Manhattan property performance 2018

Posted by Wei Min Tan on January 3, 2019

Overall Manhattan Market (Condos and Coops)

 

The Miller Samuel/Elliman 4Q’2018 report published today shows that Manhattan property’s 2018 performance experienced a 14 percent drop in sales volume.  Inventory levels in Q4’2018 increased 12 percent.   Number of sales for Q4 was 7 percent below the 10-year fourth quarter average.

 

Reasons include an oversupply of high end apartments, the new tax law which limited tax deductibility of mortgage interest, slowing global economies which reduced foreign buyers, rising interest rates and a stock market that almost reached bear market territory the end of 2018.  We had an up cycle from 2010 to 2017.  That ended in 2018.

 

Median price of an apartment is now below $1 million, at $999,000, a 6 percent drop compared to a year ago.   Investors have been coming in, represented by all-cash transactions rising to 55.4 percent, the highest in the last 5 years.

 

This data represents the “overall” market which includes both  condominiums and cooperatives, the ratio of which is about 1:2 (one third are condos, two-thirds are coops).

 

The Condominium Market

Specific to the condo market, sales volume in Q4 dropped 13 percent, listing inventory increased by 3 percent while listing discount increased to 6.7 percent.  Median price was $1.479 million, down 9.5 percent.  All indications of a soft market with high supply and more negotiability.

 

However, price per sqft increased by 9.5 percent to $2,152 per sqft.  Average sales price also increased by 12 percent to $2.96 million.

 

Many new developments pulled back inventory.  Sales levels of new developments decreased by 32 percent.

 

2019 Outlook

The slowdown should continue in 2019 although may predict the hard hits have been absorbed in 2018.  At new developments, we are seeing developers giving in to concessions such as paying for transfer taxes and credits, which never happened during the up cycle.

 

The summary is, this is the best time to be a buyer but a terrible time to be a seller in Manhattan.

 

 

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Wei Min Tan is a property broker focusing on Manhattan, New York luxury condominiums and foreign buyers. He is often interviewed by the media including CNN, The New York Times and The Wall Street Journal on the subject of foreign buyers of Manhattan property.