Pent-up demand: Manhattan penthouse contracts soar

After spending more time inside over the past year, homebuyers desperate to upgrade are looking up — to the penthouse.

Through the first five months of the year, 226 penthouse contracts were signed in Manhattan, the most since Corcoran’s market research team began tracking the figure in 2007.

From 2010 to 2019, that January through May period usually sees an average of 155 penthouse deals inked, according to Corcoran. Among the sales was supermodel Bella Hadid’s $6.5 million penthouse that went into contract at 63 Greene Street in April. Hadid listed it a month earlier.

The latest figure is a 35 percent increase from the same time in 2019, when 164 contracts were signed. The last time the number of penthouse deals came close to 226 was in 2007, when 203 contracts were signed.

The latest report is based on signed contracts designated with “penthouse” or “ph” that were reported in StreetEasy and the brokerage’s own listing system. The numbers were originally released to agents in May, when Corcoran’s research team spotted the uptick.

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For years buyers have waited for their moment to snatch up a penthouse, and thanks to low interest rates, now seems to be the time.

Jonathan Miller of appraiser Miller Samuel, identified another reason.

“The economic damage caused by the pandemic was less impactful for mid- and upper-tier salary types,” said Miller, whose firm also tracks the penthouse market. It also helps that sellers have been more pragmatic about their pricing.

“What Covid did was invert the default market pattern of the last five years, and now penthouses and higher-end properties are moving,” Miller added.

For buyers with the means, pandemic lockdowns and restrictions may have also played a part.

“People are spending a lot more time at home and want to be excited about their space,” said Corcoran’s Ryan Schleis. “Better views that come with the building, outdoor space, most penthouses offer that.”

Though outdoor space was a perk in the past, not everyone wanted it, Schleis added. Now there’s a shift as buyers seek a variety of spaces in their home to host events.

The number of penthouse contracts continued to rise in June, which saw more than 60 penthouse contracts signed, the most deals a month has seen so far this year. Thirty-two contracts were signed in July.

While penthouses are known to dominate luxury lists, not all of them top $4 million, which is often considered the luxury price point in Manhattan.

“People forget that half of the market in Manhattan is under a million dollars,” Schleis said. Of the 288 transactions signed through June, 159 were last asking less than $4 million.