Blow to luxury market from Covid worse than impact of 9/11

“Calling people now, it could be like calling them after shiva or after a funeral”

New York /
Aug.August 21, 2020 11:00 AM
A view of Billionaire's Row (Photo by Gary Hershorn/Getty Images)

A view of Billionaire’s Row (Photo by Gary Hershorn/Getty Images)

Covid-19 has dealt a blow to New York’s luxury real estate market that is worse than the 2008 financial crisis and the 9/11 terrorist attacks.

The virus plowed into a market that was already scuffling, and industry pros now say that to encourage deals they may have to provide additional discounts that will sink prices even further, according to the Wall Street Journal.

Manhattan home sales cratered 56 percent year-over-year between March 23 and Aug. 16; and for properties at $4 million or above, the drop was 67 percent, according to the Journal, citing data from UrbanDigs.

Luxury properties sold in the second quarter showed an 11-percent price drop, the Journal noted, citing Douglas Elliman. New listings were also down, by 21 percent, while new listings priced at $4 million and over fell by about 35 percent, according to the Elliman data.

At its luxury condo building the Getty in West Chelsea, developer the Victor Group recently slashed prices 42 to 53 percent on the remaining unsold four units. That comes two years after a penthouse in the West 24th Street building sold for a record $59 million.

But besides having to adjust to virtual showings and the general drop in interest among potential buyers — many of whom have opted for the Hamptons and other spots outside the city — Manhattan agents also have to be mindful of the toll the virus has taken.

“Calling people now, it could be like calling them after shiva or after a funeral,” Ran Korolik, a Victor Group partner, told the Journal. “You don’t know who died or how people were affected by the situation. Maybe their client didn’t take a salary this year.” [WSJ] — Sasha Jones


Related Articles

arrow_forward_ios
Here are the week’s top luxury sales
Here are the week’s top luxury sales
Here are the week’s top luxury sales
Clockwise from left: John D. Rockefeller, Izzy Englander, Steven Mnuchin, David Koch, Jacqueline Bouvier, and William Zeckendorf (Credit: Getty Images and StreetEasy)
For 15 years, David Koch lived at the world’s “richest building”
For 15 years, David Koch lived at the world’s “richest building”
Here are the week’s top luxury sales
Here are the week’s top luxury sales
Here are the week’s top luxury sales
PHE at 51 Jay Street and 4 Hunts Lane (Compass)
Dumbo penthouse leads Brooklyn’s luxury market
Dumbo penthouse leads Brooklyn’s luxury market
605 3rd Street and Casper's Luke Sherwin (Leslie Garfield, Getty)
Firm offer: Casper co-founder pays $275K over ask in Park Slope
Firm offer: Casper co-founder pays $275K over ask in Park Slope
HFZ's Ziel Feldman (The XI)
HFZ set to lose stake in $2B XI condo project
HFZ set to lose stake in $2B XI condo project
The penthouse in Lightstone's 40 East End with developer David Lichtenstein (Lightstone)
After early-July lull, Manhattan luxury deals are on the upswing again
After early-July lull, Manhattan luxury deals are on the upswing again
At 432 Park, a $30M condo is in default and its owner has vanished
At 432 Park, a $30M condo is in default and its owner has vanished
At 432 Park, a $30M condo is in default and its owner has vanished
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...