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Residential

Market holds is breath after 2018 pricing reset

The Manhattan sales market ended the year on a low note.

Several market reports for the fourth quarter of 2018 show much of the same declining trend that occurred throughout 2018.

According to Halstead, the median sales price for apartments fell five percent to $1.05 million compared to $1.15 million at the same time in 2017. Similarly, there were 2,106 fourth quarter sales for Halstead, which is seven percent less than 2017’s 4Q.

Some numbers did show improvement, with the average sale price for new developments in Manhattan rising to $2.05 million in the fourth quarter. But the Halstead report noted that didn’t reflect the current market since major closings at 520 Park Avenue and 220 Central Park South that boosted the average were signed years ago and didn’t reflect the current market.

As for the median price of Manhattan new developments, 2018’s 4Q hit $1.6 million, which is down from 2017’s 4Q of $2.2 million, according to Halstead’s report.

Corcoran’s 4Q reports show a steeper decline. Their closed sales in Manhattan dropped to just under 3,000, or seven percent lower year-over-year and 15 percent lower quarter over quarter.

Properties are spending longer times on the market, with the average for 2018’s 4Q at 108 days, five percent higher year-over-year and 10 percent higher quarter over quarter.

For Corcoran’s president and CEO Pamela Liebman, it’s a matter of buyers becoming more hesitant.

“Buyers’ concerns included rising mortgage interest rates, tax law reform, volatility in the financial markets, foreign capital restrictions, and political distractions,” Liebman said. “As a consequence, many prospective buyers are choosing to wait on the sidelines until prices adjust to a more accessible level and other market factors calm.”

More of the same trend is seen with Douglas Elliman’s 4Q report which also showed that the number of sales, year over year, declined for the fifth consecutive quarter.

Elliman’s overall sales for 2018 dropped 3.3 percent from 2017 and the inventory increased 11.8 percent. But Steven James, Douglas Elliman’s New York president and CEO, believes the rate of decline was easing up.

“It’s continuing to decline but not at the rate it was,” James said of the market changes. “The first quarter of 2018 was really not good and we knew we were heading into really strong headwinds. But, by the end of July, it started turning around.”

The Douglas Elliman report showed median sales prices for Manhattan properties declining 5.8 percent to $999,000 and the number of sales down 3.3 percent to 2,432, both compared to 2017’s fourth quarter.

Listing inventory rose 11.8 percent to 6,092 and the listing discounts being offered went up to 6.2 percent compared to last year’s 5.2 percent offerings. James said it’s due to a shift in the market where the sellers are losing the control they had and buyers are seeing more power.

“2018 was definitely a reset of the marketplace with sellers being in control and much more control being exerted by the buyers,” James explained. “And that’s a good sign because, for almost 10 to 12 years, the seller has been in the driver’s seat.”

James added that these numbers reflect a pressing situation for sellers who need to adjust their previous expectations in order to sell in the new year.

“If the seller gets the message, pays attention to what’s been selling and will listen to the professionals, then a deal will be made,” James said. “Those who refuse to do that will be left in the dust.”

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