Since March of 2020, New York City has seen a mass exodus as residents realized they could work remotely from a city or suburb with more space, cheaper housing, and even a yard.
But investors and homebuyers have turned their attention back to New York City after a beleaguered year defined by the coronavirus pandemic, according to Ryan Serhant, star of Bravo's “Million Dollar Listing New York.”
“New York is definitely in a very, very different space from the rest of the country. There has been a flight to air and space and land from New York City since last March. But we've seen contracts increase week after week, year-over-year, for the last, I want to say, 60 days. It's been really, really, really exciting — tempered excitement because anything can happen,” Serhant, a luxury real estate broker and founder of eponymous brokerage Serhant, told Yahoo Finance Live last week.
Indeed, purchase contracts for Manhattan co-ops in January 2021 were up 167% year-over-year, according to a monthly report from the real estate company Douglas Elliman. Units in the $1 million to $2 million a particular bright spot, seeing 222.2% year-over-year growth.
“There's been great activity on listings across the board. Our company is involved in multiple bidding wars at this point throughout New York. So it shows that people are coming back,” he said.
In his interview with Yahoo Finance, Serhant noted that word has been traveling around about so-called “COVID deals” with falling rents and home prices. StreetEasy noted in November that “sizable deals” on real estate abounded in New York, with 74% of the homes listed on the site going for less than the asking price between March 16 and Sept. 30 of last year.
“Because now there's this thing called a COVID deal that was really available last spring and summer. And when people got those, their friends started hearing about them. And now their friends are either vaccinated, or they feel much more comfortable,” Serhant noted. “They have a bit more consumer confidence.”
Serhant, author of new book “Big Money Energy,” said buyers are hunting for bargains, intrigued by lower prices and a surge in supply, and the idea that you can’t bet against New York. Mortgage rates also remain at historically low levels. As of Monday, the average 30-year fixed mortgage was 2.85%, 1.28 percentage points below the 2019 annual average rate.
“Everyone is saying the same thing at the same time. So if there are still buyers out there, it is still a good market to buy. But it won't be for that much longer,” he said.
Perhaps unsurprisingly, Serhant is long New York, even amid the popularity of Miami, Austin, Denver, and other markets.
“People said [no one would return to New York] after the savings and loan crisis, after 9/11, after 2008, and after Hurricane Sandy. And every single time, the market came back that much stronger. Suburbs, backyards have been around for a really long time, well before urban areas. And people flock to the cities for a reason. There’s strong energy here. And the reason you buy now is not for today. You buy now for the future.”
Melody Hahm is Yahoo Finance’s West Coast correspondent, covering entrepreneurship, technology and culture. Follow her on Twitter @melodyhahm.
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