Real estate prices are starting to rise across Manhattan
BY HAEVEN GIBBONS
As the real estate market
continues to recover
from the pandemic and
luxury sales increase, prices are
starting to rise. The price growth
is driven by new fall inventory and
an uptick in luxury sales.
“We will see prices slowly but
surely go up,” said Scott Savory,
a New York Licensed Associate
Real Estate Broker with Compass.
People should be motivated to
buy now while mortgage rates are
still low, said Savory who is part
of the StreetEasy experts program
that allows buyers to work with
partner agents for free to navigate
the home buying process. There
are no signals in the market indicating
it will collapse or correct
anytime soon. Demand is outpacing
supply, so people should think
about purchasing now versus
later, he said.
“I think we’re going to see
more listings come to market in
the fall, and I think the market
will resume its normal state which
is a slow rise,” Savory said. Adding,
“As fall inventory comes to
market, buyers will see the market
rise even more as buyers will have
new inventory and listings to engage
with.”
Affordability and
availability for firsttime
buyers
But the economy is still recovering
from the pandemic, so, for
now, mortgage rates are still near
record lows, prices are stable
and homes are available, which
has been a really good opportunity
for buyers to come onto the
market recently, said StreetEasy
economist Nancy Wu.
In StreetEasy’s annual study
to fi nd the neighborhoods with
the most homes accessible to
fi rst-time buyers post pandemic,
Sheepshead Bay was ranked the
number one best neighborhood
for fi rst time home buyers by
SteetEasy. Sheepshead Bay had
330 apartments on the market
between June and August of this
year that fell within StreetEasy’s
affordable monthly spending
range of $2,346.
In their study, StreetEasy
looked at the absolute number
of affordable listings in a given
area, out of all sale listings between
June and August 2021,
that would be affordable to New
Yorkers between the ages 25 to
44 who earn the city’s median
annual income of $70,406. Most
fi rst time buyers are millennials,
and the typical new buyer is 37.
StreeEasy’s defi nition of “affordable”
factored in a 20% down
payment, as well as the costs of
maintenance, taxes, and common
charges. StreetEasy arrived
at a maximum monthly outlay
of $2,346. The median asking
price of all the homes StreetEasy
considered affordable in the top
10 neighborhoods was $352,780.
Midtown East and the Upper
PHOTO VIA GETTY IMAGES
East Side were two surprising
Manhattan neighborhoods that
made StreetEasy’s list. The Upper
East Side gained more inventory
in 2021, meaning more affordable
homes were listed in the area. But
many of the lower-priced units in
these areas were co-ops.
Midtown East and the Upper
East side are two of the largest
neighborhoods in New York City,
so there were more listings- 3,550
in July 2021. 322 of those listings
were determined possible homes
for average-earning shoppers,
according to Street Easy’s data.
“Midtown East has always
been a value play because the
housing stock there is so generic,”
Seawood said. There are a lot of
older buildings and not a lot of
new development.
While the Manhattan price
sales market has been recovering
month after month for the past
two or three months, that price
growth is not happening in the
Upper East side yet, helping to
make it more affordable right
now, Wu said.
In the Upper East Side, the
value is East of Third Avenue,
far from Central Park, from 90th
Street and up, but value is also
relative to size and the type of
building, Seawood said.
First-time home buyers who
want a place to stay for fi ve to
10 years can fi nd good deals
that would be more affordable
than renting, especially as rents
are starting to tick up again as
the market recovers from the
pandemic, Wu said.
Buyers and bargaining
power
As the market has started to
recover, buyers have lost their
bargaining power and buying a
house for a steal is in the past.
“Everyone tries to time the bottom
of the market, and the data is
showing us that that’s clearly past
and it’s better to catch it on the
way up as it continues to rise,” Savory
said. He pointed to the 2008
housing market crash and how in
the years following, prices rose.
Ten years ago, a brownstone
in Bed-Stuy was 600,000. Now,
homes in the neighborhood are
selling for 2 million dollars.
Based on inflation, demand,
development and the growth of
this city, prices continue to rise
always, Savory said. The market is
cyclical, but today more and more
people are considering owning
versus renting, he said. Coming
out of the pandemic, prices will
likely continue to rise.
The top 10 neighborhoods with the most homes accessible to
first-time buyers according to a study by StreetEasy.
No one will really argue that,
coming out of the pandemic, there
are maybe still some opportunities
here or there, said Seawood.
“But not like it was when we
were knee deep in it (the pandemic)
and people were bailing
out of the city and it felt like New
York was on fi re,” Seawood said.
Out-of-towners are
moving in
Prices will also continue to rise
not only as people move back into
the city but as people move to the
city.
“I’ve been running into a lot of
people from San Fran and California
who have been moving to
New York and have been saying
this is a better transition because
their market is falling, especially
their rental market, and that big
city individual is coming to NYC,”
Savory said. “As buyers move to
New York with bigger pockets
that might push our base level
pricing upward which pushes the
entire market upward.”
According to StretEasy’s
August 2021 Market Report, an
uptick in luxury sales is causing
price growth in New York City.
The median asking price in Manhattan
was the highest it’s been
since June of 2020, reaching
$1,425,000.
Homes valued within the top
20% of properties on the local
market, or luxury homes, saw a
year-over-year price increase of
2%. In all other price tiers, prices
dropped or stayed the same.
Rents rose the fastest for the
most expensive apartments, and
the ones with the most amenities.
But rental inventory is the lowest
it’s been since April of 2020 with
only 18,569 Manhattan rentals
available in August.
“New York City has never been
known for affordability, but for
buyers who are on a budget, there
are neighborhoods where you can
fi nd a lot of options that will fall
within the budget,” Wu said.
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