work and daily life has been relocated to the home for many people. With their usual freedom of movement restricted, New Yorkers need their homes to provide a range of things that they did not need before. Features such as designated spaces for work or home schooling, abundant natural light, and private outdoor terraces or gardens have become more desirable,” says Siegel. In Manhattan there is also more
demand for apartments in high-service buildings with a doorman or concierge. Clients value the flexibility and convenience such a service brings. In surrounding boroughs, buyer interest in single-family homes with private gardens has increased considerably. Up-and-coming locations here include Clinton Hill, Crown Heights and Gowanus, which are all located in the borough of Brooklyn. Townhouses sell here for in the region of 1 to 4.2 million US dollars (approx. 840,000 to 3.53 million euros).
Outlook: Catch-up effects now emerging since re-opening of city
The strict contact and travel restrictions imposed have led real estate service providers to adopt new approaches to property brokerage. During the lockdown, Engel & Völkers real estate agents made it possible for clients to attend viewing appointments via live video link, and in the form of virtual 360-degree tours. Thanks to its digital state-of-the-art-technology, the company was also in a position to close a number of real estate transactions during the lockdown, including a 55.2 million US dollar deal (approx. 46,73 million euros) at 220 Central Park South that was secured prior to COVID-19. “The continued interest shown by our clients in buying and renting properties, coupled with our experience following similar extraordinary market challenges, such as 9/11 or Hurricane Sandy, gives us full confidence that the New York real estate market will recover, perhaps faster than we can imagine right now” Siegel concluded.