Photo: Robert Clark
In response to a general concern over the direction of the national economy, the Manhattan housing market saw sales dial back to the slowest pace since 2012 in the fourth quarter of 2018, according to a new report by New York brokerage Stribling and Associates.
“As with the first three quarters of 2018, a level of uncertainty in the market impacted sales during the fourth quarter. The momentum has shifted and many buyers will only engage if they feel they are getting a ‘good deal’ relative to the market,” Garrett Derderian, director of data and reporting at Stribling and Associates, tells Livabl.
In the fourth quarter of 2018 — the weakest performing fourth quarter across all metrics since 2012 — total sales were down 10 percent year-over-year, and 25 percent below a fourth-quarter high recorded in 2015.
At 1,906, fourth quarter sales hit a post-crash low by falling below the previous low set in 2011.
“We are not experiencing the brisk aspirational transactions of years past — everything is moving a little bit slower, buyers and sellers are taking a little bit longer to negotiate,” reads the report.
Properties spent the greatest average number of days on market in six years. The average Manhattan home spent 152 days on the market, an increase of 20 percent from the previous year.
Manhattan inventory was up 13 percent year-over-year, topping out at 7,000 units. Derderian noted that there is “certainly an oversupply” of units on the Manhattan market at the moment as the “real” inventory figure is likely much higher, but many sellers take their properties off the market for the holidays only to relist early in the new year.
Seller discounts continued to rise across all property types. The typical discount was 7.9 percent off the asking price in the fourth quarter of 2018, up from 6.4 percent in the previous quarter.
At 10 percent, the Financial District saw the greatest cuts due to an oversaturation of new construction condos flooding the market. Upper Manhattan saw the smallest discounts at 5 percent.
And with an abundance of available units and an overall cooling taking place, Derderian says the Manhattan housing market is “ripe with opportunity” for homebuyers.
“The Manhattan market is taking a breather. Prices have escalated significantly since 2012, primarily driven by new developments. Although the last time we saw so few sales in a fourth quarter was 2011, the average sale price was 42 percent higher in 2018 compared to 2011,” Derderian tells Livabl.
Looking ahead, Derderian says that buyers should expect to see a continuation of the second half of 2018 in the new year.
“Deals will take longer to complete, as sellers adjust price expectations. We do not foresee an impending ‘cliff,’ but rather a gradual slowdown in appreciation, if not some depreciation, until the market recalibrates,” says Derderian.
Meantime, one thing Derderian doesn’t attribute to the Manhattan sales slowdown is rising interest rates.
“While they are rising, historically, they are still near record lows. In fact, some buyers entered the market to lock in a rate, as they are forecast to continue to rise,” he says.