Manhattan Home Sales Prices Drop During Pandemic: Study

MANHATTAN, NY — New York City is still in the thick of dealing with the coronavirus pandemic, but early studies of the virus' effect on the Manhattan real estate markets show a decrease in home prices, according to an analysis conducted by real estate listing site UrbanDigs.

Median home sales in Manhattan have decreased by about 15 percent following the coronavirus outbreak in New York City, according to the UrbanDigs study. The median sales price in the borough was $1.12 million prior to the outbreak and just $960,000 since the outbreak, according to the study. Listing discounts also increased about 16 percent following the outbreak.

Researchers warned that the true, long-term effects of the coronavirus crisis on the city's real estate markets is likely still unclear. New York City was just cleared to begin phase two of four of its economic recovery Monday, which will allow real estate offices to reopen and resume in-person showings. Showings were outlawed in March by New York Gov. Andrew Cuomo's "NY on PAUSE" executive order, which shut down schools and non-essential businesses to curb the spread of the coronavirus.

Shutting down real estate services resulted in market volatility, which makes it harder to analyze market trends, according to the UrbanDigs study.

"With such an idiosyncratic nature, pandemic pricing can not yet be viewed with broad strokes. Rather, sales that have occurred should be viewed individually," the study reads.

Despite the difficulty in predicting the effects the virus may have on the market, there are some signs that prices could go down even further, according to the study. The real estate market is reopening in the summer, a historically slow time for real estate, could result in fewer home sales. High demand in New York City suburbs could also mean less people are searching in the city, which could result in supply outpacing demand for Manhattan homes, according to the study. Sellers may also become more desperate and willing to accept "low ball" offers the longer their homes remain on the market, the UrbanDigs study reads.

"Until more stable patterns of daily life and apartment prices emerge, in all likelihood, the [phase two] resumption of contract activity will not continue at an accelerated pace, and the imbalance between risk-averse buyers and a growing number of sellers in an inventory-laden market will suppress prices in the near to medium term," the study reads.