Ali Ata on Real Estate News Manhattan Real Estate Business Falls to a Standstill; Industry Experts Say Prices Could Plunge Some More

Ali Ata notes that Manhattan's real estate sales have fallen to zero at the end of March. Industry experts predict that prices could dive 30% or more once business resumes.

Total sales volume rose 14% from January to early March of 2020, powered by a robust first two months, says a Douglas Elliman and Miller Samuel report. However, the average sale price for a Manhattan apartment dove 11% in that quarter to about $1,887,740. 

Market in shock
When the coronavirus outbreak began to affect the area in the last two weeks of March, the market went into shock. According to a report from Olshan Realty, only two contracts above $4 million were signed in the last week of the month. Ali Ata observes that it was the worst week for the market since that fateful August in 2009 when the financial crisis hit.

New listings went down by 85% in the latter end of March compared with the figures from a year ago, says a report by UrbanDigs. Sellers pulled off existing listings from the market as buyers could not or did not want to look at apartments during the outbreak. Urbandigs says that the number of listings that came off the market rose by 68% compared to last year.

A slippery slope
What will prices look like when the market recovers, which could be in summer or fall?

The Manhattan real estate prices and sales were already in the middle of a two-year downward slope before the coronavirus hit. Ali Ata adds that it is all made complicated with tax changes, lack of foreign buyers, and an oversupply of condos, all affecting sales.

No light at the end of the tunnel yet
Stock market declines, and the pandemic will most likely cause another slippery slope. CEO of Miller Samuel, Jonathan Miller, says that the median prices during the 9/11 attacks and the financial crisis fell between the range of 25% and 30% for a brief period. 

He adds that it's possible to see something comparable during this time. But while the two events mentioned had definable timelines, Ali Ata says that no one knows how long the pandemic will last.