Buyers shunned Manhattan co-ops and condos for suburbs in July
"There’s a powerful force pushing an outbound migration from the city to the surrounding suburbs,” says Jonathan Miller of Miller Samuel.
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The siren call to the suburbs is drawing buyers from Manhattan, where the number of new signed contracts for co-ops and condos tumbled sharply in July, falling by 56 percent, despite in-person showings resuming in late June.
July was also notable for the release of pent-up supply from the showings ban. The number of new listings on the market jumped in New York City and several suburban markets, inflating inventory, according to the latest addition to The Elliman Report, a monthly look at new signed contracts and listings for Manhattan, Brooklyn, Long Island, Hamptons, North Fork, with the addition of three new areas: Westchester County, Fairfield County, and Greenwich, Connecticut.
“Manhattan was the underperformer,” says Jonathan Miller, president and CEO of appraisal firm Miller Samuel and author of the report.
He notes that signed contracts for co-ops and condos declined at nearly precisely the same rate, 56.9 percent for co-ops and 56.1 percent for condos. For some price levels, the drop was even steeper, for example, signed contracts for co-ops in the $1 million to $1.99 million category fell 60.4 percent.
"There’s a powerful force pushing an outbound migration from the city to the surrounding suburbs,” he says. According to the New York Times, 40 percent of New Yorkers living on Manhattan’s wealthiest residential blocks left the city between March 1st and May 1st.
“Wealth was the driver," Miller says, referring to New Yorkers who had the means to go to the Hamptons, Airbnbs, or stay with family. “Now they may stay there, with schools in limbo,” he says.
With the announcement that Chicago public schools, the U.S.’s third-largest district, will opt for remote learning in September, NYC is the only major school system in the country that is preparing to offer in-person learning this fall. But many teachers and parents question the safety of in-person learning, and some teachers are threatening a sick out. And some parents are opting for remote-only learning on an individual basis—and are choosing to move out of the city to get more space to accommodate learning and working from home.
Still, the city saw an uptick in activity recently, and Brooklyn is faring better than Manhattan, however a rebound is “taking longer than anticipated,” Miller says
The report notes that single family and condo new signed contracts in Brooklyn jumped from year-ago levels for the first time since the shutdown. (However, these are in the double digits—for example there were 43 new signed contracts for Brooklyn single-family houses priced $1 million to $1.99 million in July 2020, compared to 16 in July 2019, so the increase of 168.8 percent feels like big leap.)
The contrast between the city and the suburbs is striking.
New signed contracts for single family and condos on Long Island surged ahead of year-ago levels for the first time since the shutdown, the report says. Activity was highest in $400,000 to $499,000 and above for single-family houses, and for condos priced $500,000 to $599,000 and higher.
In the Hamptons, new signed contracts for single-family houses were more than double its year-ago level, surging above the prior-year results for the second straight month, the report says, a result of migration from the city. There was similar activity on the North Fork.
Westchester and Fairfield counties and Greenwich Connecticut also saw gains in new signed contracts for single-family houses for the second straight month, benefiting from New Yorkers leaving the city, the report said.
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