Wait – isn’t there a housing crisis? Yes, and no. It depends on the market. If we were looking at suburban single family homes, we’d be challenged to find good buys. But we’re swimming upstream in this case. We’re looking at units in multi-family buildings in urban areas.
As people moved out of cities, relocating to suburban neighborhoods with less density and greater value, a glut of luxury condos flooded metropolitan markets. Eager to sell, properties are being offered at deep discounts, with even better deals for cash offers. In Manhattan, for example, of the 2,457 homes that sold during the first quarter of 2021, 97% closed at or below the asking price. That’s the highest share of sub-asking price deals since 2009, according to a report by appraiser Miller Samuel and real estate brokerage firm Douglas Elliman.
During that first quarter, the median price for sold condos was $1.55 million, down 4.7% from a year prior. The median co-op price was $780,000, representing a 3.8% decline. In certain neighborhoods, the discounts were even more pronounced. Midtown East condos were discounted 14% on average at listing, and the median price of completed sales in that neighborhood fell 12% to $1.3 million, according to brokerage firm Serhant. In Midtown West, the median price of completed deals fell 19% to $1.04 million.
In San Francisco, coinciding with a mass exodus of tech workers, all at once the city went on sale, and has mostly sat stagnant for over a year. Per CoreLogic, a financial services company that analyzes property data, the median price of a condo peaked at $1.285 million in March of 2020 and fell to $969,000 by January 2021. With steady sales and returning interest, prices rose slightly to $994,000 in April; still offering significant discounts.
To complement great buying opportunities, interest rates are at record lows. According to the latest data released by Freddie Mac, the 30-year fixed-rate average dropped to 2.98 percent with an average 0.6 point. That’s down from 3.02 percent a week ago and 3.07 percent a year ago… when we were already seeing record lows.
Now is actually an ideal time to take advantage of these once-in-a-lifetime market conditions to assemble a portfolio of luxury real estate that will see us safely through these challenging times and set us up for the future.
