A report from Bisnow on New York. "Developers in New York City with pricey luxury apartments to sell were facing an uphill battle in 2020, faced with a supply glut and waning demand. The hill has only gotten steeper the last two months. Buying activity has dropped by around 70% since mid-March, Corcoran Group CEO Pam Liebman told Bisnow. Sponsors who were already cutting deals and dangling incentives to buyers will be under even more pressure, particularly those with hefty loans coming due. 'New York City is the dream, but right now it is in nightmare conditions. We just have to wait for it to pass,' said Olshan Realty President Donna Olshan."

"Compass broker Vickey Barron predicts a jump in 'rent-to-own' style offers at many luxury developments as economic conditions become more strained. '[Developers] are going to have pressure from their lenders,' she said, adding that some will fare better than others. 'None of them are worried because they always tell themselves it is all going to be fine. That’s how they get out of bed each day … [but] money has to come in somewhere.'"

"While sales volume increased in the first quarter of 2020, it was largely because sellers had begun to reduce their prices, according to appraisal firm Miller Samuel. The number of closed sales in the borough was up 14% year-over-year in Q1, but the pandemic only set in in the last few weeks of March and has not yet shown up in the sales volume figures. The median sale price was just over $1M, the third straight quarter of decline."

"Miller Samuel CEO Jonathan Miller estimates it will take more than six-and-a-half years years to sell all of the new development inventory that is available in the city, even without taking the pandemic into account. At least 2,000 new condominium units will become available by the end of this year, most of which will be priced at the higher end of the market, according to Miller Samuel data."

"'He noted that the low number of transactions make it impossible to really figure out price implications. 'We are in the period of price discovery,' he said. 'Logic says there is an impact on pricing, but there is literally no empirical evidence yet.'"

"Corcoran CEO Pam Liebman said there are buyers who are expecting a 'COVID discount' and making lowball offers. 'Buyers are being very aggressive, they are coming in and bidding anywhere from 10 to 30% below the ask, claiming this is what they are calling a ‘COVID discount,' she said. 'Sellers are saying, pricing was already down, and it’s certainly not down another 20 or 30%.'"

"Liebman, whose company is marketing Hudson Yards’ luxury residential offerings, where a penthouse at 35 Hudson Yards is asking $59M, said not all developers are under pressure. 'Unless they have debt breathing down their neck, which eventually may happen to some of them, they don’t just turn around and say, ‘fine, give it away,' she said. 'Developers are eternal optimists and many of them just [think] things will get better. I’ve had many people just say, ‘I’ll just wait.’ But nobody knows if waiting is going to work out well.'"

From Habitat. "Don’t stick a fork in the Manhattan co-op and condo market just yet. While listings and closings have plunged since the coronavirus pandemic led to stay-at-home orders, sellers are beginning to tiptoe back and put their apartments on the Manhattan sales market, Brick Underground reports."

"For the last week of April, the number of new listings rose 39 percent from the prior week, marking the highest weekly level since New York’s shutdown order went into effect, according to UrbanDigs' weekly report on total new listings, contracts signed, and listings being taken off the market for Manhattan."

"The news was not altogether rosy. For the week April 27th through May 3rd, contracts signed were down 10 percent and listings off market were up 63 percent. 'Buyers remain in wait and see mode, with only 40 contracts during the week, suggesting that until the stay-at-home order is lifted, the market will remain thinly traded' with wide gaps between bidding and asking prices, says Noah Rosenblatt, chief executive at UrbanDigs."

"Typically, during the spring selling season, there are weekly increases in both new listings and contracts signed, with a weekly decrease in listings being taken off the market, Rosenblatt says, adding that 'with the market on pause, contracts signed are decreasing while both new listings and off market listings are increasing on a week-to-week basis.'"

From Crain's New York Business. "Full-fledged property tax relief is unlikely to come to New York City landlords in July, according to the city's Office of Management and Budget. A proposal in the City Council that aims to delay property-tax payments for small landlords and cover the loss with prepayments from large ones does not add up financially, Francesco Brindisi, OMB’s deputy director for city revenues, said Wednesday at a budget hearing."

"But the city is already facing a massive budget crunch: It closed an $8.7 billion gap, largely created by tax revenue shortfalls, in its recent budget. But the likelihood of further losses is high. Landlords, of course, are facing their own shortfalls. The Covid-19 pandemic has rendered residential and commercial tenants increasingly unable to cover monthly payments, making it harder for property owners to cover bills they owe, like July property tax."

"Right now the OMB has laid aside $180 million to cover property-tax delinquencies it expects to come in July, Brindisi said. That’s assuming 2% of taxes are delinquent, he said. The true number could be higher. Crain’s spoke to a handful of small landlords across the metropolitan area who said that with commercial rent shortfalls and residential rent an open question, they’re not confident they can cover their property-tax payment this summer."

"'My commercial tenants, I’ve received zero for the month of May, and I only received 30% in April,' said Jan Lee, who owns a 28-unit rent-stabilized building in Chinatown that holds three commercial rents. 'The commercial is what we use to subsidize the building, as the majority of my tenants pay a 10th of the market rate for comparable apartments.'"

"The difference in the drop-off between residential rents and commercial rents has more to do with government mandates and their effect on the broader economy. Although hundreds of thousands of New Yorkers have lost their job since the coronavirus shutdown measures were imposed by the state in March, many of those residents have received a Cares Act check or are receiving unemployment insurance. Others were furloughed or paid through Paycheck Protection Program provisions. Millions of other New Yorkers are now working from home and are thus able to make some, if not all, of their rent."

"But commercial tenants, like retail stores and other small businesses, not only have been ordered to shutter their doors, many were already struggling to pay high rents. Many such businesses—including restaurants—simply do not have the foot traffic or consumer spending patterns to justify keeping their doors open. 'Commercial’s still a disaster,' said Jay Martin, executive director at the Community Housing Improvement Program. 'That is dragging down multifamily owners who have commercial on the bottom floor and residential on the top floors."

"'This is a big problem for a lot of owners not collecting that commercial rent,' said Frank Ricci, director of government affairs at the Rent Stabilization Association. 'A lot of that commercial space winds up subsiding the rent-regulated space above.'"

From Brownstoner. "Another week, another look back at four of our featured listings from six months ago. How did they fare? Starting off in Bay Ridge, an early 20th century barrel-fronted brick-and-limestone row house has well-preserved woodwork, parquet, crown molding, a coffered dining room, and the original Arts and Crafts style staircase. This former Open House Pick is currently off the market."

"This house at the corner of Fenimore Street and Bedford Avenue in Prospect Lefferts Gardens was designed by Slee & Bryson in 1916. It has a large, impressive living room with parquet floors and a brick fireplace (probably gas burning) bookended by built-in shelves. This former House of the Day sold in December for $1.525 million, which was $125,000 under ask."

"A classic late Victorian limestone in the Park Slope Historic District with decorative door surrounds with ornate toppers, nine ornate wood mantels with carving and original tile, mahogany wainscoting, an intact butler’s pantry, and an elaborate staircase. This former House of the Day is still available with a new broker for $3.6 million, a price cut of $300,000."