Photo: Robert Clark
Manhattan home prices may have been down in the first quarter but there were also fewer buyers in the market.
Quarterly Manhattan home sales fell to the lowest level in over six years and posted the largest annual decline in nearly a decade, according to a report released today by New York brokerage Douglas Elliman.
Over the last year, the average price of a Manhattan apartment, including co-ops and condos, declined 8.1 percent to $1.9 million in the first quarter. At the same time, the average price per square foot fell 18.5 percent to $1,697.
There were 4.4 percent more Manhattan homes for sale in the first quarter compared to the same time last year, but far fewer sales.
The number of sales dropped a whopping 24.6 percent year-over-year, with the market share of bidding wars falling to a five-year low.
“About one-third of the decline was attributable to the expiration of the legacy contract pipeline — sales that went to contract several years ago that closed recently upon completion of construction,” Jonathan Miller, CEO of the appraisal firm Miller Samuel, and the author of the report, tells BuzzBuzzNews.
These contracts represented an earlier wave of new development which was skewed heavily towards super luxury. And now with those legacy sales mostly closed, overall prices declined and overstated the decline in sales, according to Miller.
The uncertainty about how the recent GOP tax code overhaul will impact Americans accounts for the remaining two-thirds.
“Buyers and sellers are now more challenged by ‘uncertainty’ and therefore there is a lack of urgency to take action. I see more of this hesitation in 2018 as buyers and sellers rebalance themselves to what values are,” says Miller.
The market share of all-cash sales reached a four-year high in the first quarter. Data tracking for this metric started four years ago.
Also, bidding war activity was well below the decade average in the first quarter, due to “more inventory and a lower sense of urgency to move forward on deals,” Miller says.
Manhattan homes were on the market an average of 107 days, selling one day quicker compared to last year.
Meantime, new construction condo average prices declined 14.1 percent annually to $1 million in the first quarter, with the average price per square foot falling 19.9 percent from last year to $2,409.
The number of new condo sales dropped 54 percent from last year in the first quarter — also attributed to “legacy” contracts. Listing inventory was up 5.1 percent year-over-year.
The first quarter was also challenging for the Manhattan luxury submarket, which covers apartments priced at $4 million and up.
The average price of a “luxury” Manhattan apartment fell 15.1 percent year-over-year to $7.9 million. Sales fell 24.1 percent annually and listing inventory grew by 15.4 percent from last year. Luxury inventory rose at twice the rate of the overall market in the first quarter.
The market share of luxury resales was at its highest level in two and a half years in the first quarter.
Looking ahead to the second quarter, Miller is cautious.
“Probably less of a year-over-year decline in sales, but the market will likely remain in this ‘price discovery’ mode,” he tells BuzzBuzzNews.
Click here to read the entire report.