Dear Clients and Friends,
As we approach the end of 2021, we hope you find the Novack Team Update below informative in taking stock of the NYC Residential market this year.
What is Driving the NYC Residential Market’s Success?
- Finance and investment professionals, which represent one of the primary proportions of luxury real estate buyers in NYC, are anticipated to receive the largest year-end bonus increases since 2008. These increases are forecast to be between 10 – 35% depending on the specific field.
- On a related note, we have personally seen this expected increase in liquidity among relatively younger professionals (40’s+) translate into a desire to buy larger space for their growing families which has been compounded by the COVID-era preference to upsize.
- In fact, the two weeks of November leading up to Thanksgiving saw 127 contracts signed on properties above $4 million, the highest level for all of 2021.
Return to the Office:
- One of the key drivers for the NYC residential market is a return to in-person office work in the city. This not only effects the need for individuals to maintain a residence in the city, but also drives the surrounding restaurant, retail, and service venues which are so key to NYC’s economy and street life appeal.
- According to a poll conducted by the Partnership for New Yok, by the end of January 2022 real estate firms expect 80% average daily attendance of Manhattan office employees; while law firms expect 61%; and financial services firms 47%. These percentages may well increase now that New York City is instituting a vaccine mandate for all private companies in conjunction with returning to the office.
- Companies are also demonstrating their long-term commitment to the city as reflected by recent increases in commercial leasing.
- Office tenants in Manhattan signed more than 3 million square feet in November 2021, the first month to exceed that hurdle since January 2020’s 3.6 million.
- To add perspective, Manhattan’s monthly office leasing volume in 2019 was ~3.5 million square feet, while the 2020 monthly average was ~1.5 million.
- Total Manhattan commercial leasing through November 2021 was 22.13 million square feet, a 27.4% increase vs. the same period in 2020, but 41.1% lower than 2019.
- Virtually all private and public schools are conducting in-person learning, with third quarter attendance rates estimated at ~89%.
- The 4,523 Manhattan apartments sold in 3Q21 represent the highest quarterly volume in the last 32 years.
- At present, available residential apartment inventory is particularly scarce. While listing volume is not that low for a typical year, the number of contracts being signed is so high above historical averages that it is creating a net deficit. For example, the last month saw 1,040 new listings enter the market vs. 1,277 contracts signed and 758 units being taken off market.
- Inventory is unlikely to see significant increases again until January/February 2022 – a fact which should make sellers seriously consider listing in the short term to take advantage of the lack of competition and an unsatiated buyer pool.
Featured Novack Team Transactions:
TWO PRISTINE FIFTH AVENUE RESIDENCES WITH DIRECT PARK VIEWS