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Manhattan residential market lags Urban America

When it comes to new development, NYC buyers are choosing Brooklyn and Queens, where they are finding larger and cheaper units, NYTimes reported. Although discounts at such projects remain modest, buyers are getting concessions and a first crack at condos with better views and layouts.

  • Ultra luxury market feels the pain: Extell’s Gary Barnett told the NYTimes: “We just can’t get those prices anymore.” He noted that discounts in the high end market can range anywhere from 5 percent to 30 percent. “It beats the hell out of our margins.” He added that his firm is losing money on more than one project. 
  • Primary residence buyers: Jonathan Miller noted that nearly every large urban market nationwide has improved since the height of the pandemic except for Manhattan. Perhaps one reason for the disparity is the astronomical rise in prices over the last decade that targeted a shrinking pool of well-off buyers. Their departure means more opportunities for first-time buyers, who often compete with cash-flush investors looking to buy multiple units to rent or flip.
  • Bottom line: Citywide, more than 60 percent of new condos remain unsold, and lower-end units are faring better than higher-end ones.

A tale of two markets – NYC stands alone: A Mortgage refi boom nationwide indicates strength of residential market in other urban markets:

  • The mortgage market recorded its best quarter in years this spring, a reflection of how the housing market is booming in 2020 even as much of the economy stumbles. Lenders issued $1.1 trillion in home loans between April and June, according to data firm Black Knight. That was the biggest quarter in the company’s records, which date to 2000. Lenders extended roughly $2.5 trillion in home loans in all of 2019. Refinancings, up more than 200% from a year ago, drove the increase. Low interest rates have made millions more Americans eligible to save money on their monthly payments. Purchase mortgages, though, fell 8% from a year earlier.  [NYTimes+WSJ]

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