As the country endures record inflation and the impacts of Russia’s invasion of Ukraine, surprisingly – or not – the New York real estate market seems relatively unphased from the trajectory it’s been on since pandemic recovery began. February is being categorized by unprecedented demand, despite typically being considered a slow month in real estate.
High demand means higher prices. In the first five weeks of the year, 119 homes in New York sold for $5 million or more. That’s roughly double the same period in 2019. Throughout February, Manhattan and Brooklyn new signed contracts were double and triple pre-pandemic levels, respectively. Brooklyn’s luxury market continued its string of banner weeks at the end of February with an incredible 40 contract signings. 30 Front Street led the charge as unit 25A went under contract with an asking price of more than $8.2 million. The 33-story building has topped the luxury market at least four times in recent weeks.
New developments are back in the mix as a source of inventory after years of slowdown, but a new development report from Corcoran shows that demand will continue to outpace supply for the foreseeable future. The City is expected to add just 33,000 new units through 2024. Seventy percent of which is projected to be rentals.
In Manhattan, a sky-scraping mixed-use tower is coming to 520 Fifth Avenue. Slated to become the avenue’s second tallest building (exceeded only by the Empire State Building), the development will include 98 residential units, office space, and amenities such as restaurants, retail, and a solarium. The rezoning of East Harlem was recently approved, which will add housing inventory as well. The plan for the 96-block zone includes $222 million in promised public housing investments and 1,288 affordable housing units.
Sanctions against Russia are causing a bit of activity in the New York market, too, as some wealthy Russians look to unload their assets. The co-owner of Moscow’s Domodedovo Airport is looking to part with approximately $250 million worth of property in the New York area, including a spread in the Plaza Hotel and properties at 15 Central Park West and 515 Park Avenue. The co-founder of recently sanctioned Alfa Bank is selling a quadruplex at 33 East 74th Street for $41 million.
A bit more optimistically, buyers are seeing some relief from the competition in the Hamptons and North Fork, where new contracts for single-family homes were down more than 45 percent. Meanwhile, available inventory is holding steady. But don’t consider it a weakness for either neighborhood; the areas are merely cooling after record activity during the pandemic.
Unfortunately, renters won’t find much reprieve from the housing demand either. Bidding wars are nearly standard practice as rents in Manhattan broke records and vacancies fell to the lowest levels since 2008. In February, the median rent for a building with a doorman surged to $4,500, and the median rent for luxury rentals reached $11,500.