Manhattan's Luxury Market Has Had Best Year Since at Least 2006

Buyers returned to the city after the vaccine rollout, taking advantage of lower prices and still-low mortgage rates

V.L. Hendrickson | Mansion Global

If 2020 was marked by an evacuation from Manhattan, 2021 brought buyers back, especially to luxury residences.

A total of 1,877 transactions of residences priced over $4 million pushed the dollar volume of sales to $15.9 billion this year, according to Olshan Realty’s year-end report, released Wednesday. That’s nearly three times more than last year when the Covid-19 virus drove affluent buyers out of the city, and twice as many as in 2019.

In addition, the totals for both signed contracts and volume are nearly 30% higher than the highest years of 2013-15, according to the report. Olshan Realty started keeping track of the data in 2006.

New York buyers regained confidence in city living once a vaccine program was in place, the report said. A strong year for Wall Street combined with lower asking prices on homes in the city and still-low interest rates, plus the addition of several new developments by prominent architects, also lured buyers.

“Perhaps the biggest pandemic trend was this: The rich got richer—and they also bought bigger,” Donna Olshan, the president of Olshan Realty, wrote in the report. “Size mattered more than ever as offices and schools shifted to the home.”

Indeed, in 2020 and 2021, the average size of a luxury condo that was sold was 2,900 square feet, about 5% larger than in the previous seven years, the data showed. The desire for more space also gave the townhouse market a boost—there were 212 deals for townhouses, compared to the previous record of 153 in 2014.

Furthermore, there were 400 contracts signed for residences priced at $10 million and above, far surpassing the previous record of 270, also in 2014, the report said. Most of these so-called trophy properties were more than 4,300 square feet.

The average price for a luxury residence in Manhattan was $8.5 million this year compared to $7.9 million in 2020, the data showed. The median price this year was $6.5 million, down slightly from 2020, when the median price was $6.7 million.

Toward the end of the year, prices in Manhattan started to stabilize, with less negotiability from sellers. The Upper East Side saw a boom in sales as new projects by architects like Robert A.M. Stern, Steven Harris and Peter Pennoyer came online.

“These buildings attracted an enthusiastic audience, generating brisk sales that averaged well over $3,000 per square foot,” Ms. Olshan said in the report.

There were 451 apartments sold on the east side this year, compared to 286 on the west side, 94 in Midtown and 834 downtown, the report said.