New York developments double down on outdoor space and healthcare as luxury sales rebound
The New York City sales market took an unprecedented hit at the height of the Covid-19 pandemic in 2020, and the recovery is still underway. But as shoppers began to return to the city, a curious dynamic emerged: After the high-end market weathered several years of declining activity, luxury deals drove the city’s sales back.
“Before Covid, for five years the market was soft at the top and tighter at the lower prices,” said Jonathan Miller, CEO of valuation firm Miller Samuel and author of Douglas Elliman’s Market Reports. “Since the end of confinement, it has been the opposite. And because new developments distort luxury, the image of new developments has improved.
In an economic crisis that has primarily hit low-wage earners while creating vast stock market gains for middle- and upper-income buyers, Miller said, conditions have shifted in favor of demographics that typically gravitate towards new developments. “There is still an oversupply problem, but conditions have improved.”
While the luxury market still sees a smaller share of international shoppers than in previous years, Mr Miller said: “There have been people looking for discounts, and the [amount of available discounts] compresses. There is a time limit on that.
The median price for a luxury apartment in Manhattan in the second quarter was $5.6 million, Miller said, a 2.4% increase from 2020 but a 9.1% drop from 2019. In comparison, the median selling price for new developments in the second quarter was $2.47 million, down 7.1% from 2020 but up 1% from 2019.” In in other words,” Mr. Miller said, “new developments are doing better than the luxury market in terms of pricing trends.”
This fall, a new generation of luxury developments are arriving under favorable market conditions, with designs reminiscent of the city’s classic architecture and focusing on panoramic city views, spa-like amenities and new amenities. post-Covid benchmark: lots of fresh air and outdoor space.