Home sales, leasing took a nosedive in Lower Manhattan in Q2
Rental inventory ballooned in FiDi and Battery Park City
Lower Manhattan’s sales market saw activity and prices plummet last quarter, while its rental market chugged along, according to Platinum Properties’ quarterly report.
In Battery Park City, nine homes were sold in the second quarter — a 68 percent year-over-year drop. The median sales price also fell about 14 percent to $923,750 from close to $1.1 million the prior year.
The Financial District’s sales market took an even larger tumble. The number of sales fell 70 percent to 17, compared to 56 during the second quarter of 2019. The median sales prices dropped 22 percent to $898,500 from $1.1 million a year before.
Homeowners looking to sell their properties in both neighborhoods didn’t budge much on pricing. In Battery Park City, the average listing discount was 3.8 percent, while in FiDi it was 4.2 percent.
Within the brokerage community, there’s widespread consensus that buyers will demand discounts while the pandemic continues to shake the economy. Many estimate that the so-called pandemic pricing discount will be between 5 to 10 percent.
Platinum’s sales manager Michael Rider said he expects to see deeper price discounts next quarter. “I think there were too many unanswered questions,” he explained.
The rental market in both neighborhoods was a different story.
FiDi landlords saw median rent grow 2.6 percent year-over-year to $4,119. Though the number of new leases signed slipped 21 percent to 515 from 653 the same period last year, the figure was still up about 14 percent from 454 during the first quarter of 2020.
In Battery Park City, however, median rent slipped 5 percent to $4,805 from $5,051. The number of units rented dropped 29 percent to just 228 new leases signed, compared to 321 a year earlier.
Though both rental markets appear to have fared relatively well, Rider said that the quarterly increase in inventory could be a sign of trouble. For the last two months, the entire borough of Manhattan has reported unprecedented increases in vacancy.
FiDi inventory has ballooned by 40 percent to 1,056 apartments on the market, compared to 757 available in the first quarter of the year. Battery Park City inventory grew by almost 73 percent to 473 from 274 the quarter before. That said, both numbers are on par with inventory in the second quarter of 2019.
But Rider says that the low number of new leases signed coupled with rising inventory is prompting landlords, particularly in FiDi, to make some big concessions, from offering up to two and a half months of free rent on a 12-month lease, to waiving amenity and move-in fees.
“It’s kind of amazing,” he said.
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