Manhattan home prices fell in the third quarter, while sales rose, according to several market reports released Tuesday by some of New York’s biggest brokerages.
New developments and co-ops are leading the sales surge, though prices for the former have dropped, according to the reports, likely because there were fewer closings at high-priced new buildings, like 432 Park, compared to last year.
In the luxury market, both Corcoran and Douglas Elliman found that the threshold for luxury properties has dropped to just over $4 million. The market has been particularly impacted by oversupply and aspirational pricing, Corcoran said.
Though the reports cover the same market, their results vary.
One reason for discrepancies could be the many sources researches have to use, said Jonathan Miller, CEO of real estate appraisal firm Miller Samuel and author of the Douglas Elliman report.
“I can’t speak to specific methodology on other reports,” Mr. Miller said. But in his experience, he said, New York public records data is, “very raw and primitive … You have to stitch it together from multiple sources.”
It’s also likely that each brokerage will have access to its own raw closing data, Mr. Miller said, which may not have hit public records yet and the brokerages don’t have have access to.
“There’s a lot of hand holding that goes on with the data that makes it so challenging,” he said. “But that also makes it fun.”
The average sales price and average price-per-square-foot saw a decline for the first time in almost three years during the quarter, according to Corcoran’s report. Average sale prices dipped 3% year-over-year to $1.97 million and the average price-per-square-foot dropped 5% to $1,741.
Though prices were down, Manhattan sales were up 3% compared to the same period in 2016, said the report, marking a year-on-year increase for the second quarter in a row.
Major drivers of the sales increase were resale co-op and new development closings.
Closings of resale co-ops rose by 5% year-on-year to 2,098, and pricing was up for nearly all price metrics compared to last year. The median price increased 4% year-over-year to $835,000; median price-per-square-foot was up 1% to $1,046; average price increased 12% from last year to $1.410 million; though average price-per-square-foot was up less than 1% to $1,271.
New development closings, meanwhile, rose 26% year-on-year to nearly 600, said the report, but prices dropped significantly year-over-year. The median price fell 35% to $2.225 million and average price fell 31% to $3.611 million. These decreases occurred for a few reasons, according to the report, primarily, high priced new developments like 432 Park, 30 Park Place, and 56 Leonard had fewer closings this year, compared to last.
The luxury market, which Corcoran defines as the top 10% of closed sales in terms of price, saw its threshold drop for the first time since first quarter 2013 to $4.10 million, from $4.276 million last year.
Pricing in the luxury market, the report said, has been particularly impacted by oversupply and aspirational pricing, as 52% of luxury sales sold below ask at an average discount of 8%. The median price for a luxury sale this quarter was $6.399 million, down 14% from last year. The average price for a luxury sale, at $8.003 million, was down nearly 20% from last year.
Manhattan’s average sales prices slipped 1.3% to $2.002 million year-to-year, and the average price-per-square-foot declined 11.5% to $1,678, according to Douglas Elliman’s quarterly report. Though they found the median sales price increased 9.3% to $1.17 million, it fell short of the prior quarter’s records.
Sales jumped this quarter 13% to a total of 3,369, said the report.
Performance from co-ops was again strong, with sales prices setting a record high, rising 8.3% to $850,000. Price per square foot rose 8.5% to $1,335, average sales price rose 10.8% to $1.427 million and the number of sales increased 13.5% to 1,876. Listing inventory. though slipped, 4.2% to 2,670.
New development sales surged 69.5% to 461, but prices declined all around, the report said. The median sales price decreased 23% to $2.797 million; average sales price declined 26.8% to $4.256 million; and price per square foot fell 18.3% to $2,482.
Luxury inventory—defined by Douglas Elliman as the top 10% of all co-op and condo sales—declined 14.4% to 1,152, as overpriced listings continued to drop out, the report found. The luxury threshold dropped 3.2% to $4.241 million and the median sales price was $6.423 million, down 4.8%. Average sales price decreased 8.3% to $8.091 million.
Brown Harris Stevens and Halstead
Findings from Brown Harris Stevens and Halstead—both owned by Terra Holdings, LLC— were the same.
Compared to a year ago, there were 10% more closings this quarter, said the reports, with a total of 2,808 sales. A figure that Hall F. Willkie, president of Brown Harris Stevens, said was likely primarily due to co-ops sales. Co-ops “are a much bigger share of the market,” Mr. Willkie told Mansion Global.
Though similar to findings reported above, prices dropped in some cases. The average apartment sales prices dipped below $2 million for the first time in almost two years to $1.961 million, the reports said, 4% less than a year ago, pointing to a decline in luxury new-development closings as a cause.
“This time last year a lot of big condos like 432 Park closed,” Mr. Willkie said, adding that such closings can skew figures.
But the median sales price of $1.174 million was 12% higher than 2016’s third quarter, and the average resale price was 6% higher, at $1.619 million.
New development sales over $10 million fell 42% from a year ago and new development average sales prices were down 24% to $3.377 million. However, the average price per square foot saw a comparatively small drop, down 7% from last year to $2,050, according to the report.
Lower top-end prices, said Mr. Willkie, are signaling an end to aspirational pricing. “That is no longer part of our culture,” he said. “This is not a market for aspirational pricing.”
Unlike many of the findings in the other reports released Thursday, Stribling’s reported a 9% decrease in sales year-over-year, with 2,740 recorded. Likewise, the number of total contracts signed decreased 14% to 2,090.
The median sales price, according to Stribling, was $1.25 million, up slightly from last year’s $1.22 million. The average sales price, meanwhile, was $2.167 million, an increase from $2.078 million. Though an increase compared to third quarter 2016, both saw declines compared to last quarter, said the report.
“What we found, for the first time, was closings under $500,000 and above $5 million had equal market share, both at 10%,” said Garrett Derderian, director of data and reporting at Stribling. “These high-priced deals, fueled almost entirely by new development, are expected to increase market share in the near-term. Properties selling for under $500,000 are almost exclusively co-op resales.”
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