The weather might be heating up in Manhattan, but the borough’s apartment sales market cooled during this year’s second quarter, according to reports from four of New York City’s major brokerage firms.
The overwhelming consensus from Tuesday’s batch of reports from Corcoran, Douglas Elliman, Halstead and Stribling & Associates is that Manhattan was a buyers’ market in the second quarter.
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An overall oversupply of inventory, paired with a lack of new development closings, led to lower sales numbers and prices.
However, a surge in high-end condo sales helped prop up the market.
New tax laws and volatile financial markets discouraging buyers
The median sales price for apartments in Manhattan dropped 3% to $1.14 million in the second quarter, according to Corcoran, as the market shifted to favor lower-priced transactions and new development closings fell.
Closed sales dropped 14% compared to the same time last year to nearly 3,200 transactions, as the "effects of the new tax law, high real estate taxes and volatility in the financial markets all contributed to a dampening of buyers’ purchase intent" in the second quarter, Corcoran’s report said.
And as Manhattan buyers declined, inventory rose 17% to 7,491 units, the 10th consecutive quarter of year-over-year inventory increases. Co-op inventory rose the most, up 26% year over year, resale condos increased by 11% and new development inventory increased by just 4%, the report said.
Market logs fewest second-quarter sales in nine years
The past three months logged the highest second-quarter inventory in seven years and lowest second-quarter sales in nine years, according to Douglas Elliman.
The median sales price for apartments declined 7.5% from the same time last year to $1.1 million, and the number of sales declined 16.6% to 2,629, according to the brokerage’s data.
Across the same time frame, listing inventory rose 10.7% to 6,985.
But on the plus side, listings are spending slightly less time on the market, securing a sale in an average of 103 days, a 4.6% decrease from the same time last year, the report said.
The luxury market—defined by Douglas Elliman as the top 10% of all condo and co-op sales—had a bumper quarter. Closed sales of big ticket properties rose 19.5% from last quarter to 263 and the median sales price increased 10.7% to $6.5 million in the same time frame.
However, both the number of sales and the median price dropped when compared to the same time last year, the data showed.
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New development closings plummet
The median Manhattan apartment price fell for the fourth straight quarter, according to Halstead. The brokerage also logged the median price at $1.1 million, down 9% from the same time a year ago, as higher inventory pushed prices lower for many apartments, the firm’s report said.
The sluggish new development market, which saw 30% fewer closings than a year ago, is also responsible for putting downward pressure on prices.
"Currently, the average new apartment sells for more than double that of a resale one, so a sharp decline in these sales has a substantial impact on the overall average apartment price," the report said.
Halstead’s report is based on 2,245 Manhattan apartment sales, 12% fewer than the same time last year, the report said.
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Sales soar for condos priced at $20 million or more
Stribling & Associates calculated the median sales price for a Manhattan apartment a pinch higher than the three brokerages mentioned above—$1.125 million, though that’s still a decline of 6.6% year over year.
Inventory was up, too, according to Stribling. There were 6,994 units on the market at the end of the second quarter, a 6% increase from the prior quarter and an 8% increase year over year.
Meanwhile, Stribling logged 2,230 recorded sales, a 12% decrease from the same time last year.
But like the firms mentioned above, Stribling found a slowdown in new development sales is being felt through the market.
"There has been a lot of discussion recently about how the market has peaked, and somewhat slowed," said Garrett Derderian, director of data and reporting at Stribling, in the report. "While we have seen price adjustments and a slowdown in recorded sales, the lull is more closely tied to a lack of a surge in new development closings, rather than a declining market picture overall."
Manhattan’s ultra high-end condo market had a triumphant second quarter as condo sales above $30 million were up 20% year over year, and the number of contracts signed for condos priced $20 million or more was up 67% in the same time frame, Stribling said.