Manhattan property prices fell in the fourth quarter, with the median slipping to less than $1 million for the first time in three years, as sufficient supply continued to allow buyers to demand better deals.
Condo and co-op prices declined to $999,000 in the three months through December, a drop of 5.8 per cent from a year earlier, appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate said in a report Thursday. Many apartments were sold for less than sellers originally sought, with the average discount being around 6.2 per cent from the previous list price. That’s up from price discounts of 5.4 per cent a year earlier.
This was the first time the median was less than 1 million dollars since the third quarter of 2015, when it was $998,000.
The Manhattan property prices drop is largely the result of property buyers having options. The stock of existing homes on the market was up 17 per cent from the previous year. That’s given buyers greater negotiating power, and left sellers with no choice but to drop the overly optimistic listing prices if they want to shift properties.
“We had a number of cases where a lot of people came back for second and third visits, and never made an offer, and it’s totally and completely tied to pricing,” Steven James, chief executive of Douglas Elliman’s New York City division, said in an interview. “Many sellers still have not gotten the message. I think many more sellers in 2018 got the message, and those who got the message sold.”
Studio and one-bedroom units continued to see the most gains. For all apartments, it took 15 per cent longer to sell a home in the fourth quarter than it did a year earlier, according to Miller Samuel and Douglas Elliman.
On top of a still-strong pipeline of newly built homes swelling the stocks in the city, 2018 saw rising interest rates, new US tax laws that further strained some homebuyers’ finances through caps on property-tax deductions and a stock market not suiting many investors.
“All that kind of created almost a perfect storm to drive down prices farther than people anticipated,” said Matthew Hughes, a broker with Brown Harris Stevens. “The market was very hot in 2015, 2016, and we needed a natural correction.”
“As developers try to sell new homes, some are offering to pay transfer or mansion taxes, cover attorneys’ fees, or provide buyers such perks as a year of free butler or car service – giveaways “that you’ve never even heard of just a couple years ago”