Manhattan Luxury Market Slowdown? Not So Fast, Says Stribling.
Firm released second quarter 2018 report covering sales, contracts, and inventory
NEW YORK, July 3, 2018 /PRNewswire/ -- Stribling & Associates, a leading New York residential brokerage, today releases the second quarter Manhattan Market Report. The report -- the only to cover sales, contracts, and inventory levels across the borough -- noted no new records, but significant changes in the upper end of the market.
"There has been a lot of discussion recently how the market has peaked, and somewhat slowed," said Garrett Derderian, Director of Data & Reporting at Stribling. "While we have seen price adjustments and a slowdown in recorded sales, the lull is more closely tied to a lack of a surge in new development closings, rather than a declining market picture overall. In fact, despite the slowdown in overall sales, the second quarter of 2018 recorded the second highest average sales price on record, only behind the second quarter of 2017."
Even with the average price still hovering near record levels, less closings overall and a slowdown in new development sales resulted in the threshold for the luxury sector, which Stribling defines as the top 10% of the market, declining. "The top 10% of sales in the second quarter started at a price point of $4.4 million, down 10% from $4.9 million one year ago." Derderian stated.
Derderian pointed out one of the most meaningful, and often discussed areas of the market, the ultra-high-priced luxury sector: "If you look at condo contracts signed above $20 million, there was a 67% increase in signings over this time last year. On the cooperative side, we saw five contracts signed above $20 million, compared to zero in 2Q17." While these figures are not representative of the final sale prices, they do indicate that there are still buyers engaging at the high-end, a positive sign for the luxury sector, a market often described as oversaturated and slow-moving.
The increase, Derderian noted, was not just for contracts. "Condo sales above $30 million were up 20% from this time last year, and co-op sales above $20 million were up 33%." While the numbers are encouraging, Derderian did highlight the greatest negotiation power was for those properties priced $20 million and above, where the average discount was 15%, well above the 7% average market-wide.
Looking at the broader market, the number of sales dropped 12%, a result of the slowdown in contracts signed earlier in the year, due to uncertainty surrounding the implementation of the tax policy, geopolitical concerns, and swings in the stock market. While the second quarter started off considerably stronger than the first, the end of June also saw a slowdown in contracts, resulting from political instability around the globe and fears over trade wars.
Across inventory metrics, there was an apparent trend in prices declining. "Generally speaking, there is a sense the market was overheating in terms of prices and sellers are adjusting their expectations. There is also a higher number of properties listed than in past quarters, resulting in somewhat of a buyers' market," said Derderian. However, market conditions vary across each submarket and property type, with some greatly outperforming past quarters well.
Derderian also described the 2% dip in contracts signed as a "minimal change", given how market conditions and pricing have shifted. "Everything will sell at the right price, it is just a matter of pricing to where the market is, rather than where it has been, and knowing there will be some negotiation along the way."
Highlights from Stribling & Associates 2Q Manhattan Market Report:
- Median sales price was $1,125,000, down 6.6% year-over-year
- Average sales price was $2,205,042, down 0.4% year-over-year
- Average price per square foot was $1,496, down 4.5% year-over-year
- Average days on market: 105
- There are 7.1 months of supply, up from 6.2 last year
- 30% of inventory was priced above $3 million
- Market-wide average discount from initial ask was 7%
Recorded Sales:
- There were 2,230 recorded sales to date, a 12% decrease from one year ago
- Co-ops made up the largest share of closings, with 54%
- Condos totaled 44% of all deals
- Condos were the most expensive, with an average PPSF of $1,725
- 1BR units captured 37% of all sales
- 4+BRs, with 6% sales, had the highest average PPSF of $2,104
- Downtown captured the greatest share of closings, with 30%, and was the most expensive market with an average PPSF of $1,665
- Upper West Side condos saw the greatest improvements, with the median up 30% and average up 15%
- Financial District/Battery Park City co-ops saw a median price increase of 10% and average rise of 31%
Contracts Signed:
- Total contracts signed decreased 2% to 3,132
- 1BRs made up 35% of all contracts signed
- All condo bedroom types saw an average PPSF decline
- 3BR condos saw the greatest condo increases, with the average price up 20%
- 3BR co-ops saw the greatest co-op increases, with the median price up 15% and average up 11%
- FiDi/BPC saw the least number of contracts, at 3%
- Downtown averaged the highest PPSF, $1,822
- Down had the largest apartments at 1,574 square feet
- Upper West Side condos were the only submarket to record price improvements across all metrics
- Upper East Side co-ops saw a median price improvement of 10% and average price increase of 17%
Inventory:
- There were 6,994 units on the market at the end of 2Q18
- Condo units made up the largest share of inventory, with 51%
- Condo units had an average PPSF of $2,093
- Co-op units were the most affordable, with an average PPSF of $1,300
- 1BRs made up 30% of inventory
- The $1-3M bracket totaled 38% of inventory
- Properties priced under $500K and between $10-20M both captured 6% inventory share
- Downtown measured 30% of all inventory
- All submarket prices decreased for condos
- Upper East Side co-ops totaled 30% of the co-op market
- Upper Manhattan co-ops saw a median price increase of 20% and average price increase of 8%
About Stribling & Associates
Stribling & Associates, Ltd. is a premier residential real estate firm with over 300 agents throughout five locations across Manhattan, Brooklyn, and Long Island City. As one of the most renowned brokerages in New York, Stribling uses its respected expertise in the current market to provide individualized services to both buyer and sellers. Stribling agents specialize in the sale of luxury townhouses and cooperative and condominium apartments. The company's philosophy is based on professional, personalized services coupled with exceptional knowledge of key residential market trends. Stribling Private Brokerage specializes in the discreet marketing of properties over $5 million and commands a prominent market share in that sector of Manhattan residential real estate. Through strategic partnerships with Miami's Cervera and international estate services firm Savills, Stribling's global reach extends to more than 700 offices worldwide.
Press Contact:
Ashley Murphy, Director of Public Relations
[email protected]
646-675-5068
SOURCE Stribling & Associates
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