All the pent-up Demand showed up, and it might have just kicked down the door. That’s the sensation we’re getting anyway.
There’s a new energy in Manhattan and it’s palpable, at least inside the actively listed condo and coop units that weren’t used to having visitors before the holidays. In January though, some members of the pent-up demand club turned in their memberships and they’ve entered into the market.
How do we know that? After all, pent-up demand is invisible. Maybe it’s lurking, or maybe it’s not. Maybe it’s not even paying attention yet. Just how pent-up is it anyway? And what if it just goes away, off to the suburbs for instance?
The precise moment that pent-up demand will no longer be trapped behind the walls of uncertainty is always difficult to predict in advance. And this time, under the circumstances formerly known as 2020, it has been even more difficult to predict what the market would do and what would happen in the tug-o-war between supply and demand. There were so many extra variables that contributed to the pent-up nature of demand in the first place, like a global pandemic, and mass demonstrations here and all over the country, along with a presidential election unlike anything the United States has ever seen. After last year, there’s almost no news that could come as a surprise. With so much hanging in the balance, people might have stayed away from this city for a good long if they ever came back at all.
But make no mistake, the people are coming back and they’re buying property in Manhattan again. It’s already happening. We can see it and we can feel it. It’s almost like a minute doesn’t have 60 seconds in it anymore. Our phones are buzzing. Our whole team is on-the-go, non-stop, all-the-time, so we’ve got to move that much faster and be that much more efficient. Already, our 2021 day-planners are looking a little cluttered compared to the 2020 versions of the same book which weighs slightly less than a typical year-old planner because a less than average amount of ink got soaked into pages.
It’s not just a feeling. There are numbers to back up the resurgence.
Douglas Elliman’s Manhattan Signed Contract Report provides plenty of evidence on its own that demand can no longer be categorized as pent-up. One statistic in particular tells that story – New Contracts Signed. Last January, which was most definitely pre-pandemic, Elliman reported 194 contracts signed to purchase a Manhattan co-op during the month. In the January that just passed, there were 518 signed co-op contracts on Douglas Elliman transactions, a massive year-over-year increase. Last January there were 239 condo contracts signed on Elliman transactions. That number jumped to 360 this January.
Maybe it’s the promise of at least three effective vaccines that can fight off COVID. Maybe it’s about finally knowing which administration would be running the country for the next four years. Or it’s the historically amazing combination of ridiculously low interest rates and deep price discounts with massive credits developers are offering to cover closing costs in their new developments. It’s all of those things rolled into one. And it’s why they kicked down the door.
Here’s a look at some of the highlights from the referenced Douglas Elliman Manhattan Signed Contract Report that was recently published. (As organized by Alfred Renna, Executive Manager of Sales)
January ‘21 vs January ‘20
Average sales price increased to $1,452,605 from $1,226,363
Median sales price increased to $997,000 from $800,000
Discount from Original Asking Price increased to 16.6% from 11.1%
Discount from Last Asking Price decreased to 5.5% from 5.8%
Initial Index offer increased to 7.99% from 6.53%
Transactions over $1,000,000 increased to 49% from 37%
Transactions under $1,000,000 decreased to 51% from 63%
Median number of days on market to C/S, from last ask price decreased to 84 from 99 days
67% of Coop Sales are financed of which 84% are contingent on financing
4% of buyers are international
13% of Coops sold at ask & above the asking price.
Average sales price increased to $2,929,454 from $2,826,746
Median sales price decreased to $1,729,090 from $1,766,000
Discount from Original Asking Price increased to 14.4% from 14.3%
Discount from Last Asking Price decreased to 11.6% from 12.1%
Initial Index offer increased to 9.60% from 8.70%
Transactions over $1,000,000 increased to 80% from 74%
Transactions under $1,000,000 decreased to 20% from 26%
Median number of days on market to C/S, from last ask price decreased to 84 from 106 days
58% of Condo Sales are financed of which 76% are contingent on financing
19.6% of Condo Sales are New Developments
12% of buyers are international
13% of Condos sold at ask & above the asking price.
Number of Active listings for Coops and Condos on the market decreased by 2.7%.