The calendar may say 2019 but Manhattan owners may feel like its 2015 all over again. Sellers in particular are likely experiencing a sense of déjà vu because the median sales price for co-ops and condos has fallen below the $1 million level for the first time in three years.
The Douglas Elliman report for Manhattan sales in the fourth quarter of 2018 found that the median sales price declined 5.8 percent to $999,000, slipping below the braggy threshold.
Jonathan Miller, president of Miller Samuel and author of the report, says the median sales price drop is a sign “the market is normalizing,” after the past several years, which saw a large number of contracts signed for new development luxury condos skewing averages.
The number of sales in Manhattan declined year over year for the fifth consecutive quarter, with a 14.2 percent decline in sales, but there are signs the pace is slowing, with the size of the decline continuing to ease.
“Now we’re getting to more normal, sustainable conditions,” Miller says.
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The report showed that resale inventory continues to pile up and the number of transactions involving a bidding war hit a six-year low.
While the market has seen a reset, it still has a ways to go, Miller says. “A year from now, the number of sales may be fewer, and while it won’t be significantly weaker, it will still be weaker.” Pricing may drop further as well, he said.
He contrasted current sentiment to a year ago, when New Yorkers were grappling with the new federal tax law, which caps your state and local tax deductions, and lowers the debt limit for new mortgages, punishing high tax areas like New York City and making buyers feel insecure about their purchasing power.
“Now as we move forward to April 15, when checks are due, we’ll have some more clarity," he says. Investors are also confident that the Fed is going to pause interest rate hikes, for now, according to the Wall Street Journal, which is good news for borrowers. “The uncertainty doesn’t change a whole lot, but it’s not like last year. We’re in a better place, but we’re not done,” Miller says.
Market reports often have contradictions, and in this one, there’s a median sales price decrease at the same time as an average price increase for Manhattan apartments. Miller attributes the average price increase to sales of larger, luxury apartments.
“It’s not that prices are rising,” he says. “There’s been an uptick in higher-end sales and larger-sized apartments.”
In market reports from real estate firms:
Brown Harris Stevens’ report noted that resales of apartments took 27 percent longer to sell, as opposed to a year ago.
Stribling & Associates say that Financial District/Battery Park City condos had the greatest discounts, averaging 10 percent, while Upper East Side co-ops experienced the healthiest price increase.
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