Amid Broader Slump, Buyers Seeking Affordability Face Toughest Market
Prices of Manhattan's least expensive homes increased by a staggering 8.9% in February
NEW YORK, Feb. 19, 2020 /PRNewswire/ -- The sluggish Manhattan sales market persisted in January, but one segment of the market is heating up. In the bottom 20% of the Manhattan market, home prices bucked the wider trend, rising 8.9% to $480,438 according to the StreetEasy Price Indexi.
The increase in prices at the low end of the market signals heightened demand for affordable options in Manhattan. Unfortunately for buyers with lower budgets, this market segment offers the fewest number of homes to choose from. Even with a slight 1.6% uptick in inventory, the lowest price tier had 1,005 homes on the market – 353 fewer than the next segment up, where the StreetEasy Price Index was $716,604 in January. The luxury tier, or the top 20% of the market, had 3,366 homes on the market — a 9.5% increase from January 2019.
While prices fell in the top four quintiles and nearly all Manhattan submarkets, they remained steady in Upper Manhattanii at $636,869. As the cheapest submarket in the borough, which includes neighborhoods such as Inwood and Washington Heights, buyers with smaller budgets will continue to have the best luck looking there while it remains relatively affordable. The number of homes for sale also increased by 6.5% in the area, a welcome sign for those buyers seeking affordability.
"Even as the city experiences a slowdown in the sales market, the cost of entry to homeownership continues to move further out of reach for many potential buyers," says StreetEasy Economist Nancy Wu. "While demand for affordable housing options is consistently strong, it's likely that first-time buyers and those with lower budgets will feel the competition even more acutely this upcoming home shopping season."
See below for additional sales and rental market trends across Manhattan, Brooklyn and Queens.
January 2020 Key Findings — Manhattan
The Manhattan sales market kicked off the year where it left off, with prices down 2.8% to $1,089,060. This was the smallest annual decline in prices since October 2018. Meanwhile, Manhattan homes lingered on the market for nearly four months (119 days) — a length of time not seen since 2012. As home-shopping season approaches, buyers should be ready to negotiate appropriately.
January 2020 Key Findings — Brooklyn
All signs point to a more competitive Brooklyn sales market in 2020. Brooklyn was the only borough analyzed where sales prices rose — up 1.4% to $707,436. This was the first increase in the borough since late 2018, and a welcome sign for Brooklyn sellers trying to strike a deal. As prices rose, discounts simultaneously became harder to find. One in 10 Brooklyn homes for sale had a price cut in January, a decline of 1.9 percentage points from a year prior.
January 2020 Key Findings — Queens
Mostly unaffected until now, Queens is starting to feel the broader slowdown in the sales market. Prices rose steadily in the borough from 2012 to 2019 as buyers looked here for relative affordability, but price growth has significantly slowed in the past several months. In January, the StreetEasy Queens Price Index stagnated at $507,322. Queens also had the smallest share of price cuts of all boroughs analyzed with 9.6% of homes getting a discount in January.
The complete StreetEasy Market Reportsiii for Manhattan, Brooklyn and Queens, with additional neighborhood data and graphics, can be viewed here. Definitions of StreetEasy's metrics and monthly data from each report can be explored and downloaded via the StreetEasy Data Dashboard.
About StreetEasy
StreetEasy is New York City's leading local real estate marketplace on mobile and the web, providing accurate and comprehensive for-sale and for-rent listings from hundreds of real estate brokerages throughout New York City and the NYC metropolitan area. StreetEasy adds layers of proprietary data and useful search tools to help home shoppers and real estate professionals navigate the complex real estate markets within the five boroughs of New York City, as well as northern New Jersey.
Launched in 2006, StreetEasy is based in the Flatiron neighborhood of Manhattan. StreetEasy is owned and operated by Zillow Group (NASDAQ: Z and ZG).
StreetEasy is a registered trademark of Zillow, Inc.
i The StreetEasy Price Indices track changes in resale prices of condo, co-op, and townhouse units. Each index uses a repeat-sales method of comparing the sales prices of the same properties since January 1995 in Manhattan and January 2007 in Brooklyn and Queens. Given this methodology, each index accurately captures the change in home prices by controlling for the varying composition of homes sold in a given month. Levels of the StreetEasy Price Indices reflect average values of homes on the market. Data on the sale of homes is sourced from the New York City Department of Finance. Full methodology here.
ii The Upper Manhattan submarket includes Hamilton Heights, Washington Heights, Inwood, West Harlem, Central Harlem, East Harlem, Manhattanville and Marble Hill.
iii The StreetEasy Market Reports are a monthly overview of the Manhattan, Brooklyn and Queens sales and rental markets. Every three months, a quarterly analysis is published. The report data is aggregated from public recorded sales and listings data from real estate brokerages that provide comprehensive coverage of Manhattan, Brooklyn and Queens, with more than a decade of history for most metrics. The reports are compiled by the StreetEasy Research team. For more information, visit https://streeteasy.com/blog/research/market-reports. StreetEasy tracks data for all five boroughs within New York City, but currently only produces reports for Manhattan, Brooklyn and Queens.
SOURCE StreetEasy
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