Sales Decline Dramatically, Skewed by Mansion Tax Deadline in Previous Quarter; Prices Drop as Sellers Adjust to Market Realities
Douglas Elliman Real Estate, the largest brokerage in the New York Metropolitan area and the second largest independent residential real estate brokerage in the United States by sales volume, today releases the Q3 2019 Market Reports for Manhattan and Northern Manhattan.
The number of sales in Manhattan fell sharply; an adjustment to the sales completed to beat the Mansion Tax deadline in the previous quarter, and not as dramatic drop as it seems on the surface. The report also showed a decline in the median sales price, with a heavy reliance on purchase mortgages across all price levels, and an increase in listing inventory, especially in the luxury sector.
“Though we saw sales decline rather significantly this quarter, it’s important to keep in mind that many sales were achieved over the summer by buyers rushing to file ahead of the Mansion Tax deadline on July 1st,” said Steven James, President and CEO of Douglas Elliman, New York City. “The combined sales for the second and third quarters of 2019 are only down slightly from the same time period last year, and I suspect that with mortgage rates remaining low and sellers loosening their hold on unrealistic pricing positions, the largest declines are behind us.”
Northern Manhattan results mirrored those of the overall Manhattan market, showing fewer sales, declining prices and rising inventory. Notably, the number of co-op and condo sales were the lowest in any third quarter in the past decade.
“Price trend indicators fell sharply across Northern Manhattan, and this quarter’s numbers did not deviate from the overall Manhattan results,” said Jonathan Miller, of Miller Samuel Inc., the author of the reports. “Sales have been falling for nearly two years, and prices are now down across the board. This shows that sellers are finally adjusting to the realities of the market. With inventory also rising, I think we are in the midst of the market healing itself.”
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MANHATTAN SALES MARKET HIGHLIGHTS
Overview
Co-ops & Condos
“The recent Mansion Tax deadline poached sales from this quarter back into the prior quarter.”
- The number of sales fell sharply due to second quarter Mansion Tax deadline
- Heavy reliance on purchase mortgages across all price strata
- Listing inventory expanded annually for the eight straight quarter
- First annual decline in co-op median sales price in thirteen quarters
- Condo median sales price declined year over year for the seventh time in eight quarters
- Largest annual percentage increase in luxury listing inventory in five years
- Luxury median sales price declined year over year for the eighth time in nine quarters
- Average size of a luxury new development sale fell year over year by nearly 900 square feet
- The number of new development sales fell year over year for the seventh time in eight quarters
Key Trend Metrics (compared to same year ago period)
- Median sales price fell 8.2% to $1,025,000
- Price per square foot declined 5.3% to $1,524
- Average sales price decreased 14.1% to $1,656,395
- Number of sales dropped 14.2% to 2,562
- Listing inventory rose 6.2% to 7,352
- Days on market slipped 1.1% to 91 days
- Listing discount was 5.1%, down nominally from 5.2%
- Months of supply was 8.6 months, 22.9% slower
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NORTHERN MANHATTAN SALES MARKET HIGHLIGHTS
Overview
“Price trend indicators fell sharply across the market”
Co-ops & Condos
- Fewest third quarter sales to occur in a decade
- Sixth straight quarter with a year over year gain in listing inventory
- Largest year over year decline in median sales price in more than a decade
- Surge in sales below $500,000 as mortgage rates fell sharply
Townhouses
- Smallest average sales size in nearly five years of tracking
- Sixth straight quarter without a year over year decline in listing inventory
- First annual rise in sales over seven quarters
Key Trend Metrics (compared to same year ago period)
Co-ops & Condos
- Median sales price declined 18.2% to $558,000
- Price per square foot declined 12.4% to $815
- Average sales price fell 17.5% to $657,043
- Number of sales dropped 15.6% to 211
- Listing inventory increased 6.3% to 419
Townhouses
- Median sales price dropped 34.9% to $1,826,250
- Price per square foot declined 23.2% to $637
- Average sales price fell 32.6% to $1,901,807
- Number of sales was 16, up 6.7%
- Listing inventory was unchanged at 60
About Douglas Elliman Real Estate
Established in 1911, Douglas Elliman Real Estate is the largest brokerage in the New York Metropolitan area and the second largest independent residential real estate brokerage in the United States by sales volume. With more than 7,000 agents, the company operates approximately 120 offices in New York City, Long Island, The Hamptons, Westchester, Connecticut, New Jersey, Florida, California, Colorado, Massachusetts and Texas. Moreover, Douglas Elliman has a strategic global alliance with London-based Knight Frank Residential for business in the worldwide luxury markets spanning 60 countries and six continents. The company also controls a portfolio of real estate services including Douglas Elliman Development Marketing, Douglas Elliman Property Management and Douglas Elliman Commercial. For more information on Douglas Elliman as well as expert commentary on emerging trends in the real estate industry, please visit elliman.com.
