New York luxury real estate could be a bargain in 2021

Judging by the last quarter of 2020, New York's luxury real estate market should enter 2021 with confidence.

Sales of homes that cost more than $4 million were a little above those of the same three months in 2019, says Donna Olshan, president of luxury real estate broker Olshan Realty. "Now, some of that has to do with demand that was never met, because we lost the most important quarter-the spring," she says.

But the tick upward is also, she says, "because most of these sales are [to] New Yorkers, or from the New York metro area, betting on the home team. They are getting covid-19 discounts, they're looking at the long-term prospects of New York, and they're buying."

As the city looks toward next year, the known unknowns loom large. The timeline of the vaccine rollouts is opaque. A proposed pied-à-terre tax, dreaded by everyone in the industry, remains possible. And the economic futures of the city, the country, and the world are up in the air.

But the city's luxury residential market has enough momentum to make experts feel comfortable making some conditional predictions.

- Suburb Mania Is Over

"The way I think of the suburbs is that they had their moment," says Jonathan Miller, president and chief executive officer of Miller Samuel appraisers, who adds: "The 'fleeing the city' narrative is already extremely dated."

While suburban sales are still up year over year, "it's just no longer a rocket ship of growth," he says. "And the jump in pricing, largely caused by what I would call panic buying-where people left the city out of fear-that was front end-loaded, and I don't see a compelling reason why that [price growth] can be sustainable."

John Walkup, COO and co-founder of UrbanDigs, agrees. He says the move to the suburbs this year was really part of an older...