By Dan Orlando
While the opening quarter of a given year is typically expected to be mild compared to the close of its predecessor, New York’s residential markets saw a bearish first quarter which bogged down a climb that spanned across more than two years.
After 10 consecutive quarters of growth, the overall median price per square foot in Manhattan appears to have reached its peak at the close of 2014, according to Compass’ Q1 market analysis.
The final act of 2014 notched a record-breaking $1,445 median price psf, but 2015’s opening quarter sustained a three percent decrease in this area, reports Compass.
This quarter-over-quarter decline is indicative of stabilizing prices rather than a rapid plummet in value, according to Compass.
Total transaction volume of all closed sales this quarter fell by roughly 16.7 percent, or $900 million, from last quarter and 16.7 percent, or $1.0 billion, from the same time last year to an approximate level of $4.5 billion.
This significant decrease comes as a direct result of the decline in closed sales this quarter, which dropped 10.4 percent to a current level of 2,590 closings.
“The first quarter tends to be typically slower than Q4 activity,” said Compass’ senior advisor of data & market reports, Sofia Song. “Q2 activity is typically much more active.
“I think prices have remained stable, but I think the increase in inventory- while it is a good sign- has been driven primarily by new development product,” she added.
“When you have a lot of new development product, there are certain segments of the market that are being underserved and that’s really the entry level market and the niche market.”
Despite the temporary lapse, Song feels there is little to indicate a serious problem on the horizon.
“There’s a high level of activity and it’s relatively healthy given past quarters, especially with what’s going on outside of the states,” she said.
In its Q1 analysis, Warburg Realty labeled the most active part of the market as the $2 million and under sector.
In Manhattan, in Brooklyn, in Long Island City, these are the co-op and condo units which often still bring multiple offers and sell at five or 10 percent above their initial ask, according the brokerage.
In the co-op world of the Upper East Side, larger units, especially those needing linger on the market, often for six months, nine months, even a year or more.
Warburg found that properly priced properties in areas where inventory is still at a premium continued to move quickly.
Corcoran’s Quarter 1 report paints a much more optimistic picture for Manhattan at least.
According to Corcoran president and CEO Pamela Liebman, the opening of 2015 saw market-wide closed sales reach a six-year high for the first quarter, fueled by buyer competition and upward trending prices.
Corcoran found that the median prices of all residential properties in the borough rose by six percent compared to this time last year to land at $955,000. Average prices climbed by two percent to eclipse $1.7 million. The average price psf rose by five percent to finish at $1,602.
Liebman pointed out that although inventory supply continued to be tight and remained at almost the same level when compared to a year ago-decreasing a minor 1 percent to 4, 973 units- relief is on the way.
A projected 12,000 plus new development units launching this year and next will ease Manhattan inventory levels going forward, according to Liebman.