For the last quarter of 2021, bargain hunters rushed to purchase apartments in Manhattan. Home sales in the borough reached a fourth-quarter record even though the Omicron variant scare has slowed the back-to-office return in the city.
Appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate released a new report Tuesday that highlighted 3,559 co-ops and condos were sold in the fourth quarter of 2021, the most sales for the quarter going back three decades. The average price for an apartment sold jumped 11% to $1.17 million compared with the same quarter a year ago.
The buying frenzy began in early 2021 as bargain hunters purchased apartments at a pandemic discount while thousands of Manhattanites in 2020 fled the metro area to suburbia because of pandemic lockdowns and violent crime.
Jonathan Miller, president of Miller Samuel, believes the buying frenzy will continue through the first half of this year.
"For the next several quarters, we're going to see above-average sales activity and that is going to go a long way to bring down inventory levels," Miller said.
"One of the things that has differentiated the Manhattan market with the rest of the country has been that it was late to the party, and the city's boom in activity really started at the beginning of 2021," he added.
Supply is down 25% from a year earlier to 6,207 apartments in the borough. This was the most significant annual reduction in seven years. Supply remains elevated, but bidding wars are starting to pick up -- the share of apartments sold above ask was 9.2%, the highest since early 2018.
A separate report on the borough's real estate market, released by Bess Freedman, chief executive officer at brokerage Brown Harris Stevens, showed tightening inventory is pushing home values higher and could suggest 2022 will be another banner year.
"The good news is that the foreign buyer has returned, Wall Street bonuses are incredible and we have a new mayor, which all bodes well," Freedman said. "Now, because pricing has ticked up a bit, it could slow things down with mortgage rates going up, but we'll have to see."
However, not all is rosy in the metro area. NYC Mayor Eric Adams has already promised to keep 1M+ students attending classes in person at the Big Apple's public schools. Wall Street megabanks - including JPM and Goldman Sachs - are delaying their employees' return to the office because of the Omicron scare.
Kastle Systems, whose electronic access systems secure thousands of office buildings across NYC, showed only 10.61% of workers were back at their desks in late December, compared with 37% on Dec. 2.
A lopsided recovery appears to be playing out. Housing could be recovering, but the overall recovery will sputter without workers in office buildings.