New York City’s luxury real estate struggled in the first half of 2018 as transactions valued at $5 million and above plummeted 31% compared to the same time in 2017, according to a report Monday from brokerage Stribling & Associates.
The fall was driven by the high-end condominium market—currently facing oversupply woes—which, logging 303 sales, saw a 39% decrease in transactions.
“This was the first time in the past six years the condo market saw a reduction in sales,” said Garrett Derderian, director of data and reporting at Stribling & Associates, in the report.
Despite logging far fewer sales than the condo market, the luxury co-op market saw a 10% increase in sales, totaling 103, in the first six months of the year, after recording yearly sales declines in both 2016 and 2017, the report said.
The uptick in co-op sales, which had seen considerably less demand in recent years, is due to their value compared to high-end condos.
“Over the past several years, buyers’ predilections shifted towards downtown new development condos. As a result, uptown co-op prices became considerably softer since sellers have been adjusting expectations,” Mr. Derderian said in the report.
“With a flood of costly new construction condos on the market, there is a perception those prices are overinflated,” he continued. “Co-ops, which have already adjusted their prices, have become more attractive and oftentimes offer more space for the same dollar amount.”
For co-op buyers, the Upper East Side was the favored market as 54% of all co-op sales were recorded in the neighborhood, and the median price grew 16% to $7.52 million. The Upper West Side followed, home to 24% of New York City’s high-end co-op sales.
Both property types measured yearly price increases. For condos, the median price increased 3% to $7.53 million. Meanwhile, co-ops saw a median price increase of 4% to $7 million, the report said.