Downtown Manhattan as seen from the Empire State Building - Photo by Tony Sargent (C) 2014
The Manhattan real estate market is picking up again in the luxury sector. While there was a slight lull in the summer between mid-June and July by August properties that had been on the market for a month or two started going to contract. While I was in in San Francisco in July at Inman Connect’s real estate conference speaking on a luxury panel, I heard that the mid-luxury levels in San Francisco and Los Angeles had also been slow for a month or more. Was the market turning?
Traditionally the Fall market in New York is our secondary market – Buyers who did not have a chance to secure a property in the robust spring market re-enter market again in the Fall after a summer off.
I believe the Fall market started early this year – in August. The intense seller’s market for the first six months of the year lead to a slower June and July because of buyer fatigue. Added to that, listing inventory while having climbed somewhat in the 2nd quarter of 2014 over the 1st quarter was still well below the 5-year averages making it more challenging for buyers to find the properties they hoped for – rather than continuing a seemingly futile effort they stopped. (Read Streeteasy’s July Condo Report here)
As a result, in my view the level of pent-up demand is still extremely high. The buyers who are willing to step up and make a quick decision and not sweat the small stuff with regards to negotiations will buy properties this fall. Those buyers who are choosy and question every aspect of the deal or contract will be a disadvantage in negotiations.
For the buyers who’ve decided to stay put in their current homes until ‘the right one’ shows up some will (like many before them) choose instead to stay put and to invest in a country or Hamptons home to provide the escape from Manhattan.
What I’m seeing in the first two weeks of September is that the mid to high-end luxury market is very strong and contracts are getting signed on new properties and those which had seen showings but no contracts. Listings that I have been following as well as new developments also reported signed contracts in the first 19 days of September. For me August was very busy with properties that went to contract including 30 Bond, Penthouse and 200 Eleventh Avenue after multiple bids.
In the luxury development market new properties have started to be announced for the fall market. The face of New York’s residential real estate is changing, as is the design and height limits. With super tall sky-scrapers coming to the city, it will be interesting to see what the future holds for the world’s global elite in terms of luxury offerings in the future. It’s an exciting period in residential design.
