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Manhattan apartment deals plunge 57 percent, suburban real estate surges

Hundreds of thousands of affluent New Yorkers have fled the city for the suburbs during the coronavirus pandemic.
The Manhattan skyline is visible in the distance as a man visits Governors Island on July 15, 2020 in New York.Angela Weiss / AFP - Getty Images file
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Apartment contracts in Manhattan fell by more than half in July, while deals in many New York suburbs more than doubled, showing a continued flight from the city over the summer.

The number of signed contracts for co-ops and condos in Manhattan — the best real-time measure of activity — dropped 57 percent in July compared with a year ago, according to a report from realtors Miller Samuel and Douglas Elliman. The high end of the market is getting especially hard hit, with co-ops priced at $4 million to $10 million down over 75 percent.

As deals dry up, the number of apartments listed for sale is surging. New apartment listings jumped by 8 percent in July compared with a year ago. The number of unsold apartments is now at the highest level in almost a decade, according to Jonathan Miller, CEO of Miller Samuel. At the current sales rate, there is more than a 17-month supply of apartments for sale — more than twice the typical Manhattan average of about eight months.

“The city is less of an anchor now. It’s going to take longer for the city to recover than the suburbs.”

Miller said the lockdown in the city — which prevented brokers from showing apartments until late June — combined with hundreds of thousands of affluent New Yorkers fleeing the city for the suburbs during the coronavirus pandemic made for a tough July, and potentially the summer.

“The city is less of an anchor now,” he said. “It’s going to take longer for the city to recover than the suburbs.”

Suburbs around New York had a banner July, as New Yorkers purchased second homes for escape — and possibly a new primary residence. Sales contracts in the Hamptons more than doubled in July, with 267 deals. Signed contracts in Westchester County, New York, also more than doubled to 987 deals.

Connecticut has been an especially large beneficiary of New York City’s troubles. There were more than 1,200 signed contracts in July in Fairfield County, Connecticut, while Greenwich itself saw an increase of 72 percent.

“Anything within a two-hour radius of the city is as busy as it’s ever been,” said Scott Durkin, president and chief operating officer of Douglas Elliman. “There’s just this fear of density right now.”

The developer of the Getty building in downtown Manhattan has slashed prices by over 50%. One 3,800-square-foot unit that had once been offered for over $20 million is now being listed for $10.5 million.Evan Joseph / via Victor Group

Still, New York real estate brokers say the city will recover quickly, once there is a vaccine and companies start bringing workers back to the office. They point to Sept. 11 and the Great Recession as proof that the city always rebounds. And they say the deep discounts that many buyers are hoping for aren’t likely to materialize since sellers have so far balked at big price cuts.

“We had price cuts before COVID-19,” Durkin said. “With interest rates so low, prices may not be as negotiable as some buyers might hope. But there will be people in different situations, and some might need to sell.”

One segment that will likely have to cut prices is new condo developments. Brokers say new developments, which listed with sky-high prices during the past few years, will have to adjust to the more competitive market.

On Wednesday, the Getty Residences — a glamorous new condo building in downtown Manhattan — announced price cuts of more than 50 percent on some units. One full-floor unit, with more than 3,800 square feet, had once been offered for over $20 million and is now listed for $10.5 million. The penthouse of the building was sold in 2018 for $59 million to hedge fund billionaire Robert Smith.