“A garbage year”: The state of Manhattan’s luxury resi market in 2020

Contracts signed declined by 31% in 2020

There was a 31 percent decline in contracts signed for properties above $4 million compared to last year. (iStock)
There was a 31 percent decline in contracts signed for properties above $4 million compared to last year. (iStock)

Donna Olshan isn’t mincing words when it comes to the state of Manhattan’s luxury residential market in 2020.

“I just consider 2020 a year you can throw out,”Olshan said. “It’s a garbage year.”

It’s a sentiment that rings true on multiple levels, and in the context of Manhattan properties priced above $4 million — which Olshan has tracked since 2005 in a weekly report — the numbers are irrefutable.

According to her latest report, which looks at the year as a whole, there was a 31 percent decline in signed contracts in 2020 compared to last year.

And the past few years haven’t been that great: There was a steady decline in contract volume between 2013, when 1,372 contracts were signed for townhouses, condos and co-ops, to 2020, when just 645 similar deals were inked.

Given the pandemic, it’s hard to treat 2020 as a regular year. After the state locked down in the spring, luxury deals slowed to an average of four per week. Though the market later rallied, it wasn’t enough to get close to the 935 contracts signed in 2019. From a data perspective, “this will go down as one of these years with a big asterisk after it,” Olshan said.

The co-op market was particularly weak, with just 133 contracts signed in 2020 compared to 222 last year. Condos did better with a total of 418, though that was still a big drop from 595 last year. In 2015, when the condo market was at its peak, 904 contracts were signed.

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Among the condos that went into contract, the average asking price was $2,733 per square foot, down from $2,802 last year and $2,825 in 2015.

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When the pandemic first hit, many brokers (well, townhouse brokers) predicted single-family homes would come out a winner. After all, why would you want to stand in a crowded elevator to get to your apartment when you could walk right into a spacious home?

But in the luxury market, at least, those predictions may have been overblown. In total, 92 townhouses priced above $4 million went into contract in 2020, down from 114 last year. “What bears out is that cheaper townhouses sold,” Olshan said.

The average discount between the first and last asking price across all the properties types was 12 percent, up from 10 percent last year. But Olshan said that the full spectrum of discounts given in 2020 won’t be clear until all the properties that went into contract have closed.

Among all the downward-facing figures, there was one data point that increased this year: the size of homes that went into contract.

As New Yorkers grew accustomed to working from home, they sought out bigger properties. The average condo size of those that went into contract this year was 2,953 square feet, up from 2,874 square feet the year before.