Manhattan’s luxury housing prices have fallen for nine straight months, the result of a glut of high-end units in the market, according to the latest StreetEasy market report released Friday.
The median luxury resale price fell 6.6%, to $3.114 million in the fourth quarter of 2016 compared to a year earlier, according to StreetEasy. High-end price growth has been negative since the second quarter of 2016 and in decline for two-and-a-half years.
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StreetEasy defines the luxury market at the top 20% of the market.
In the years immediately following the recession, Manhattan’s rapidly recovering luxury market gave a boost to the borough’s median sales price, said StreetEasy economist Krishna Rao.
"Now, stagnating price growth is spreading from the top end of the market to the middle, while demand for lower-priced homes increases," Mr. Rao said in the report.
"The end of 2016 foreshadowed what we expect to see in 2017—increased competition in relatively affordable areas like Upper Manhattan, and even more price cuts in the luxury sector as Manhattan’s market finds equilibrium," Mr. Rao said.
Luxury homes in Manhattan also sat on the market longer, in the final quarter of 2016. Days on market rose to 98 from 85.5 a year earlier.
There is some indication that sellers are adjusting by getting prices under control. Fewer high-end sales received discounts in the fourth quarter, down to 13.3% of sales from 14.4% a year ago.
Across all price points, the median price fell in the fourth quarter in several neighborhoods anchored by luxury real estate. Median resale price fell 2.1% on the Upper East Side and 0.3% in Downtown.
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In North Brooklyn, which includes trendy neighborhoods like Williamsburg and Greenpoint, the median resale price fell 2.9%.
"That cool-factor could be reaching a peak," Mr. Rao said. "Price growth is slowing, with prices even falling in North Brooklyn last quarter. This could be due to L train fears, or simply buyer fatigue in the face of Williamsburg’s luxury prices." The L train, the main form of transportation in that area of Brooklyn is set to shut down for approximately 18 months for repairs in 2019.
Meanwhile, most areas with lower-priced real estate saw some dramatic price growth at the end of 2016. For example, Upper Manhattan saw the median price increase 8.8%, to $658,332, in the fourth quarter.