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”
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