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Luxury Home Prices in Manhattan Continued to Slide in July

Values in Brooklyn are still up, but pace of growth is slowest in over five years

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The median resale price in the Manhattan's luxury residential market decreased 1.6% year-over-year in July, to $3.2 million, according to a new report.

Tetra Images/Getty Images
The median resale price in the Manhattan's luxury residential market decreased 1.6% year-over-year in July, to $3.2 million, according to a new report.
Tetra Images/Getty Images

Prices for luxury residential real estate in Manhattan declined in July for the 10th consecutive month, as the median resale price across all tiers grew at its slowest pace in more than four years.

The median resale price in the luxury segment decreased 1.6% year-over-year in July, to $3.2 million, according to a report released Monday by StreetEasy, which defines the high-end tier as the top 20% of the market.

More:Condominium Prices Reach New Heights in Brooklyn’s Hottest Neighborhoods

While all other price tiers in Manhattan are also slowing down and starting to flatten out, they are still showing price growth on both a monthly and yearly basis. Prices in the luxury tier, however, marked their fifth consecutive month of yearly declines in July, StreetEasy said.

"Now that we’re seeing prices decline both on a monthly and yearly basis, it’s clear we’ve reached a point of oversaturation," StreetEasy economist Krishna Rao said. "Manhattan inventory is top heavy, and the demand for it that we saw a few years ago isn’t around anymore."

Among neighborhoods, the Upper West Side saw the biggest decline in high-end values, with its median resale price falling 3.2% last month compared with the same month in 2015, down to $3.08 million.

For Manhattan overall, the median resale price increased 2%, its lowest pace since April 2012, to $994,458.

"Price growth last month is mirroring the way the sales landscape looked in 2012, before the frenzied run-up in prices that characterized the last few years," Mr. Rao said.

Lower prices, however, are not translating into faster sales. Homes in Manhattan are actually taking longer to go into contract: a median of 62 days, up 13 days from last year. This is despite the fact that sellers are accepting offers below their asking prices.

In July, sellers received a median of 97.7% of what they sought, compared with 100% in the same month last year, according to StreetEasy.

"Sellers will need to continue to level expectations amid a less competitive market, while buyers have the opportunity to negotiate asking prices down even further," Mr. Rao said.

Brooklyn still growing, but at a slower pace

While luxury prices are still growing in Brooklyn, they have been slowing since February 2015. In July, prices experienced their lowest annual increase (0.4%) since February 2011, to $1.36 million, according to the report.

More:Brooklyn Homes Are Selling Faster Than Manhattan’s

As in Manhattan, Brooklyn homes in all price tiers are taking longer to sell. It took a median of 53 days for properties to change hands, up nine days from July 2015 . Sellers in Brooklyn, however, got 100% of their initial asking price—and more than they were asking for if they sold in the Prospect Park submarket, where falling prices gave way to a particularly competitive month. Sellers in this neighborhood received 102.9% of their asking price, according to StreetEasy.

The Prospect Park submarket is made up of a handful of neighborhoods: Park Slope, Prospect Heights, Prospect-Lefferts Gardens, Prospect Park South, and Windsor Terrace, according to StreetEasy.

One somewhat surprising neighborhood, East Brooklyn, was the only submarket across Manhattan and Brooklyn to see double-digit annual price growth in July, at 10.7%.