Real Estate Leaders Discuss Rebound of NYC’s Luxury Market
Real Estate In-Depth | June 15, 2021
NEW YORK—Top New York real estate professionals zoomed in on the region’s luxury housing market to analyze the wave of multimillion-dollar sales, and weighed in on pricing, buying trends and prized locations at a virtual panel recently hosted by the Hudson Gateway Association of Realtors, Inc. and OneKey MLS.
All agreed the luxury markets in the region are red-hot and if market conditions are favorable, could remain strong for a long time.
Hundreds of industry professionals registered for “Getting the Deal Done: Homing in on New York’s Luxury Housing Market,” which featured Donna Olshan, President of Olshan Realty Inc. and Olshan Group LLC in New York City; Vicki V. Negron, a Licensed Associate Broker with Corcoran in Brooklyn; Anthony P. Cutugno, Senior Vice President and Director of Private Brokerage at Houlihan Lawrence; and Kael Goodman, President and CEO of Marketproof Inc., a real estate data and analytics company based in Brooklyn.
“The luxury housing market enjoyed one of its strongest years in more than a decade,” said event host Richard Haggerty, CEO of HGAR and President and Chief Strategic Growth Officer of OneKey MLS, the regional multiple listing service for New York. “Much of that growth is due to ‘work-from-home’ and other pandemic trends fueling buyers’ desire for more open space. Is this a bubble? Our expert panel today crunched those numbers to help you manage transactions and get deals done.”
The discussion was moderated by Brian D. Tormey, NTP, president of TitleVest, a leading New York City-based provider of title insurance and related real estate services. The hour-long session focused on the long-running streak of multimillion-dollar sales, average selling prices, in-demand amenities, inventory and market forecasts.
According to Olshan, condos have been a critical driver of the luxury market in Manhattan, and size has been a huge factor.
“We’re seeing a streak we’ve never seen before—we have gone 14 weeks with contracts signed at $4 million and above in Manhattan. We’ve been charting this since 2006 and we’ve never seen anything like this,” she said. “People are buying condos, and what makes this period of time different is that people are buying larger condos. The average price for these condos is higher than it has been in the past, but because the size is 8% higher, of course the price is going to rise.”
In Brooklyn, outdoor space, whether common or private, has been driving the market, according to Negron. “Outdoor space, the size of the condos, and the fact that we may need to be working from home indefinitely, or at some point again, are all important factors to consider,” she said. “Apartment size and outdoor space is almost as important as location to transportation used to be.”
When discussing the suburban markets and the boom they have seen as a result of the pandemic, Cutugno said, “When COVID happened and everyone was at home, space became important, and we started selling hand over fist properties that we couldn’t sell pre-pandemic. Bigger isn’t necessarily better; what we’re seeing is a redistribution of space to better suit changing needs.”
Cutugno identified another change in buyer sentiment: “For a while, buyers saw real estate as an investment. Because of COVID, people have tasted the lifestyle and the emotional value of one’s home. The second home is going to be a big part of the future.”
According to Goodman, what sets New York City’s luxury and ultraluxury markets apart from others around the country is the inventory available. And while international buyers have decreased during the pandemic, he is starting to see a shift.
“The good news for buyers and agents is that the sponsors are meeting the moment out of necessity. Pricing has come down quite a bit, which is offering a good buying opportunity,” he said. “The international buyer will be back. It hasn’t really happened yet, but the tides are turning a bit thanks to some changes that are being made in Washington. There’s a couple buildings we’re working with that are actively getting their international buyer structures back in place so they can start bringing those people back to New York.”
The panel is mixed on whether the current market feels like a “bubble.” Negron said she feels the market is in a bubble. “As the wealth pushes east, the neighborhoods become saturated and I think the bubble will reach its maximum and things will tend to stabilize.”
She added, “We are busy non-stop. I almost never put my phone down because people are buying, selling and renting and moving up in such a fast pace it just can’t sustain itself. Something has got to change.”
Goodman said that the Brooklyn housing market has been strong for a decade and noted that Kings County has more condo sales than Manhattan. The western edge of Queens is also growing, although dollar volume in both Brooklyn and Queens are substantially lower than Manhattan.
“Manhattan is doing just fine. Yes, the prices are way down, but the volume has picked up a lot. So, is it a bubble? I think it largely depends again on the decisions that are made in government and with interest rates. If rates stay low, there is going to be a lot of activity for a long time,” Goodman predicted,
“Getting the Deal Done” is part of the “Be Your Best” webinar series created by HGAR and OneKey MLS, to help Realtors and agents navigate the changing landscape amid the pandemic. The event was sponsored by TitleVest.