More luxury homes traded hands in Manhattan over the past year as buyers were lured by steeper discounts, according to a report released Tuesday.
The number of contracts signed for homes over $4 million totaled 1,172 in 2017, a modest 6% increase over 2016, according to the report by Olshan Realty, which puts out a weekly roundup of pending luxury sales in Manhattan, marking $4 million as the luxury threshold.
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Total sales were still well below the peak years for Manhattan luxury—between 2013 to 2015—when annual sales topped 1,300.
"2017 does not come close to the golden years of new development...when a surge of buyers clamored for new construction," wrote Donna Olshan, president of Olshan Realty, in the end-of-year report.
Price cuts drove the uptick in sales in 2017, as sellers who overpriced their homes finally came to the negotiating table. Many of those home had languished on the market for months—or even years—before owners decided to come back down to earth.
The spate of stale listings that finally moved in 2017 drove up the average time on the market. It took the typical high-end home in New York more than 14 months to go into contract this past year, four more months than in 2016, according to Olshan’s figures.
"This is a continuing trend that reflects an overpriced market, in which a typical property had to drop its asking price by 8% before it could find a buyer," Ms. Olshan said in the report. "The trend further demonstrated that there is a clear buyer resistance if the property is not priced correctly from the start."
One of the slowest segments was the Manhattan townhouse market, which moved only 100 homes this year, an 11% decrease from 2016. That was due in large part to the skyrocketing cost of renovation coupled with very large condo units in amenity-rich buildings that are now competing with the city’s historic brownstones, Ms. Olshan said.
Contracts signed in 2017 totaled more than $9.1 billion, an almost 2% increase from last year.
Uncertainty over the income tax overhaul signed last week will dominate the city’s real estate market in the coming year, Ms. Olshan said.
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"The big question is: What will be the effects of the new tax law, which caps state, local and property tax deductions at $10,000, on the Manhattan luxury market?" she asked.
The week ending Sunday closed out the year with 10 contracts signed for a total of $76.9 million.