Manhattan residential sales contracts fell 31% in August while deals in the suburbs and Florida surged, suggesting that the flight from New York City continued through the summer.
There were 585 sales contracts for condos and co-ops in Manhattan in August, compared with 848 a year ago, according to a report from Douglas Elliman and Miller Samuel. The high end is suffering the biggest drop — contracts for condos and co-ops price at more than $4 million fell 44%.
The drop is a slight improvement from July, when contracts declined 57%. Yet the August boom in real estate deals in suburban markets around New York and in Florida shows real estate dollars (and most likely residents) continue to flow out of Manhattan.
The inventory of unsold apartments in Manhattan is piling up fast. There were more than 2,400 new listings in Manhattan in August — more than four times the number of sales contracts.
"The sales activity in Manhattan is not doing what it's supposed to do," said Jonathan Miller, CEO of Miller Samuel, an appraisal and research firm. "The supply is growing faster than demand and that's the opposite of what we're seeing in suburban markets."
There are also signs that the strength outside of Manhattan is being fueled by wealthier buyers, who are critical to Manhattan's tax base and real estate market. Sales contracts in the Hamptons more than doubled in August compared with last year, with 47 contracts signed above $4 million.
Westchester County saw its strongest growth in homes priced at more than $1 million, which more than doubled over last year. And in Greenwich, Connecticut, the number of deals over $4 million increased six-fold compared with last year.
In Florida, the story is similar, with seven-figure homes seeing some of the strongest activity compared with last year. In Palm Beach County sales of seven-figure homes more than tripled compared with 2019. Miller said the flight of the New York wealthy to Florida after the change in state and local tax deductions in 2018 has only accelerated during the coronavirus pandemic.
"We're seeing a much larger increase in demand in Florida by people coming from the Northeast," he said. "This now looks structural rather than cyclical."